Hamilton Herald Masthead


Front Page - Friday, August 17, 2018

Build the wall or buildings? Industry leaning on immigrants

Contractors say they’re hiring ‘everyone they can, legal or not’

President Donald Trump draws raucous approval at his rallies when he rails against illegal immigrants with such applause lines as “we’re sending them the hell back!” and “Build the Wall.”

But those sentiments send chills through the commercial real estate industry – contractors, bankers, developers, etc. – especially in areas like Middle Tennessee where the building boom is requiring a massive influx of skilled and unskilled labor.

Those who earn their living in construction, hospitality, farming and other industries that rely heavily on immigrant labor are keeping an increasingly close eye on travel bans, stepped-up deportations, guest-worker visa reductions and other hallmarks of the Trump era.

In short, if we decide to build a wall, will the people who build just about everything else still come or be allowed to stay? If not, are there enough people in a labor market like Tennessee’s, with a jobless rate of less than 4 percent (less than 3 percent in Nashville and the state’s other metro areas) to pick up the slack?

“We are in the middle of a real estate boon with not enough people to work it,” says a Nashville home remodeler with more than 15 years’ experience in the Nashville and Chattanooga markets who wishes to remain anonymous.

“It’s basic economics: too many jobs, too few people. Remove even some of them and everything stops.

“People have got to let go of this idea that there is a large group of white, unemployed, skilled carpenters sitting around just itching for a place to work. They’ve got jobs, too.”

It’s an issue of numbers and perception.

Leaders in the state’s construction industry, which is heavily layered with contractors, subcontractors and sub-subcontractors for the various components of a job, are very clear that they are not rushing out to hire undocumented immigrants at the expense of “regular” laborers.

In fact, those at the top of that chain don’t do much hiring at all. By the time a job gets down to subcontractors tasked with roofing, carpentry or the HVAC installation homes, hotels, office buildings or whatever else is under construction, there are multiple levels of engagement between the main builder and the actual workforce.

“The undocumented workers tend to be hired at the ground level, and that’s who you get alongside people who are here on work visas, or who have been naturalized, as well as U.S. citizens,” the same contractor explains.

“And those people are going to continue to be hired. Eighty percent of construction is subcontracted work, and there simply are not enough citizens, naturalized or otherwise, here to do it all.

“It’s tight even during a regular period anywhere in Tennessee, and almost impossible with the kind of growth Nashville is seeing.

“My counterparts in Knoxville and Chattanooga will tell you the same thing. It’s not that they’re playing favorites and hiring cheaper workers – they are hiring everyone they can, legal or not, to get the jobs done.”

Undercutting wages?

Many who would curtail immigration and crack down on those here illegally or on guest-worker visa say those who are not U.S. citizens are taking jobs from those who are or are driving down wages.

“We’ve seen significant reductions in wages for blue-collar workers, massive displacement of African-American and Hispanic workers, as well as the displacement of immigrant workers from previous years who oftentimes compete directly against new arrivals who are being paid even less,” Trump senior policy advisor Stephen Miller said last August.

At the time, Miller was defending legislation that would greatly curtail legal immigration and recategorize the categories and volume of specific worker visas. His claim was swiftly rebutted by economists and critics who responded with statistics of their own making the claim that immigration and immigrants are a boon, not a threat, to the U.S. economy.

And while this particular shouting match had to do with legal immigration, many of its overtones carry over into the conversation around undocumented workers.

In Nashville, for instance, builders tend to pay for quality and experience, the contractor says, noting that pay rates for undocumented workers are on par with those of their legal counterparts. In his experience, he adds, they do not work cheap to avoid scrutiny and potential deportation.

“These people came here to make a good living, not to live in squalor,” he says. “I have tradesmen who have worked with me for 15 years, and they are outstanding at what they do.

“They are not hiding. They have bank accounts, or they have available outlets to cash their checks. They are embedded in the community; many are homeowners and they have children in public and private schools.

“They have a church community. They are heavily involved in their family’s social life. They have Facebook pages. Their wives, legal are not, often are working and equally present in the community.”

Jose Gonzalez, co-founder and executive director of Conexion Americas and an instructor of entrepreneurship and management at Belmont University, agrees – to a point.

“In a free market, you charge what the market will pay,’’ Gonzalez explains. “Yes, there is downward pressure on wages from employers who are unscrupulous and hire and pay less than they would an American citizen – but they are not hiring American citizens because that would cut into their profits.

“For the most part, we see employers paying very competitive wages to everyone, because they want to keep good workers.”

Federal actions

The undocumented-laborer issue gobbles up the headlines, but other non-citizen groups also are facing challenges in today’s climate.

For instance, losing guest-visa workers and others here with the proper paperwork as part of a larger purge or reduction in admission is definitely on the minds of employers throughout Middle Tennessee, notes Kellye Branson, department director for refugee and immigration services at Catholic Charities of Tennessee.

“My department serves refugees, immigrants and those who have sought asylum, all of whom are legal residents,” Branson explains. “And we are seeing an influx of employers who are desperate because they are seeing a reduction in the employees they want to bring back but who cannot get their H1-B visa renewed.

“You combine that with refugee entrants’ numbers being reduced so drastically, and we’ve got more employers than employees. I’ve sat with companies and staffing agencies who say they have 50 people they want to bring back who can’t get that visa.”

On the refugee front, Branson says that her agency worked with 637 people during its last fiscal year compared to 110 so far in the current fiscal year that’s 75 percent complete. And cutbacks at the U.S. State Department, particularly in overseas processing staff, also are gumming up the works even for those who can get a visa to come – or return – here. That vacuum is not being filled by locals, most of whom already have employment.

