Auto Mechanic Opens Up About Working in Underground Economy

Working off the books is always an option for small business owners who collect part of their earnings in cash; but getting one of them to talk about it isn't easy. As part of KPCC's examination of the underground economy, Patricia Nazario found a mechanic who owns an auto repair shop in the San Fernando Valley. He spoke candidly, and anonymously, about his cash-only policy.

Patricia Nazario: Even during the holidays, cars don't stop rolling into this garage. The guy who owns it, we'll call him Bob, is busy. He juggles phone calls, supervises a couple of mechanics, and tends to customers who show up unannounced.

[Sound of Bob speaking with a customer]

Nazario: Bob opened this shop a year and a half ago. For eight years before that, he worked full time at a non-mechanic job – he prefers not to say what. And he fixed cars on the side.

Bob: You're working at home. That's your extra money. You're working for cash.

Nazario: Not checks. Not credit cards. You get the picture.

Bob: No receipts. No invoices.

Nazario: And no sharing the extra cash with Uncle Sam or Sacramento.

Bob: On a week's basis, we'd probably make anywhere from $400 to $600.

Nazario: Or about $2,400, cash, on the side, every month back then. Now, with his own shop and its overhead...

Bob: A month, it's probably down to about, anywhere from a hundred to $200.

Nazario: Now, a day's work, Bob says, isn't nearly as fun.

Bob: Whereas before, it's like, you always spend money, (laughs) ya know? You spend more money on, you don't really care what you buy: shoes, clothes, just everything, ya know.

Nazario: Bob says, these days, almost every job he takes, including simple oil changes, is above board. But, he still posts light blue signs in the waiting room that say, "Cash Only."

Bob: The policy is, we actually receive checks also. Now we actually are looking into getting credit card machines and everything.

Nazario: Describing one payment policy while his posted signs say something else obviously makes Bob uncomfortable.

Nazario: How come people don't want to talk about this?
Bob: I don't know, just timid, scared, ya know! They don't want to get audited. (laughs) You know, they don't want the state to come down and uhh, IRS come down and start auditing people, ya know?

Nazario: Running his own business is not the joyride Bob thought it would be. He invested $75,000 he'd saved when he worked out of his home garage. Now he's working long days trying to cover a range of responsibilities, from garage insurance and employees' salaries to buying medical coverage for himself and his family. Still, at the end of the day, Bob says, being his own boss is worth it.