Clean Sweep?

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No one knows exactly how much housing depends on illegal immigrant workers in the construction trades. Home builders are relying more every day on immigrant labor to fill the void left as a whole generation of experienced baby boomers retires from the subcontracting trade companies that actually put the industry together.

August 01, 2006

Sidebars:
Contrasting Immigration Bills
Who's Next?

If you're like most home builders, you're already caught in the passionate debate over immigration reform sweeping America and as likely as anyone to rue our porous borders in an age of terrorist threats. Before you pitch a fit of indignation over the 12 million foreign nationals living illegally in the United States, give some thought to what it would be like to build — and sell — houses without them here.

No one knows exactly how much housing depends on illegal immigrant workers in the construction trades. Home builders are relying more every day on immigrant labor to fill the void left as a whole generation of experienced baby boomers retires from the subcontracting trade companies that actually put the industry together.

Some share of the immigrant workforce is illegal, with the highest concentration in Sun Belt states, where housing markets are strongest. If illegal immigrants are deported and if the flow of foreign construction workers into the U.S. is cut off, labor shortages will drive up costs. How much so is unkown.

Last spring, both houses of Congress passed immigration reform bills that authorize an attempt to close American borders to illegal immigration and enforce more punitive sanctions against employers who hire illegal workers. Unfortunately for those who want swift action, the two bills are vastly different in how they deal with illegal immigrants already in the country and the need for more immigrants to keep the economy humming.

An Industry Divided

Congress is as divided as the country on what to do about illegal immigrants already working in the United States. Each party caucus has a chasm, and the housing industry also has a split personality. "NAHB adopted an official position on immigration a year ago, at the 2005 fall board of directors meeting," says Jenna Hamilton, NAHB's assistant staff vice president for legislative relations. "That policy says we support comprehensive immigration reform and a new visa system because the current one is obviously broken. There's a bias built into it favoring people with higher education and those with job skills valued by large corporations. It's slanted against people who work with their hands. The U.S. even calls them 'unskilled labor,' while builders call them 'skilled trades.' We have too few Americans capable of this work, much less willing to do it."

Hamilton says it's vital for housing to have immigration laws that reflect the reality of its urgent need for labor and a system that will allow people now working illegally to find a path to permanent legal residency.

Yet, she admits, many builders don't see it that way. "Every time we put out a policy statement, I get nasty calls and e-mails from members who don't agree with NAHB's position. It really breaks down like the split in the Republican Party. There's a wing of our membership that just doesn't want to see anyone rewarded for breaking the law."

But another wing of NAHB membership takes the attitude that housing really needs immigrants, Hamilton says. "They believe we should give them a chance to pass a background check and prove they are good people who deserve an opportunity."

Hamilton says one builder argued that if builders and their subs pay enough, they'll find Americans to fill construction trade crews. "I told him I don't know any subs who are paying minimum wage for framers and trim carpenters," she says, "and if you start paying $100,000 to roofers, who will be able to afford the house?"

However, many builders are so passionate about their politics that they are willing to sacrifice economic self-interest. But that may not last if it jeopardizes their ability to make a living. One of the problems is that no one knows exactly what percentage of housing's labor force is undocumented, so it's impossible to gauge how much it will raise costs if illegal immigrants are removed from the equation.

What We Do Know

The Pew Hispanic Center in Washington is hailed as the authority on the illegal immigrant population. Senior research associate, Dr. Jeffrey S. Passel, published a report in March this year estimating the total illegal population at 11.5 million to 12 million.

The total was 11.1 million a year earlier. Some 7.2 million unauthorized were in the American labor force in March 2005.

About 19 percent of unauthorized workers in March 2005 were employed in what Passel calls "construction and extractive occupations."

NAHB's Natalia Siniavskaia published a paper on immigrant workers in construction trades in December 2005, analyzing the 2004 American Community Survey (ACS) from the U.S. Census Bureau. That data showed more than 15 percent of the total American workforce was born abroad. But the percentage for construction trades was even larger, around 20 percent. (ACS does not separate residential and non-residential construction.)

The study shows that 22 percent of carpenters and 32 percent of construction laborers were immigrants.

The percentage of immigrant construction labor that is undocumented is tough to figure, says NAHB economist Michael Carliner. "A key to what percentage is illegal is what share is from Mexico," he says, "because Mexicans are more likely to be illegal. I've seen data that suggests the flow of illegal immigrants peaked between 1999 and 2002 and has been somewhat lower since. But nobody knows for sure.

