Home-building boom relies on illegal workers
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Sunday, September 17, 2006 - 12:00 AM
Home-building boom relies on illegal workers
By Sanjay Bhatt
Seattle Times staff reporter
When thousands of Seattle-area Latinos stayed away from their jobs May 1 to take part in a nationwide show of support for immigrants in the work force, the largest housing-construction project in all of King County became a ghost town.
The next day, the sprawling job site in the foothills of the Cascades was abuzz again with activity: Mexican workers were hanging heavy sheets of drywall while crews listening to Spanish radio installed cabinets and painted the walls of million-dollar homes with views of the Seattle skyline.
As the noon hour approached, a familiar taco truck made its way across the work site, honking the first stanza of "La Cucaracha" in a signal to hundreds of workers: lunchtime at Issaquah Highlands.
"If I look outside my window right now it looks like we're south of the border," said veteran builder Jim Nietmann, a superintendent for one of at least a dozen homebuilders at Issaquah Highlands, a community that will eventually have at least 3,250 homes. "Easily half are from Mexico, and they're fueling our industry."
Latino immigrants have become essential to builders at Issaquah Highlands and at other nonunion job sites across Puget Sound during the biggest wave in home construction in decades.
Locally, many inspectors, construction foremen and union organizers estimate that in the last few years they have come to represent anywhere from half to 90 percent of the work force at residential job sites in the Puget Sound region. They dominate unskilled-labor crews and are prevalent among drywallers, framers, roofers and other semiskilled trades.
And it's an open secret that many of these workers are here illegally.
Exactly how many illegal immigrants are working in the regional construction industry is nearly impossible to determine because most conceal their true immigration status, for fear of being deported.
Carl Hammersburg, fraud-prevention and compliance manager for the state Department of Labor and Industries, says he thinks the numbers are significant.
"It's really tipped in the last five or six years," he said.
Their increased presence in the regional construction industry reflects a national trend.
Using census data, the Pew Hispanic Center, a nonpartisan research group in Washington, D.C., estimates that nationwide about one in five illegal residents works in construction — five times the number working in farm jobs.
Make no mistake — it's against federal law for an employer to hire workers knowing they are in the country illegally. But a loophole makes it easy to skirt the law: While the law requires employers to ask prospective workers for documentation, it doesn't require them to verify that it's authentic.
Prospective workers need only show a Social Security card — fake ones can be bought on the street for $200 — and a driver's license. Washington state is one of 10 states where immigrants can get a driver's license without proving they're here legally.
At whose expense?
The debate over what to do with illegal immigrants — deport them, allow them as "guest workers" to perform certain jobs or offer them citizenship — is giving rise to an oft-heard question and its flip side:
Are illegal immigrants taking jobs away from Americans?
Or are they doing work that Americans shun?
To some extent, both scenarios are true, depending on which Americans and which jobs are in question.
Most mainstream economists think that broad numbers of Americans are not being displaced. Those most likely to be bumped out are at the bottom rung of the economic ladder — unskilled high-school dropouts, say, or other uneducated immigrants.
The construction industry, led by the Associated General Contractors of America and the National Association of Home Builders, opposes any national policy that would deport vast numbers of illegal immigrants, saying they help alleviate a chronic shortage of workers.
"I don't know where they think these workers would come from if we didn't have Latinos to do the work," said Bill Cowin, president of Ketchikan Drywall, one of the largest drywall contractors in Washington.
"They don't mind doing the manual work, whereas my son wants to run a computer."
But some economists also say that if wages were higher, there might not be a shortage of workers.
The laws of supply and demand dictate that average wages should rise during a labor shortage. But for three consecutive years — even as housing starts nationwide have risen — the average wage for construction workers, after adjusting for inflation, has fallen.
Among the factors contributing to that trend, economists say, are increasing immigration and declining membership in labor unions.
Further, some contractors complain that in the region's hot construction market, it's not uncommon for builders who hire illegal immigrants to undercut those who don't.
Joe and Brenda Mailloux of West Seattle, owners of Drywall Wizards, started their business in the 1990s and paid union wages. By 2004, contractors who were hiring illegal immigrants were underbidding them often enough, they said, that they couldn't compete and had to lay off their employees.
"If we don't turn this thing around, what's going to happen is construction jobs won't be jobs that pay good, livable wages," Joe Mailloux said. "Only people in their 20s and 30s will be doing them or those willing to live as an underclass."
For illegal immigrants, building a house may pay more than picking fruit, but there are risks: The work can be dangerous, and a here-today, gone-tomorrow contractor can exploit their illegal status, cheating them out of wages or forcing them to work when injured. When that happens, few seek recourse, largely to avoid being outed to immigration authorities and deported.
That said, many contractors are quick to praise immigrant workers.
"They work harder than most of the white guys I know, and they're willing to take less money," said Tommy Johnson, a superintendent for Kirkland-based Spartan Concrete, which is building parking garages below condominiums at Issaquah Highlands.
How it came to be
Since the early 20th century, the United States has welcomed Mexican workers to fill labor shortages during economic booms and sent them packing during economic busts.
