Thread: Immigration controversy may impact contractors

http://www.centredaily.com/mld/centreda ... 514703.htm

Posted on Sun, May. 07, 2006


Immigration controversy may impact contractors
Industry warns of slowdown if migrant work force leaves
By Katherine Yung
The Dallas Morning News

DALLAS -- In the debate over how to fix the nation's immigration laws, few sectors have more at stake than the construction industry, one of the country's economic bright spots.

One of every four workers in construction is an immigrant, according to government statistics.

And as orders for new housing have soared during the past decade, the industry's future has become increasingly intertwined with that of the immigrant work force.

"There's a lot of demand for people out there, and (immigrants) know that and they want to work," said Javier Huerta, a Mexican immigrant who co-owns Carrco Painting Contractors Inc. in Garland, Texas.

For the past several years, construction subcontractors, the firms that perform the actual work, have been suffering from a shortage of workers, thanks in large part to the housing boom.

Now the industry faces a double whammy: a rebound in commercial and public works building projects and the Hurricane Katrina rebuilding effort. Those developments are pinching the labor market even tighter.

More than ever, filling the labor shortfall will depend on tapping the flow of immigrants, both legal and illegal.

As a result, the construction industry is lobbying for policies such as a temporary guest worker program and legal residency for some of the country's 11 million undocumented migrants.

"We believe the nation must do something sooner rather than later," said Danielle Ringwood, director of legislative affairs for the Associated Builders and Contractors, which represents 23,000 construction firms.

The group is warning that without the immigrant work force, construction would screech to a halt in the United States. It estimates that the industry will need 185,000 new workers over the next 10 years just to remain at current levels of growth.

The number of foreign-born construction workers has more than quadrupled during the past decade, government statistics show. Construction also employs more newly arrived undocumented workers than any other industry, according to figures from the Pew Hispanic Center.

On any given day, 117,600 mostly immigrant workers around the country either work as day laborers or are looking for such work, according to a recent survey.

"The immigrant work force is still keeping the housing market afloat to some extent," said Jerry Howard, chief executive of the National Association of Homebuilders.

The construction industry's reliance on immigrant labor isn't new. Today's heavily Hispanic work crews in states such as Texas, California and North Carolina have largely replaced the Irish, Italian and other European craftsmen and laborers that built cities and towns in the Northeast and Midwest.

But these days, immigrants increasingly form the industry's backbone, taking on dangerous and grueling work often for less pay than native-born Americans would demand. In many instances, they're performing jobs that the native-born won't do.

Economists and construction firms say that new housing and office space would cost much more and take longer to build without these workers.

Though no one has come up with any national estimate of the size of the savings, a recent study found that the absence of Hispanic workers would have cost North Carolina, for example, up to $10 billion in lost construction-related revenue in 2004. That includes up to 27,000 houses that would never have been built.

"A huge amount of our work force is immigrant," said Mitch Beckman, director of human resources for AUI Contractors in Fort Worth, Texas. "They know the trade and are willing to do the work."

Construction is the only goods-producing sector of the economy that is expected to add jobs from 2004 to 2014, according to the U.S. Bureau of Labor Statistics.

That comes on top of phenomenal growth during the last decade, when average annual industry employment reached a high of 7 million workers in 2004, up from 5.3 million in 1995.

Unlike some firms that use so-called day laborers, AUI, which handles civil and commercial projects, doesn't pay its immigrant workers less than native-born Americans. It also conducts background checks on new hires.

Still, the company, which employs 265 workers, is anxiously awaiting the outcome of the political wrangling on Capitol Hill.

"Whatever side a piece of legislation is going to land on, it will have an impact on us," Beckman said.

Other subcontractors also say immigrant labor fills an important void.

From time to time, Bailey Family Builders hires Hispanic construction workers for jobs that it can't find native-born Americans to perform, said Thomas Bailey Sr., owner and president of the Plano, Texas, custom homebuilder.

The jobs involve such tasks as digging ditches and hauling trash. Usually the assignments last two weeks and pay $10 an hour.

"These people coming here from Mexico are not a security threat to us," Bailey said. "They just don't wade across the river and take jobs someone else is standing in line to take."

Like other builders, he favors a guest worker program. "It would help us be more certain about what our costs will be for a six-, eight- or 12-month period," he said.

Even as companies scramble for workers, a growing number of immigrants are moving up the industry's ladder. Increasingly, they are forming firms of their own, employing other immigrants.

Twenty years ago, Huerta, of Carrco Painting, left Mexico City for Dallas, intent on building a more prosperous life but unsure of how he would earn a living.

Today, the 38-year-old runs a business that employs 97 workers, most of them immigrants who paint everything from hotels, hospitals and parking garages to Wal-Marts, schools and the Dallas police headquarters.

"I always had it in my mind to do better," said Huerta, who also serves as vice chairman of the Hispanic Contractors Association of Dallas-Fort Worth. "I didn't really feel Mexico had a lot of opportunities. This country has a lot of opportunities."

Recently, the legal U.S. resident and father of three marched in a huge immigration rally in downtown Dallas. He knows all too well how crossing the border can change lives.

