Thread: Immigrant Laws Put Construction Firms in Squeeze

http://www.hispanicbusiness.com/news/ne ... ore-news.a



Worker Shortfall, Immigrant Laws Put Construction Firms in Squeeze

June 13, 2006

By Thomas Stauffer

Like any business owner, George Simon needs dependable labor. So when the excavation contractor finds workers who show up on time and work hard, he keeps them even if he later discovers they're in this country illegally. "They got here illegally, yeah. But they're here and have family here, and they abide by all the laws and work hard and pay their taxes, so what do you do?" asks Simon, 61. "Do you kick them out of here and ruin their lives because they don't have real papers, or do you hang on to them?"

It's a common dilemma in Tucson's $2 billion-a-year home-building industry. At least 34 percent of Arizona's construction workers are here illegally, based on estimates from the Pew Hispanic Center, a nonpartisan research group. Two dozen local legal and illegal workers told the Star that in their experience, the percentage is more than half. They find jobs despite growing public discontent with the flow of illegal immigrants into the United States. And because of a labor shortage the Southern Arizona Home Builders Association estimates at 5,000 workers, they'll keep finding jobs even as lawmakers rebalance a seesaw tipped for decades toward keeping people out while ignoring employers of those who make it in.

Within weeks, the U.S. House and Senate will begin wrangling over their widely varied proposals to revamp immigration laws. But the plans fall short of the multipronged approach needed for real reform, according to an Arizona Daily Star investigation based on interviews with dozens of academics, analysts and employers. Tangible change demands a fraud-proof system to verify legal workers, as well as a wholesale overhaul that would penalize more employers of illegal workers and force the sharing of critical information among federal agencies. Until that happens, illegal workers will continue to fill the void in a growing economy such as Tucson's, says Daniel Griswold, director of the Center for Trade Policy Studies at the Washington, D.C.-based Cato Institute, a libertarian public policy research foundation. "The Arizona economy, the Tucson economy, the national economy continues to create hundreds of thousands of new jobs each year for low-skilled workers in construction, landscaping, food preparation and cleaning at a time when there just aren't enough Americans around to fill all the jobs," Griswold says. "We're getting older, we're getting better educated, and so you've got this huge jobs magnet and an immigration law that doesn't reflect the real needs of the U.S. economy."

Burdened with tasks What the House and Senate bills would do, critics say, is set up builders and subcontractors to fail. Both versions would require seemingly contradictory tasks of employers, builders say: Learn to tell real documents from fakes when the government hasn't found a way to do it, and avoid actions that could be viewed as discriminatory under federal Equal Employment Opportunity laws.

There are plenty of fake documents to go around: About 60 percent of illegal workers use them, Princeton University sociologist Douglas Massey says. Builders and subcontractors lack the time, ability and resources to verify documents needed to legally hire employees, says Bill Valenzuela, the owner of WG Valenzuela Drywall Inc. After a six-month investigation of his 320 workers about three years ago, the Immigration and Naturalization Service picked up one worker and told him to fire 14 more who may have had fake documents. "If he shows me the ID that I'm supposed to receive, how can my daughter and I tell the difference if INS can't?" he asks.

Higher wages might help draw more legal workers to the field, but several local builders and subcontractors worry that could drive down profit margins they say already are so thin they're mulling other careers. Don't mourn the industry's passing just yet, says Rick Oltman, Western field director for the Washington, D.C.-based Federation for American Immigration Reform, which seeks greater restrictions on immigration. Home builders have always done just fine finding the price the market will bear, and new immigration laws won't change that, he says. "Most American businessmen will be able to find a way to get along without all this cheap labor," he says. "They will either hire Americans, raise wages, mechanize or a combination thereof." Paying the price Many in the industry doubt higher wages could overcome Tucson's labor shortage. "If there were 5,000 local construction workers available, skilled or unskilled, they'd be snapped up tomorrow," builder Michael Keith says. "They don't exist. End of story."

Legal workers would fill the void if the industry paid more to the approximately 27,000 it has now, says concrete subcontractor Bill Nelson, who has worked in construction here for 45 years. "I know they just want to come here and work, but they're breaking the law, and they wouldn't be here if people weren't employing them," he says. "If people paid a decent wage, you wouldn't have this problem." An infusion of workers from inside and outside the state would quickly fill higher-paying construction jobs in Arizona, says Steven Camarota of the Washington, D.C.-based Center for Immigration Studies, which supports tighter immigration controls. Construction unemployment is about 11 percent nationwide. And as the state with the fifth-youngest population nearly 27 percent of its residents are under 18 Arizona has access to plenty of native-born laborers, he says. At least in part, illegal labor has pushed down wages here, economists say.

