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Yesterday and today, NPR's Wade Goodwyn did a two-part series on shocking practices in Texas's construction industry.  At least, it should be shocking to anyone from outside the Lone Star State.  Lately, it's been possible to get a lot of house in Texas for a little bit of money.  For instance, five-bedroom houses in Fort Worth can go for as little as $160,000.  But Goodwyn found those cheap prices are possible in large part due to an industry where disregard for the law and workers' rights has gotten to the point where it's nearly impossible to stay in business if you want to do things legally.

In Part 1, we found out that Texas' construction workers--almost half of whom are undocumented immigrants--are getting screwed eight ways to Sunday by wage theft.

The economic collapse of 2008 brought with it an onslaught of wage theft, according to the Austin-based Workers Defense Project. At the end of the week, construction workers sometimes walk away with $4 or $5 an hour, sometimes less, sometimes nothing.

"Ninety percent of the people who come to our organization have come because they've been robbed of their wages," says Cristina Tzintzun, the Workers Defense Project executive director.

The organization has co-authored a report with the University of Texas, Austin, that examines working conditions in the Texas construction industry. For more than a year, WDP staff and University of Texas faculty canvassed Texas construction sites, surveying hundreds of workers and gathering information about pay, benefits, working conditions and employment and residency status.

Cheated workers keep working, Tzintzun says, because contractors dangle wages like bait from one week to another, paying just enough to keep everybody on the hook.

And that's just those who are willing to talk.  Many more workers are afraid to complain for fear of being deported.

Many of these workers are also getting little or no pay to work in the most unsafe conditions in the country for construction workers.  The WDP-UT study found Texas construction workers die at a rate of 10.7 deaths for every 100,000 workers, more than the national average and more than double that of California's 5.2 deaths.  Also, Texas is the only state without mandatory workers' comp, meaning that when workers go to the hospital, taxpayers end up footing the bill.  Considering one out of five Texas construction workers ends up in the hospital, that can add up.

A lot of contractors aren't just cutting corners on safety.  They're cheating the government out of tax revenue by illegally classifying their workers as independent contractors rather than employees.

It works like this: Pretend you're an interior contractor, drop by the Home Depot parking lot and pick up four Hispanic guys to install Sheetrock for $8 an hour.

By law, these men are your employees, even if just for the day. But in Texas, as in many other states, it's popular to pretend they're each independent contractors — business owners. Which means you are not paying for their labor but for their business services.

With this arrangement, the contractor — you — don't have to pay Social Security taxes or payroll taxes or workers' compensation or overtime. Instead, you pretend the undocumented Hispanic worker you've just paid in cash is going to pay all those state and federal taxes out of his $8 an hour himself.

"Our estimation is that there's $1.6 billion being lost in federal income taxes just from Texas alone," says the Workers Defense Project's Tzintzun. The report estimates that $7 billion in wages from nearly 400,000 illegally classified construction workers is going unreported in Texas each year, resulting in billions of dollars in revenue lost owing to institutionalized statewide payroll fraud.

According to part 2, though, if you want to run a construction business in accordance with the law and basic decency--that is, pay your workers decent wages and pay all your taxes--it's next to impossible to stay in business.  Stan Marek, owner of one of the largest contractors in the state, puts it bluntly--"There's no way you can compete."  

Goodwyn also talked to "Trent," the owner of a landscape construction company, who openly admits he improperly classifies his workers as independent contractors.  He also may be cheating them out of wages--his workers get paid a fixed amount per project in cash, and don't get more if things run behind schedule.

Sounds to me like the Texas real estate market is like Walmart--you may be getting things cheap, but in truth the price is way too high.

Originally posted to Christian Dem in NC on Thu Apr 11, 2013 at 06:42 AM PDT.

Also republished by TexKos-Messing with Texas with Nothing but Love for Texans and In Support of Labor and Unions.

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Comment Preferences

  •  Note: (10+ / 0-)

    Texas is the only state in the nation without mandatory workers' compensation.  It is a dangerous place to try to make a living.

    Be the change you want to see in the world. -Gandhi

    by DRo on Thu Apr 11, 2013 at 06:55:23 AM PDT

    •  asdf (3+ / 0-)
      Recommended by:
      JerryNA, trumpeter, DRo
      no benefits from workers' compensation are paid at all in more than 60 percent of work-related fatalities in Texas - a figure that is likely higher when limited to the construction industry, according to recent data from the Texas Department of Insurance.

