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Pressure driving up paychecks
Stricter immigration enforcement hits builders in the wallet

BY DEVONA WALKER


One outcome of both the legislative and enforcement attention being focused on the immigration issue could be an unintended one: higher wages.

After nearly a decade of relatively few arrests of undocumented workers, thousands have been rounded up in the last two months, with the largest action netting more than 1,000 people.

That already is making some employers think twice about hiring undocumented workers and it is making some job seekers nervous about work in highly scrutinized trades, such as construction.

The potential in Florida for wage pressure is enormous for two reasons: a job market that is as tight as it has been in the last 30 years, and the critical position that immigrants, particularly Latinos, have in one of the Sunshine State's seminal industries -- construction.

With new, more stringent regulations being talked about at the U.S. Department of Homeland Security, even without action by Congress this year, enforcement is going to rise, and with it, wages.

"It's already gotten tougher to hire people who are not legally authorized to work," said Wendy Smith, an immigration attorney with Tampa's Fisher & Phillips law firm. "There is not a whole lot of evidence that American citizens are going to step up to take these 12 million jobs.

"So wages, especially in low-paying job sectors, will be driven up."

Last year, Wal-Mart executives dodged potential criminal charges for hiring hundreds of undocumented workers, but more recent enforcement by Homeland Security has targeted employers as well as employees. That has increased the pressure on employers to avoid undocumented workers.

In mid-April, for example, seven current and former managers at IFCO Systems, a maker of wooden pallets, crates and containers, were arrested on criminal conspiracy charges for transporting, harboring and encouraging illegal workers to continue working for the company. They were arrested as part of an operation by Homeland Security targeting 1,187 undocumented workers at 40 separate IFCO plants in 26 states.

Meanwhile, Homeland Security has proposed a significant regulation change where it would use mismatched Social Security numbers used for employment to immediately investigate whether it involves undocumented workers. Those new rules will likely be in place at the federal level within the next two months, with or without comprehensive immigration reform.

"Now, we can only request those no-match letters once we have a lead that an employee is hiring undocumented workers," said DHS spokesperson Joanna Gonzalez. "This regulation would allow us to use those no-match names as leads."

The net effect: an immediate drop in the cost and the speed of job-site enforcement, Gonzalez said.

Construction feeling the heat

Some Southwest Florida construction sites already have begun to feel the heat, said Edie Ousley, a spokesman for the Florida Home Builders Association.

"There's been rumors of increased enforcement, so there's been some no-shows at job sites," Ousley said.

By some estimates, half of all Florida construction jobs are now filled by Latinos.

It is an industry that the Florida Agency for Workforce Innovation says is struggling to fill as many as 13,000 vacant jobs to keep up with demand.

There already has been considerable wage pressure in construction.

In the last five years, construction wages have risen 5 percent nationally -- from about $739 per week to $779 per week -- but 9.1 percent, from $646 to $705, in the Sunshine State, according to the Bureau of Labor Statistics.

In Sarasota, Manatee and Charlotte counties, increases have averaged about 8.3 percent.

George Borjas is usually the academic arguing that wages have been driven down in many low-paying job sectors by immigration. But the vocal opponent of allowing undocumented workers into the U.S. acknowledges that stricter enforcement will undoubtedly have the reverse effect.

"There is no arguing that labor shortages raise wages and that labor surpluses push them down," Borjas said. "By limiting the number of undocumented workers, there will be more competition for labor and less competition for work. This will drive up wages."

Greg Schell, an employment attorney from Lake Worth who has represented undocumented farmworkers for more than 28 years, said job-site enforcement that involves both the employee and employer is critical to getting a handle on the undocumented worker issue.

"Through all the tough talk -- yes, we are going to build more fences and we will probably start deporting more workers -- but unless we start penalizing employers, they will say 'Well, I guess I will just go out and find some more workers,'" he said.

Schell said that wages in essential, low-paying job sectors will have to rise, and for other "non-essential" jobs, choices will have to be made.

Nowhere is that more true in agriculture, the "canary in the coal mine" for labor phenomena.

"A lot of these low-wage jobs, someone's gotta perform. But there are some industries that are going to have to make decisions -- they are either going to mechanize or go abroad," Schell said.

"In a way, innovation and mechanization has been stifled by cheap labor; that's especially true in agriculture."