“This is what happens when you have real employees”

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The following is the third in a series of excerpts from my latest book, Deconstructed: An Insider’s View of Illegal Immigration and the Building Trades, which will be published in September 2020.

©2020 Loren C. Steffy

Cars and trucks—mostly pickups—flow into the field behind the Knights of Columbus Hall in north Houston. The hall is old, but the event is older. For more than eighty years, the Marek Family of Companies—which started business in 1938 as Marek Brothers

Sheetrock—has hosted a Christmas party for employees. Started by the grandsons of Czech immigrants, the company today is the largest specialty drywall and interiors installer in the southwestern U.S.

In the final weeks of 2019, more than a thousand current and former employees lined up for a barbecue lunch followed by an awards ceremony that recognized long-time workers. More than three hundred of them have worked there for at least twenty years, and some for more than fifty.

As we walk across the field toward the hall, Stan Marek, the company’s chief executive [image error]and the son of one of its founders, sweeps his hand across the sea of vehicles. “Look at how many of these trucks are new,” he says. “This is what happens when you have real employees. They can afford to buy things like trucks and houses.”

By “real” employees he means full-time hires on his payroll, not workers who are mischaracterized as independent contractors and doing piecework for anyone who needs them that day. The distinction is significant in the construction business. In the past twenty years, the industry has emerged as a flashpoint in the debate over immigration. These misclassified workers and the companies that hire them have upended decades of economic convention. Unlike Marek, many employers rely on undocumented immigrants because they are so easy to misclassify—and thus to marginalize. Their bosses see them as largely disposable, or at least interchangeable, paying them in cash, and providing no safety training, health benefits, or additional money for overtime.

This keeps costs down but does little to build a skilled and reliable workforce, encourage loyalty, or provide financial security for the workers—or the companies themselves.

Stan has long believed construction companies’ reliance on this system hurts workers and the industry. He suggested that I write this book to show how the impact of illegal immigration has eroded wages and degraded working conditions and quality in the industry. He also wanted a platform to illustrate his proposed “ID and Tax” solution. But it’s outside the Knights of Columbus hall on an overcast December day that the point of everything Stan has worked tirelessly for hits home in the most basic way.

Employees who get a regular paycheck can verify their employment to a bank. That means they can apply for financing to buy a new truck. “Off-the-books” contractors working for cash must settle for whatever vehicle they can afford for the money they have in their pocket. Unknowingly, they underpin and perpetuate a shadow economy from which they have little chance to escape.

Stan talks a lot about the need for workers to be brought out of the shadows. The effort would require that they pay taxes on their income and, in turn, that their employers fund payroll taxes and workers’ compensation insurance, as Marek does. The money that Stan pays employees begins a ripple that fans out across the economy. His workers have a verifiable source of regular income.

This lets them finance a truck, sign a satellite TV contract, buy a house, or put in a pool. In other words, they participate fully in the economy.

In contrast, the estimated eleven million illegal immigrants who live in the United States work for cash in the shadow economy. They may buy groceries and electronics. Some may even manage to purchase homes. But their participation in mainstream economic activities is limited. They don’t get the rewards of a steady paycheck or a retirement plan. At the same time, they extract a higher price on society in unanticipated ways. Rather than scheduling regular doctor visits, they may choose the emergency room for routine ailments—the most expensive form of medical care.

Ultimately, local taxpayers foot the bill. In this case and in myriad other instances, the economy—and thus the country—doesn’t receive the full benefit that it does from employees who work on the books, pay taxes, and contribute to the funding of their medical and other expenses. In Texas, about 24 percent of all construction workers are undocumented, the result of decades of immigration laws out of step with economic reality.

Illegal immigration stems from complex economic, legal, and political factors that many Americans don’t understand. They’ve had little reason to delve into the intricacies or the origins. Most native-born citizens know only the romantic tales of ancestors, fighting in the Revolution or coming through Ellis Island, searching for a better life, and enduring perilous journeys and hard work before achieving financial stability and the American Dream.