      "No one life is more important than another. No one voice is more valid than another. Each life is a treasure. Each voice deserves to be heard." Patriot Daily News Clearinghouse & Onomastic

      by Catte Nappe on Thu Apr 11, 2013 at 09:05:58 AM PDT

      [ Parent ]

  •  This is absolutely true. I was a framing carpenter (7+ / 0-)

    in rhe 90's and I was a contractor in the early part of this century.
    I paid my guys well, but I left the business because it was impossible to compete.

    The flood of immigrant labor caused a precipitous drop in the profit margin. I don't know what the status is now, but if they're still building houses, this is the way it is. I do handyman work now.

    You can't make this stuff up.

    by David54 on Thu Apr 11, 2013 at 07:00:19 AM PDT

  •  Not just in Texas (9+ / 0-)

    After the recession the wages have gone down all around in the South. Of course people working for nothing are part of the problem. Most people, Hispanics I know, in construction work from down till dusk, around 60 o 65 hours a week. Of course no extra, all hours paid the same. No paid vacations. No using much of unpaid vacations or they wont call you again. No sick pay. If it rains you don't work and don't get paid (even though you have been working for the same company for years). In many cases bosses that bitch about "long" lunches or to many bathrooms brakes....The list is too long really. Even more specialized jobs that used to pay well like heavy machinery driver are now $15h

  •  This is construction everywhere, not just TX. (12+ / 0-)

    Brutal way to make a living. I hadda drop out at age 35 because my body wouldn't take it anymore.

  •  No wonder they don't want Legal workers. nt (5+ / 0-)
  •  Gov. "Goodhair" Rick Perry's big donor: (5+ / 0-)

    the OTHER Perry. Bob J.  Perry, of Perry Homes.

    In 2011, Perry donated $2,531,799 to Texas Governor and United States Presidential Candidate Rick Perry (R, TX) toward his Presidential campaign.

     . .

    In 2006, Perry was the largest political donor in Texas. His donations included nearly $400,000 to the campaign of GOP Governor Rick Perry (no relation).

    May I take a wild guess that this Perry (and the Gov.) benefit from stealing from construction workers here in the Lone Star state?

    I'm part of the "bedwetting bunch of website Democrat base people (DKos)." - Rush Limbaugh, 10/16/2012 Torture is Wrong! We live near W so you don't have to. Send love.

    by tom 47 on Thu Apr 11, 2013 at 07:25:14 AM PDT

    •  Which gives a good idea on where this will go (5+ / 0-)
      Recommended by:
      dewtx, JerryNA, trumpeter, DRo, Oh Mary Oh
      I filed House Bill 475, which would require all construction contractors to carry workers' compensation insurance for their employees. Recently heard in the House Committee on Business and Industry, this measure would ensure that injured construction workers have the ability to get their medical needs addressed in a timely fashion, so they may recover from their injuries and return to work.

      The Texas Legislature is also considering legislation to stop misclassification of employees as independent contractors and to guarantee periodic breaks for construction workers so they can survive our oppressive Texas heat. These and other bills all go toward ensuring that our hard-working construction workers are not treated as a disposable commodity, but as valued members of our community.

      Walle, a Democrat, represents Texas House District 140.

      "No one life is more important than another. No one voice is more valid than another. Each life is a treasure. Each voice deserves to be heard." Patriot Daily News Clearinghouse & Onomastic

      by Catte Nappe on Thu Apr 11, 2013 at 09:09:05 AM PDT

      [ Parent ]

      •  Huhnh! Then he up and (0+ / 0-)

        died on like Friday or Saturday. Karma? Justice? Coincidence? I dunno.