"Immigrants are building this country," he said. "They are going to give you more than you expect. They are going to perform."

why dont the construcition companies hire all those laid off workers in the auto industry? There are many US citizens who need jobs.

Also i find it hard to believe that we NEED taht many new houses. Of course we DO if we have so many Illegals streaming into the country. But otherwise, why keep building and destroying open land when it is not needed?

Developers are just greedy like the other big corporates. they want GROWTH which they get if we get population increase e.g. as with illegals coming here in heavy volumes. more consumers, buying more. mak this place as congested, expnsive and opportunity free as in the old world.

I have been an electrical contractor in south Florida since 1989. Having worked on many large construction projects in the area, I have personally witnessed the fraud and corruption that has overtaken the construction industry in south Florida due to illegal immigration.
The electrical trade is one of the few trades that has yet to be overtaken by the illegal workforce, but that is changing.
Anyone that believes that they are saving thousands of dollars on their new home because of cheap Mexican labor, is living in dreamland. It doesn't work that way.
Simple example:
A new $300,000 home with the building lot provided by the owner would break down roughly like this. $100,000 labor, $150,000 material costs and $50,000 contingency costs (permits, land development, water-sewer connections, etc.)
Since market forces (supply and demand) dictate that this particular home is valued at no more or no less than $300,000 the developer/general contractor is more or less forced into a fixed profit margin. Normally about 15%-20% off the top.
Building material costs along with contingency costs are pretty much cut and dry across the board with very little room for manipulation. But labor costs are where the builders/developers are able to pocket an additional $20,000-$30,000 or more by hiring sub-contractors that use illegal alien labor.
A legitimate sub-contractor creates a documented payroll once per week, deducting payroll taxes and paying the employer's share of payroll taxes. In addition, workers compensation and general liability insurance are paid based on gross payroll. Normally about 30% of gross payroll covers payroll taxes and insurance costs.
A sub-contractor employing illegal aliens has an entirely different way of conducting a payroll. Some of them brazenly show up at the jobsite on Fridays and pass out $100 bills. I have personally witnessed this many times. Some of them are more discreet and meet their employees off site on payday.
The bottom line is that the illegal alien employers avoid making payroll tax payments along with workers compensation and general liability insurance payments.
The legitimate sub-contractor is automatically placed at a 30% disadvantage in payroll costs. Add to that the fact that illegal Mexicans are willing to work for $8-$10 per hour cash while a legal skilled tradesman is worth $16-$20 per hour.
When a builder/developer accepts bids from illegal alien sub-contractors that are 20% less than legitimate sub-contractors, these savings are not passed on to the owner. The builders profit margin now jumps from 10%-15% to 20%-30% or more. Under our current laws, the builders/developers are totally insulated from this corruption since their illegal profits are made in labor cost savings that are factored in during the bid process.
This has been going on for years and is now being accepted as normal. Your $300,000 home, built by 10 Mexicans at $10 per hour is not of the same quality as if it were built by 5 Americans at $20 per hour. The advantage of the 10 Mexicans verses the 5 Americans is not to you in cost savings but to the developer in increased profit margin.
If developers were forced into a situation of verified labor and payroll compliance, their profit margins would drop back to a reasonable 15%-20%, American sub-contractors would be able to compete, American construction workers would be willing to work, the US government would receive all payroll taxes due, the American consumer would receive a better product and a large portion of illegal Mexicans would go home. And the cost of your $300,000 house would remain the same.
Our highways would be less crowded, hospitals, clinics and medical centers would be more efficient, our children would become better educated, there would be less crime, affordable housing would become more accessible to the American poor and we wouldn't see these stupid marches and boycotts in the news every couple of weeks.
Anyone that buys into the rhetoric that we Americans need Mexicans for ANYTHING is gravely mistaken. What America needs is the American middle class intact, working and not subjected to the Mexican underclass cutting our legs off at the knees.

Welcome Wep!

The electrical trade is one of the few trades that has yet to be overtaken by the illegal workforce, but that is changing.

Yep, you got that right! I have stated many times here that, when I met my husband in the late 1980's, he was framing homes for 22.00 and hour, plus benefits! I thank God everyday that he got into the auto salvage business rather choosing to continue in the building trades.

All these wealthy delelopers and contractors crying poor mouth is an absolute lie. My husbands ex-employer was rolling in the dough while paying a decent wage. He had a palatial home in tony Greenville DE, as well as a beach front home in equally tony Rehoboth Beach, not to mention that huge state of the art boat he would take us tuna fishing on.

Of course now, everytime we see his trucks or signs on a worksite, the work crews are almost all, without exception, latino.

If illegals save us so much money, why is everything still so darn high???
The construction owners may be saving money, but they sure aren't passing off the savings to the customers

Welcome wep561!

Excellent post!!

One of every four workers in construction is an immigrant, according to government statistics.

That means that 75% of construction workers are American citizens. So, those illegal aliens ARE taking jobs that Americans WILL do.

Construction will not slow down if we deport the illegals or make it impossible for contractors to hire them. There are many people out of work in this country that would work for decent american wages. It is this crap of skimming to make profits and avoid paying taxes or benefits that has ruined the construction industry even for those still working in it now. Deport the illegals, pay an working wage and benefits and you will get the workers you need.