During and after World War II, the U.S. government admitted more than 4 million Mexicans to work for several months at a time on farms and in other industries. Though that guest-worker program ended in 1964, Mexicans continued to come here, many illegally, in search of better-paying work.
In 1980, only 6 percent of construction workers were Hispanic, but their presence grew steadily over the next two decades, according to the federal Bureau of Labor Statistics.
The passage of the 1986 Immigration Reform and Control Act granted amnesty to millions of illegal immigrants, the majority from Mexico. They settled in border states like California and Texas, sending billions of dollars back home and serving as a job-referral network for relatives in Mexico.
Those informal networks played a key role as the pace of home building accelerated across the country and region in the 1990s. The housing boom — and the entry-level jobs it spawned — helped draw illegal immigrants away from a half-dozen traditional hubs to cities farther away, altering the face of communities that once had few immigrants, says Jeffrey Passel, a senior research associate at Pew Hispanic Center.
From 2000 to 2005, as the number of housing starts skyrocketed nationally, Hispanic workers met the demand for labor, filling more than two of every 10 construction jobs. The numbers are higher in border states and cities with large immigrant communities.
"There's just so much need for good help," said Verne Woolley, general manager of Aero Construction, a Snohomish ground-clearing contractor with more than 200 employees. "More and more I'm coming back to my Mexican gentlemen and asking, 'Do you have any family anywhere?' "
"I've got almost entire families working for us," Woolley said. "They keep bringing people, and they're good help."
Escape from Mexico
Among the Latino drywall workers who've worked at Issaquah Highlands is Adrian Quiñones, 31, who grew up on a farm in the Mexican town of Durango, a few hundred miles south of El Paso, Texas.
Durango's setting between the Sierra Madres and the Chihuahuan Desert made it a popular backdrop for Hollywood Westerns in the 1950s. But the reality behind the scenes was that Quiñones and his family could barely survive on the corn and beans their small farm produced.
Like thousands of young, poor Mexicans, Quiñones walked through the desert in an attempt to cross illegally into the United States, finally succeeding in 1989 on his fourth try. He entered near Nogales, Ariz., and obtained a false Social Security number and driver's license.
He eventually came to Washington state because he had a sister and brother living here. For the past eight years he's worked for an Issaquah drywall company that employs about 150 Mexicans. His crew has done homes at Issaquah Highlands.
Just as poverty pushes many Mexicans to seek work here, employers pull them in as well, sometimes recruiting workers through family members or illegal labor brokers.
Bob Esparza, a construction inspector for the Department of Labor and Industries, says these labor brokers, or "coyotes," are usually bilingual Latinos who bring workers here from south of the border, house them, shuttle them to job sites and pay them.
Brokers often can evade scrutiny on big construction sites, where a builder typically has numerous subcontractors, each of whom may — unbeknownst to the contractor — farm out parts of a job to still other subcontractors. That structure naturally pushes down — and can intentionally be used to obscure — responsibility for wages, taxes and liability, Esparza said.
"It's suicide to do that from a builder's standpoint," said Nietmann, because the builder loses control over the project. "If we catch someone doing that we fire them immediately."
In these lower tiers, some employers pay workers cash under the table, leaving no paper trail to connect the pay to those higher up the ladder.
In 2003, the president of a Texas construction company went to prison after federal agents showed that he and others rented hotel rooms and apartments to illegal immigrants lured to Nashville and Memphis, Tenn., by job ads in Spanish-language newspapers.
Though federal agents have not busted any builders or contractors in Washington state for human trafficking or harboring illegal aliens, there are many accounts of Mexicans who were wooed here.
"I have been screaming that for years," said Tacoma attorney Betsy Rodriguez, who represents illegal immigrants in wage and injury claims against employers. "They don't come! They are brought!"
Who's the employer?
One of her clients was an illegal immigrant from Mexico named Anastacio Rueda Galicia, whose case offers a window into how the labor-broker system creates confusion, obscuring who actually hired a worker and thus is liable, as his employer, if the worker is injured on the job.
The case began in 2001, when Galicia fell from scaffolding at a Ketchikan Drywall job site in Carnation, fractured his skull and was treated at Harborview Medical Center in Seattle. He filed a worker's compensation claim with the Department of Labor and Industries against Ketchikan Drywall, which challenged it, saying Galicia wasn't its employee.
Galicia and other illegal immigrants testified before the state's Board of Industrial Insurance Appeals that their supervisor, David Jones, had recruited them from other states and moved them into a house in Bothell run by Jones' brother-in-law.
Galicia said he worked 12-hour days, six days a week, for which Jones paid him between $4 and $7 an hour in cash, once a month.
Galicia and the others testified that Jones told them they worked for Ketchikan Drywall. They picked up sheets of drywall from Ketchikan's warehouse, hung them at Ketchikan job sites with Ketchikan's tools and were supervised by Jones and his brother-in-law, both Ketchikan employees, according to court testimony.
But Ketchikan Drywall's president, Cowin, said he did not hire Galicia and did not give Jones, a Ketchikan foreman, permission to hire anyone on Ketchikan's behalf.