        I'm part of the "bedwetting bunch of website Democrat base people (DKos)." - Rush Limbaugh, 10/16/2012 Torture is Wrong! We live near W so you don't have to. Send love.

        by tom 47 on Tue Apr 16, 2013 at 05:48:31 PM PDT

        [ Parent ]

  •  I was a builder in the New England 80s (10+ / 0-)

    It's not just Texas. The construction business is run the same everywhere.
     1099s are cheaper and easier to hand out than payroll taxes and workman's comp. State Governments know this to be the way of the business, and do little to force business to change.
     In 1987 I paid my top carpenters $25 per hour, helpers were paid $15 (all were "on the books", not 1099). Here in 2013 NC, I see top carpenters being paid $15 (and 1099 status). So things have not only not changed. They've gotten worse.
      It's a "rob Peter to pay Paul" business. Profits are used to pay past bills. New business monies are used to finish last projects. The builders that outlasted me, were the ones who underpaid, avoided legitimate tax burdens, and underperformed for their customers.
     BTW: 1987, Black Monday did me in. The spec houses instantly became worth less than their costs. This is exactly what happened in this last bubble.

    "The United States is a nation of laws: badly written and randomly enforced." -Zappa My Site

    by meagert on Thu Apr 11, 2013 at 07:28:01 AM PDT

  •  They are not only cheating the workers. (5+ / 0-)
    Recommended by:
    suesue, 6412093, dewtx, JerryNA, trumpeter

    They are taking architectural shortcuts.

    Don't believe me? Purchase a square and make a plumb line and visit newly built homes and see how true they are.

    "Til you're so fucking crazy you can't follow their rules" John Lennon - Working Class Hero

    by Horace Boothroyd III on Thu Apr 11, 2013 at 08:12:48 AM PDT

  •  Republished to TexKos where this will come (2+ / 0-)
    Recommended by:
    Catte Nappe, txcatlin

    as no surprise to most of us. It's the yucky underside of the "Texas Miracle". Housing costs here are absurdly low... if you ignore the carnage and just look at the price of a new house.

    Those who do not understand history are condemned to repeat it... in summer school.

    by cassandracarolina on Thu Apr 11, 2013 at 08:31:21 AM PDT

  •  Not just construction (3+ / 0-)
    Recommended by:
    Catte Nappe, JerryNA, Oh Mary Oh

    Right now Texas is looking at contract workers,but over the past 10 years a lot of wages and taxes has been lost because of tech firms classifying workers as contract.  When I do contract, I am in control of my time and actions.  May firms have been sued because contract workers are required to be at work, and are supervised, exactly like regular employees.  They are often paid the same, which means they are paid less due to being responsible for FICA.  I think there have been suits in California and New York.

    Likewise tech forms are importing workers en masse.  This is often done through consulting and contracting companies.  Not only is there no indication that these workers are being paid prevailing wages, many of these workers are, in effect, indentured servants as the sponsoring companies control their.  These workers are not like US workers who can leave and find other work if they are abused.  They would many times have to leave the country.

  •  A source used for the coverage (3+ / 0-)
    Recommended by:
    JerryNA, trumpeter, Oh Mary Oh
    Build a Better Texas: Construction Working Conditions in the Lone Star State is the result of over a year of research conducted by a team of researchers from Workers Defense Project and faculty from the University of Texas at Austin, the University of Texas School of Public Health in Houston, and the University of Illinois at Chicago. Build a Better Texas examines working conditions in the Texas construction industry, incorporating rich data from 1,194 surveys conducted with workers and 35 in-depth interviews with workers, subcontractors, general contractors, and developers. This study is the most in-depth study ever completed on the construction industry in the United States.

    "No one life is more important than another. No one voice is more valid than another. Each life is a treasure. Each voice deserves to be heard." Patriot Daily News Clearinghouse & Onomastic

    by Catte Nappe on Thu Apr 11, 2013 at 09:03:31 AM PDT

  •  You've Completely Missed The Really Good Part (5+ / 0-)
    Recommended by:
    FG, JerryNA, trumpeter, DRo, Oh Mary Oh

    Instead, you pretend the undocumented Hispanic worker you've just paid in cash is going to pay all those state and federal taxes out of his $8 an hour himself.

    Independent Contractors

    An independent contractor is not considered an employee for Form I-9 purposes and does not need to complete Form I-9. An independent contractor includes individuals or entities who carry on independent business, contract to do a piece of work according to their own means and methods, and are subject to control only as to results.

    So both the employer and the employee get to pretend that the employee is in the country legally with no questions asked.

    The subject of immigration in general and illegal immigration in particular is full of pretense.

    I won't be coming home tonight, my generation will put it right - Genesis 9:3

    by superscalar on Thu Apr 11, 2013 at 09:34:17 AM PDT

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