"The important point is, illegal immigrants working in construction are not just warm bodies," Carliner asserts. "They have significant skills that are in short supply in this country. What's surprising is how widespread dependence on immigrant labor is.

"Even in places like Chicago and Birmingham, Ala., we see immigrants dominating the job site. That's a long way from the Mexican border. The government should recognize we need people who can work with hand tools as well as computers."

As a builder, wherever your economic self-interest seems to fall on the Senate side of immigration reform, unless you like the idea of $100,000 a year roofers. Your votes in November might influence which way this goes.

 

Contrasting Immigration Bills

Senate

On Mexican border control:

  • 370 miles of new triple-layer fencing
  • 500 miles of vehicle barriers
  • 1,000 border patrol agents this year
  • 14,000 more border patrol agents by 2011 (the force currently numbers 11,300)
  • Add detention facilities for apprehended illegal immigrants
  • National Guard tours on the Mexican border limited to 21 days

On handling people who aid and abet illegal immigrants:

  • Within 18 months, employers would use electronic system to verify new hires are legal
  • The maximum fine for hiring illegal immigrants would increase to $20,000 per worker
  • Repeat offenders would receive jail time
  • English would be established as the national language

On current illegal immigrants:

  • Those in the country for five years would remain, continue working and eventually become permanent legal residents — after paying at least $3,250 in fines and fees, paying back taxes and learning English
  • Those in the country two to five years would go to a border entry point and file an application to return
  • Those in the country less than two years would leave
  • Those convicted of a felony or three misdemeanors would be deported, no matter how long they have been in the U.S.
  • A guest worker program for 1.5 million farm workers, who then become eligible to earn permanent legal residency
  • The number of H1-B visas for skilled workers would increase to 115,000 a year (from current 65,000) beginning in 2007. Immigrants with advanced degrees are not subject to caps, which can rise 20 percent depending on demand.
  • 200,000 new temporary guest-worker visas per year

House

On Mexican border control:

  • 700 miles of double-layer fencing
  • Mandatory detention of all non-Mexican illegal immigrants arrested at ports of entry or land and sea border points
  • Mandatory sentences for smuggling illegal immigrants
  • Mandatory sentences for illegal re-entry after deportation

On handling people who aid and abet illegal immigrants:

  • Felony for anyone to assist, encourage, direct or induce a person to attempt to enter or remain in the U.S. illegally
  • Within six years, all employers would use a database to verify legality of social security numbers of all employees
  • The fine for employers of illegal immigrants would rise to a maximum of $40,000 (from current $10,000) per violation
  • Repeat offenders would receive prison terms of up to 30 years

On current illegal immigrants:

  • Illegal residency in the United States would be a felony
  • Penalties for first-time illegal entry would increase
  • Driving under the influence conviction would be a deportable offense

Who's Next?

Henry Fischer's four supers, in handcuffs, send a chilling message to builders everywhere: Keep your own I-9s handy. Don't slip up. ICE is hard.

Giant Fischer Homes, headquartered in the Cincinnati suburb of Crestview Hills, Ky., seems an unlikely target for an Immigration and Customs Enforcement (ICE) sting, but that's just what came down in mid-May, when four superintendents were arrested and charged with aiding and abetting a subcontractor who was bringing in illegal immigrants.

Fischer closed 1,150 homes last year for $244.3 million in housing revenue and ranked No.114 in Professional Builder's Giant 400 unveiled last April. But Fischer's stellar reputation didn't cut it.

Several months removed from the glare of image-killing TV news flashes, it now looks like Fischer may have been sucker punched. But keep your guard up.

Framing contractor Robert Pratt may have been the real target of the sting; he's under house arrest. Fischer Homes has not been indicted, but Fischer Homes' President Bob Hawksley's supers will go on trial Sept. 11. "We are supporting their defense," he says. "The only evidence against them is they were told some of the framer's people were illegal, and they didn't call us about it.

But our guys were led down the primrose path — told they were helping a murder investigation, not an immigration sting against a trade contractor. If I put you in that circumstance, you wouldn't call anyone either."

NAHB director of legal research David Crump says there's a question about ICE's tactics. "It could be entrapment," he says. "But it's a violation of the Immigration Act of 1986 to knowingly use undocumented labor. The issue is knowledge. A builder has no liability for a sub's compliance with immigration law. The I-9 forms are the employer's responsibility. There are innuendos that ICE would like all builders — as general contractors — to be responsible for their subs. But that's not the law."

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