Tucson construction workers earned an average of $14.42 an hour in March, compared with the national average of $19.53, the Bureau of Labor Statistics says. Local wages have not kept pace with inflation since 2001, despite a housing boom that has seen median new-home prices nearly double from about $140,000 to $267,000 over the same period. That indicates employers, knowingly or unknowingly, are tapping into a supply of low-cost illegal labor that holds wages flat, University of Arizona economist Marshall Vest says. "It has everything to do with supply and demand," Vest says. "If you have workers that are willing to work for a low wage, there is no way wages are going to move up." Still, those who argue that home builders and subcontractors could simply raise wages and lower their profits a bit, without raising home prices, don't realize how thin margins are due to increases in the costs of land, materials and impact fees, says Ed Taczanowsky, president of the Southern Arizona Home Builders Association. Nationally, the average profit margin for home builders dipped from 12.2 percent in 2002 to 9.8 percent last year, says the National Association of Home Builders.

The problem, Taczanowsky says, is too few legal residents want to work in construction. "The disconnect happened when the trades were looked down on as dirty, stinky work, and that had nothing to do with wages and everything to do with perception," he says. "Everybody has been taught to go to college and make something of themselves. No one has been told that you can earn a very good living working in construction." How we got here Baby boomers are moving out of construction as they age, and no generation is coming along to take their place, Taczan-owsky says. U.S.-born workers with a high school education or less those most likely to enter the construction field are opting for the air-conditioned confines of call centers and other jobs, says Camarota, who backs tighter immigration controls. That's especially true among the more highly educated and their ranks are growing.

Between 1960 and 2000, the number of U.S.-born men with at least some education beyond high school increased from 20 percent to 57 percent, a study by Harvard economists George Borjas and Lawrence Katz found. By contrast, 88 percent of Mexican immigrant men had a high school diploma or less in 2000, their study says. But what many of them lack in education, they make up for in experience, says researcher Rakesh Koch-har of the Washington, D.C.-based Pew Hispanic Center. Six of 10 Mexican immigrants working in U.S. construction jobs came here with direct experience, he says. While immigrants line up for jobs, some native-born Americans opt out of the labor force entirely, Camarota says. "They're sitting on their hands, living in Mom's basement or their cousin's couch," he says. They're not even drawn in by the potential to rise to supervisor and make $50,000 to $80,000 a year with good benefits, says Tommy Roof, vice president of TL Roof Associates Construction Co. "Most people, given a choice, would rather be sitting behind a computer than out there swinging a hammer," Roof says. Enforcement challenges Both the Senate and House bills would increase fines against employers and force them to verify workers' legal status. That's something government officials now can't adequately do, says drywall contractor Valenzuela, who didn't get where he is today dancing around issues even one as politically charged as immigration.

Valenzuela, 73, heads the nation's 211th-largest Hispanic-owned firm this year as listed by Hispanic Business magazine. He is, among other things, a Marine Corps veteran, former Man of the Year for the Tucson Metropolitan Chamber of Commerce, and former Small Business Leader of the Year for the Greater Tucson Economic Council. He's also the son of an illegal immigrant. "He became a citizen," Valenzuela says. "He loved this country. He wasn't here to scrounge off the United States." After the investigation three years ago, an immigration agent picked up one worker and demanded he fire 14 more, he says. "I asked her why they didn't pick up those other 14 workers, and she claimed they weren't sure whether they were legal or not, but that I should fire them," he says. Valenzuela asked the men, and they admitted their documents were fraudulent. "I told them they would be safer working with one of my competitors, so I lost 14 great workers to my competitors, and now some lawmaker wants to make me a criminal," he says. Any legislation that raises penalties on employers without improving verification tools places an unfair burden on business owners, says Jack Camper, president of the Tucson Metropolitan Chamber of Commerce. "We're very, very concerned about our employers, that they're going to be unfairly sanctioned by a system that is simply not working and not verifiable," Camper says.

Reversing the Trend
As the national immigration-overhaul debate swirls around them, some local home builders already are trying to attract more legal workers. Tuesdays and Thursdays find builder Les Wolf working his standard 10 hours, then heading to the Southern Arizona Home Builders Association headquarters, where he presides over a diverse group of construction-workers-to-be until 8 p.m. Students accepted into SAHBA's new Institute of Construction attend Wolf's classes at night and work five days a week for minimum wage, in six-week rotations with contractors of eight construction trades. A 35-year veteran of the home-building industry and owner of L.G. Wolf Co., Wolf acknowledges some exasperation with the lack of work ethic he sees in some native-born employees. Still, he says he is dedicated to turning out dependable, well-trained workers.