Judge James Hickman of the state board ruled that while Ketchikan ultimately received the benefit of Galicia's labor, there was no hard evidence that Ketchikan was Galicia's employer or knew of him.
Hickman concluded that Jones had hired the illegal workers and therefore was their employer. He ordered Jones to pay premiums and penalties to the state for not reporting Galicia as his employee.
Jones did not respond to numerous requests for comment.
Hickman called Jones' conduct reprehensible, saying that "by all accounts, Mr. Jones engaged in a scheme whereby he brought undocumented workers to this area, provided them with forged or otherwise falsified documentation for a fee, housed them with his brother-in-law (also for a fee), and skimmed at least a portion of their wages for his own benefit."
Galicia appealed the judge's finding and lost. His illegal status having been divulged, he was also deported.
Jones is still an employee of Cowin. He keeps Jones on the payroll, Cowin said, because "he can speak Spanish and helps me with my Latino work force."
Effect on wages, profits
Is the influx of illegal immigrants in the construction industry driving wages down for native-born workers?
Economists are divided over that question, but most studies — including one this year by Giovanni Peri at the University of California, Davis — suggest that immigration has depressed wages slightly, anywhere from 1 to 5 percent, among native-born workers with little education and few skills. More educated native-born workers' wages are not affected or slightly increase.
That illegal immigrants dampen the wages of the most vulnerable native-born workers could be offset by their consumer spending on housing, clothing and other necessities — spending that helps create jobs and investment, says David Jaeger, associate professor of economics and public policy at the College of William & Mary in Virginia.
Workers' wages aside, the supply of cheap labor has helped keep homebuilders' profits stable or growing.
Builders interviewed for this story said they don't hire illegal workers and can't be held responsible if their subcontractors don't follow hiring laws.
Louis Howard, executive vice president for Buchan Homes, a Bellevue firm that builds about 150 houses annually, said that while costs for such materials as copper and lumber have risen, immigrant workers have filled labor shortages, keeping projects on time and thus labor costs down.
Any significant cut in the immigrant work force, such as deporting large numbers of workers who are here illegally, would erode builders' profits because most of the homes are sold at a fixed price before they are built, Howard said.
Economists say removing that work force also would, to some extent, push up workers' wages.
"I would guess wages would have to go up a bit there for builders to find workers, especially in cities where immigrants represent a big share of that work force," said economist Jared Bernstein of the Economic Policy Institute, a Washington, D.C., liberal research group.
Although wages might jump as much as 10 percent, they would gradually return to lower levels, he says, as an ample supply of unskilled workers competes for those jobs.
Bernstein says the story of declining wages for construction workers is less about immigrants and more about contractors and builders having gained the upper hand over unions.
In 1973, 40 percent of construction workers were unionized, he said. Today, organized labor's share of the industry work force has fallen to 13 percent.
Wooing immigrants
With their national memberships at new lows, construction unions are taking a new attitude toward illegal immigrants:
If you can't beat them, get them to join.
Many Latino workers, suspicious of labor unions in their homelands, have shied away from unions here. One of the region's largest, the 8,000-member Pacific Northwest Regional Council of Carpenters, had only a handful of Latino members 10 years ago.
For the past eight years, it has been educating immigrants about their rights and being an advocate for them when they don't get paid, says organizer Clark Gilman. The union also has hired organizers who speak the language of Latino workers.
"I know what it is when somebody owe you $1,000, when you don't have the money to pay your rent," said one such organizer, Jose Angel Juarez. "I know how it is to live with fear."
Slowly, in small numbers that now total about 500, they began to join the fold, Gilman said.
There was a time during the region's population boom in the 1950s and '60s when unions were building entire housing subdivisions. They began to lose ground in the late 1970s.
The union made a mistake, Gilman says, when it began ignoring residential projects in favor of commercial jobs and big public works such as freeway ramps, new community colleges and the Kingdome. Many homebuilders switched to nonunion labor.
And when interest rates soared in the early 1980s, construction slowed, more workers lost jobs and builders gained the power to dictate wages in home construction, Gilman said.
The pay disparity between union and nonunion labor has since grown enormous. Wage complaints filed by immigrants show them working as drywall tapers in nonunion jobs for as little as minimum wage to $20 an hour, depending on skill level, often without health or pension benefits.
Union-scale pay, often a requirement of public works, runs considerably higher, in part because it includes a benefits package.
Gilman mocks the argument some builders put forth that immigrants are doing jobs Americans don't want.
"There aren't enough American citizens willing to live eight people to an apartment for $60 a day working six 10-hour days a week," Gilman said.
Hector Romero, 25, one of the many Latino illegal immigrants working at Issaquah Highlands, has been framing houses for two years, making $14 an hour before taxes.
Amid the national controversy over what to do about illegal immigrants, Romero keeps going to work each morning. He just wants to become a U.S. citizen.
"I love Mexico but I have my family here now," he said.
If he could become a citizen, he said, "I have rights to demand things like sick pay, vacation pay, even medical insurance. But right now there's not much I can do."
Sanjay Bhatt: 206-464-3103 or sbhatt@seattletimes.com.