Immigrants have long been the source of America’s economic strength. Yet our immigration laws have always been ill-defined and arbitrary, based largely on the fears of the moment and aimed at limiting particular groups of people. These fears—and the sources of them—have ebbed and flowed over the decades.

Today anxiety over immigration is omnipresent and it means that the United States has evolved from a country open to almost anyone to a country that few can come to legally. In fact, our borders can be closed to new arrivals with the stroke of a president’s pen. As the coronavirus pandemic of 2020 engulfed the nation, President Donald Trump reacted by suspending almost all legal immigration to the United States, at least temporarily.

Stan is trying to bring a rational approach to a debate that has consistently shown little appetite for rationality.

The federal government has contributed to the confusion surrounding illegal immigration. Officials have enforced existing immigration laws poorly and inconsistently. This is partly because the government doesn’t have the money or the resources to deport all eleven million illegal immigrants, as President George W. Bush noted in 2007.

Even with more recent attempts to step up deportations—and with the feds’ growing reliance on local law enforcement to assist and help pay for the initial arrests and detentions of undocumented immigrants—the government is doing little to reduce the number of undocumented people already in the country.

Some immigration foes argue that the cost and feasibility of mass deportations don’t matter. They say that “illegal is illegal,” and every undocumented immigrant should be rounded up and sent back to his or her country of origin. They seem to think their ancestors arrived “the right way,” and today’s undocumented immigrants are coming “the wrong way.” In fact, immigrants at Ellis Island shared more in common with the Latinos showing up at the southern border than they do with those who receive visas.

No one came to Ellis Island with permission. What changed was not the attraction of America for immigrants or the circumstances of their arrival, but the policies enacted by those who were already here.

Calls for mass deportations of illegal immigrants ignore economic reality. Beyond the prohibitive costs of processing so many people, removing millions of workers from the economy could stifle productivity and trigger a recession.

In the wake of the COVID-19 pandemic, when much of the U.S. economy was shuttered, the government designated workers in agriculture, food processing, and construction as “essential,” regardless of their immigration status. Others lost their jobs and were left to fend for themselves without the social or economic safety nets provided for legal residents. Yet as the economy recovers, it may once again turn to immigrants—both legal and illegal—for some of the most vital services, just as the country has in the recovery from other disasters.

A rational approach to mending our inconsistent policies requires an economic solution to illegal immigration. Such a change would consider not just the costs of enforcement but also weigh the potential benefits of reform against the price of perpetuating a failing system and a shadow economy.

Focusing on the economics of illegal immigration makes sense because most immigrants who arrive illegally come in pursuit of an economic benefit: a job. Yet our immigration laws have never been based on economics. Nowhere is this more evident than in the Texas construction industry: Here a shortage of labor—legal or undocumented—has left the industry struggling to meet demand.

Native-born applicants are not flooding job sites looking for construction work. Since the late 1990s, Stan and his company have actively recruited from high schools, community colleges, and even prisons, yet their efforts haven’t attracted enough workers. Even today, despite Stan’s efforts, most young Americans prefer jobs less strenuous than construction.

The construction industry in America stands out for its inextricable link to the immigration story. Many companies like Marek were founded by the descendants of immigrants and, from their earliest days, provided jobs for other immigrants. The work was hard, but the pay was good enough for those workers to earn a middle-class living and carve out their piece of the American Dream.

As Stan’s workers ate barbecue at the Christmas lunch, he outlined his latest efforts in fighting for rational immigration reform. Most of those in the hall already knew that Stan met regularly with U.S. congressmen and state lawmakers, that he had funded organizations to change immigration policy, and that he frequently wrote guest newspaper columns advocating reform.

He told them about this book and a companion video series, “The RationalMiddle of Immigration.” He and other local business leaders are supporting the initiative to broaden public understanding of immigration. He said he hopes new knowledge will usher in political and social change.

After the lunch, a longtime Latino employee approached Stan. “Thank you,” he said, “for all you’re doing for us.” I didn’t know if he meant immigrants, Latinos, construction workers, or Marek employees. He could have meant all four.

To pre-order a copy of Deconstructed: An Insider’s View of Illegal Immigration and the Building Trades, click here.