The institute's first class began in the fall with 50 students. Eighteen are still enrolled. "I don't care if I only graduate 10 students," he says. "They're going to be high-quality. They're going to be people I wouldn't be ashamed to employ." In addition to the institute, SAHBA received a $330,000 federal grant to develop high school training programs, and it's working with state legislators on a Joint Technical Educational District that would divert some state sales tax toward local vocational training. Evidence of abundant jobs To get a sense of the challenge employers face filling the need for workers in Tucson, check out newspaper job listings â€â€? on Sundays and Wednesdays you'll find more than 70 employers seeking construction workers. Or look at the stack of yellow fliers inside El Indio Mexican Food Restaurant, 3355 S. Sixth Ave. The ads tout carpentry jobs with "good pay" and "excellent benefits for you and your family." "This is your opportunity!" and "Call now!!!" reads the flier, every word of which is written in Spanish.


Source: 2006 The Arizona Daily Star Online. All Rights Reserved.

Has the notion that we may currently have more builders/developers in this country than necessary ever entered anyones mind? Removing the illegals will not mean lost jobs for Americans, but it may reduce the ranks of greedy developer/builders currently taking advantage of market forces that increase their profits above a range that should be expected. Cleaning out the illegals may mean some of the subcontractors may have to go back to their orginal jobs of framing/nailing/roofing, etc. vice running and supervising their own business. In the meantime, the average employees wages would increase to replace any loss to the economy. Would that be such a loss? Why should the housing/building market be able to prosper above normal expectations because of their ability to break the law by hiring illegals. This country is quickly getting out of sink with what should be by showing favor to those employers that would profit from the hiring of an illegal work force.

On top of everything else, I'm getting tire of hearing about more and more eminent domain cases. In another 30 years, the only wild animal your childrens children will see will be those in your local zoo. I say let's stop illegal immigration, slow legal immigration down, reduce the level of active homebuilders/developers, and deport all illegals currently in our country. Our resources are limited and the current pace of buildout is swallowing our wilderness, woods, pastures, farmland, etc. at an alarming rate. We must quickly gain control of an out-of-control population growth that is being fueld by illegal and legal immigration.

Actually it did occur to me. In my little corner of Florida the real estate boom is gone and the market has leveled out. There are currently roughly 7000 homes for sale at the moment the builders are building like crazy and in yesterday's paper it is reported a new planned development of 3400 more homes.

Actually it did occur to me. In my little corner of Florida the real estate boom is gone and the market has leveled out. There are currently roughly 7000 homes for sale at the moment the builders are building like crazy and in yesterday's paper it is reported a new planned development of 3400 more homes.

Yeah, and it will certainly be a buyers market, which basically means you'll lose appraised value from your own home until the market corrects itself. That would happen by eliminating the possibility of employers in that sector (housing market) from hiring illegal immigrants at reduced wages. The average citizen (by far the majority) is not benefiting in the least from illegal immigration, but you already knew that!

Glad to hear they are having problems ,I am a contractor in Florida I bid Jobs ,The same jobs the employers of illegals bid . My employees have workers comp ,insurance , benifits package . workers comp is required by law and is very expensive .

Longcut - Welcome.

I would not want to be in your shoes. Trying to bid against contractors who use illegal cheap labor. It has got to be stressful.

Hi ,thanks glad to be here . Heres something you might find interesting The Florida contractors manual states that if the only identification anyone has is AN EXPIRED VISA they cannot be refused employment and if you do not hire them because of that (expired visa) you are subject to equal opportunity violation .

I am not surprised at all. The Florida government is all for keeping the illegals around, look our 2 traitor senators and it does not take a rocket scientist to figure out were our governor stands. I have very little hope of making any headway in our state. I was looking into the sheriff of the county I live in and they have an illegal immigrant advocate on staff to help them with their problems so I know where the sheriff's office stands.

A friend of our family is a contractor and has been for years, in fact he inherited the business from his father. He said he has a very hard time trying to figure out who is illegal with all the fake documents, let alone trying to bid for jobs against contractors using illegals and underbidding.

Has anyone seen any good stats on how illegals have been impacting the housing boom the last couple of years? We all know the banks are catering to illegals and bending over backwards to finance them. Have they also been artificially propping up the real estate industry by encouraging illegals to purchase real estate? It's a notion I've been knocking around in my head for awhile--if we somehow did deport the illegals tomorrow, wouldn't the housing shortage (esp. here out west) suddenly become a surplus for people with legal status? I realize that there would be other implications on home values and construction activities and industries dependent on construction activitites, etc., but I would be glad to see some cessation of new construction, wetlands drainage, etc. Anyone seen any articles or stats on this?

Has anyone contacted ICE about that contractor who acknowledges hiring illegal aliens (not that it would probably accomplish anything anyway).


An aide quoted the president as saying about the Constitution, "It is just a g-d damn piece of paper".