“What I say to anyone who says an immigrant is taking a job from an American is that our clients are going after the same jobs and opportunities as any other legally authorized individual is, and they certainly are not getting any special benefits,” Branson points out.

“It’s not like employers are getting bonuses for hiring them.”

Augmenting local workers

Another angle to the undocumented worker issue is that often a change in citizenship status comes over the course of time, so today’s undocumented employee may be tomorrow’s legalized resident.

Many immigrants do wish to pursue a path to citizenship and come out of the shadows, and having that pathway available is helpful for the construction industry, says David McGowan, president of Regent Homes & Companies.

“I am certain that there are subcontractors in Nashville and elsewhere in Tennessee who are employing undocumented folks, but most builders who have been around for a while are focused on using people who are here legally,” McGowan explains.

“But that doesn’t mean that they don’t want to work with people who are going through the naturalization process. I remember a bricklayer who worked for us getting his citizenship, and how happy he was. The bottom line is that we have an industry that has a shortage of workers, and many are going to get them wherever we can.

“Now we are fighting with the hospitality industry, because when the weather’s cold or bad and people can’t lay bricks, for example, they go and do housekeeping or something along that line. Then we have to battle to get them back.”

As a board member of the state’s Go Build Tennessee program for training young people in the construction trades, McGowan is promoting efforts to create a pipeline of workers who are native-born, as well.

“You can have undocumented people and worker-visa people, and that’s not enough,” he adds. “Immigrants are coming here to work because they are skilled and because there are jobs, and that’s why they stay. We need skilled talent, not just raw labor, to keep growing our construction industry and economy.

“We have to work to get young people into trade schools and get that training, so we can build the workforce that way as well.”

Numbers hard to pin down

There’s also the matter of the sheer volume of undocumented workers in a particular city, county or region of Tennessee. They are everywhere, from urban construction to rural farming communities. It’s hard to count a population that is hiding in plain sight, but if they go, their absence would be felt immediately, Gonzalez explains.

“With the labor market so tight in Middle Tennessee, even if a small percentage of the population left it would be very detrimental to many segments of the economy,” Gonzalez says. “Not a week goes by that we don’t receive requests from the hospitality, construction and restaurant industries asking how we can partner and get the word out to people because they need workers. Every week.

“There already aren’t enough people to fill the jobs that exist. I spoke to a prominent restaurant group about a month ago, and its leaders said that if I got them 60 people the next morning that wouldn’t be enough. Some hotels may not be able to sell rooms as quickly as they would like because there aren’t people to service them.”

How many undocumented workers are there in Tennessee?

The numbers are all over the board, but there are some fairly concrete stats at the national level (see sidebar).

Gonzalez says for Middle Tennessee he hears figures of anywhere from 50,000 to 100,000, and that’s down from 15 or even 10 years ago, not up.

“The Latino community here is growing, and will continue to grow, but most of the people who have moved here in the last seven or so years are documented; many are American citizens, are naturalized citizens. They are coming from other places, like Texas or California, not from other countries,” he explains.

Jobs market not the only source of potential change

Pivoting away from jobs, Gonzalez also spends time monitoring the other ways in which the immigrant community affects the local economy. For instance, many undocumented workers are at the mercy of landlords who know their status and don’t offer the best quality housing. What happens if they go?

“OK, you take 1,000 families and move them out. Yes, that inventory is available, but who wants it? What shape is it in, and what part of town? Is that landlord going to fix it up?” he asks.

“We hear a lot about the conditions of the housing stock that undocumented workers are in, and while their absence would make availability numbers go up, I don’t see people rushing to rent those places,” he says.

And setting aside all the issues around legality, not to mention competition for jobs, public services and other flashpoints, who would suffer most if a large swath of the immigrant community is spirited away? Likely everyone who’s left, Gonzalez predicts.

“We love a thriving economy, one that gives us all these new culinary opportunities, for example,” he says. “We love the buildings. We love the growth. We want to see more of that money coming in, and when we earn it, we upgrade our kitchens and remodel our houses.

“A broad segment of that renovation economy is supported by these workers, whether they are undocumented or here on guest visas. And they are invisible. When you go to that nice restaurant, those workers are in the back washing dishes or cooking. They are making the bed at the hotel. They are doing jobs that are very important to the economic engine that fuels growth.”

Branson agrees, adding her agency is seeing not just hospitality and construction but also landscaping and warehouse companies come in seeking workers. And the more they struggle, the more likely a slowdown seems.

“We’ve had people call from as far away as Waverly and say they could take 10 people right now, and we haven’t had them,” she points out. “And sometimes we’ve had the people, but the wages haven’t been enough.

“Employers are figuring out that $10 an hour isn’t going to cut it, and people want benefits. It might be different for undocumented workers, but I doubt it’s off too much. Employers are feeling the grip, and workers know that.

“For us, we don’t know what’s going to bring relief on legal immigrants other than some significant increase in the number of visas allowed, and more guest-worker programs.

“There are all kinds of positions out there that need to be filled, and employers are going to keep struggling to find people to fill them.”

So, all said and done, back to what would happen in Nashville and Tennessee’s ongoing and robust construction economy if undocumented and, to a degree, documented labor went away overnight, or in a period of weeks or even months?

“It would blow a huge hole and probably cause a recession locally,” the contractor says. “It would just kill the homebuilding and construction industry from the ground up. Not because they couldn’t afford wages – my guys are making $30 an hour because they’re good. It’s because the industry has ossified.

“There just aren’t enough Caucasian tradespeople, at least not in this part of the country.”