What Legalizing Illegal Immigrant Labor Might Mean For The Construction Industry

Jan 23, 2013

Illegal immigrant laborers are plentiful in the construction business, and sometimes they compete for jobs with legal workers. Jill Replogle reports on what legalizing undocumented laborers might mean for the construction industry.

Credit WorldNetDaily

At around 8 o'clock on a Wednesday morning dozens of workers are building a large apartment complex just across the street from San Diego State University. They'll soon go on their morning break. They have steady jobs. They're covered by workman's comp if they get injured.

But less than 3 miles away, there's no construction going on at all. Groups of men huddle outside a Home Depot, waiting for someone to drive by and offer them a job. This is a scene that plays out every morning all across the country. As many as one in six construction workers is undocumented. But does this group compete with the workers at the apartment complex for jobs? Sometimes.

David Yanora is a heavy equipment operator. He says he personally doesn't face much competition with undocumented immigrants because his is a more skilled trade. He says, "most of these guys out here are just out here as laborers. They don't have a specific trade they're good at, they can just pretty much do anything." The dirtiest, most back breaking jobs. The ones that don't require much skill - that's where there can be competition. Yanora says, "big companies are looking for people that can work cheaper. That's just the bottom line."

Often, they are cheaper. They usually can't afford to be picky, so their wages vary a lot. Some  undocumented workers says they can make $150 one day and $50 the next. They say that's how it goes when you do this kind of work without proper immigration papers.

So imagine - and it may not be so far off - that tens of thousands of  construction workers do get paperwork and can legally compete with their colleagues up the street. Won't they take jobs from Americans? Won't they depress wages for native workers? Economists say not likely because these undocumented workers are already in the labor force. They're already working.

If immigration reform is well policed, there will be no more paying undocumented workers under the table. Contractors would have to pay workers' comp and payroll taxes for newly legalized employees, which means construction costs go up. On the flip side, that could help companies which have always played by the rule  compete. Mike Loftus is a plasterer in San Diego and would like to see the playing field leveled. He says, "it'd really help if everybody had their papers...a lot."

The bigger issue, economists say, is fiscal. How will legalizing undocumented immigrants affect tax revenues and social welfare programs? Newly legalized immigrants who don't already pay taxes will start paying and that will be a boon to public coffers. But they may also qualify for federal benefits, like food stamps and tax credits. Pia Orennius is senior economist at the Federal Reserve Bank in Dallas and says, "legalization is really more a problem down the line if you think that these people are going to be disproportionately using welfare programs or entitlement programs." Many economists believe that issue will hotly debated and may affect how a reform bill is crafted.

The biggest benefit of a path to legalization will be to the undocumented workers themselves. Most economists say their wages are likely to go up. They may have more job security and legal recourse if they get injured or stiffed by an employer. And for many undocumented workers, that is preferable to waiting in front of Home Depot hoping for work for one day.