A story today in the Wall Street Journal discusses a shadow economy in Spain. Young, unemployed people are engaged in a barter system, trading their services with each other. These services could include things such as car rides, baby sitting, and cleaning.
Barter systems are challenging because two people who interact may not have goods that the other party desires. This is where money comes in. The problem for these young people is that, without jobs, they have been shut out of the larger economy and don’t have access to money.
In an ingenious spin, the community of people in Spain (per the article) have created a “time bank.” ‘Hours of service’ they are willing to provide serves as the currency, and the time bank keeps a record of hours accumulated or spent. Apparently, there are now 291 such time banks in Spain. This probably provides an enormous social net for the young, where “workers 16 to 24 face an astronomical 53.3% unemployment rate. For 25- to 34-year-olds, the rate is 27%.”
While the existence of local barter systems is step back from a single-currency exchange, there is an encouraging element to this story as it pertains to the broader economy. The contingent of people who are unemployed have both desire to consume and the capacity to produce (or to provide useful contributions that are desirable to others). If at some point there is a rebound in economic activity, this contingent of the economy stands ready to provide meaningful momentum to economic growth.