The U.S. Senate recently announced its plan for immigration reform. It includes a path to citizenship and enhanced enforcement against illegal entry and employer cheating, among other attributes. Here’s why you should care.
First, I’m not taking sides. This is not about nationalism, xenophobia, or fear. This is about the effect on our day-to-day management of our various enterprises by upcoming legislation. Political will and political capital are going to be spent on this issue in this administration and we need to pay attention. Despite how tough our economy has been, this country is a shining beacon of opportunity and freedom to most of the world; people die walking in deserts and swimming rivers to change the course of their lives and enter the United States because our system is better than what they face in their home countries.
Everyone in the construction industry — new housing or renovations, general or handyman — can point to competitors in their area who employ a less-than-legal workforce, often avoiding licensure and insurance laws. With our current immigration system, “That Guy” has plenty of workers to choose from and may even pick them up off the street each day. He does not care to know their names. Those workers are not insured by workers' compensation. Those workers likely pay taxes and Social Security (or it is paid on their behalf by the employer when he pays them cash), of which they receive next to nothing in returned benefits. They are living in darkness, and that employer we all point to is making profits on the backs of disadvantaged and downtrodden workers. Here’s how “That Guy’s” world will change under the new plan.
Those living in this country illegally will likely be offered a path to citizenship with some caveats about paying back-taxes or fines. The path may take years, but a legal status will allow them to rent homes in their own name, build credit history, and apply for and work at legal employment. In general, they will be able to expend their energy in upwardly mobile ways and become members of their community if they choose. They will begin to command a real wage, maybe no better than minimum wage, but a real wage that is paid in a paycheck. The costs of “That Guy” will rise as his employees begin to demand better treatment, or, in the case of minimum wage and workers' compensation laws, the government will demand better on their behalf.
These same workers also will be allowed to exercise their right to expend entrepreneurial zest — the same thing that gets you out of bed in the morning — and will start their own companies and take work away from “That Guy.” Often this will be because the work performed by these workers is of the “work Americans don’t want to do” variety. First-generation immigrants to any country have to start somewhere, and it is usually at the bottom.
Immigration reform also will need to address employer verification (or lack thereof) and enforcement in order to be politically sound enough to pass. Employers like “That Guy” will need to provide better records of the workers on their jobsites and will have a harder time faking their way through the paperwork. They will get caught. Penalties for farmers who do this, under our current system, include fines and work stoppage (often resulting in crop failure). “That Guy” will need to shape up or get out of the industry.
Enforcement is the final straw that will break his back. More fencing, more border guards, etc., will reduce the flow of illegal immigrants in the future further affecting the available population of workers who will put up with the shadow-employment that he offers.
I cannot promise you that the current plan will pass. But after the demographic shifts in the voter turnout in 2012, all eyes are on the Hispanic vote and how to keep it (or get it). I suspect something will pass in the next two years, albeit possibly diluted and weak, but some change is coming.
And, let’s be honest: “That Guy” is not the high-price leader in your town. He’s not outselling you on quality. He sells on price and speed. He undermines us all. I gladly welcome immigration reform because if you ranked everyone in my town on price, a pretty large slice is going to come off the bottom of the list within the next few years. —Clint Howes owns Revive Construction, in Portland, Ore.