Are Illegal Labor Wages Rising

[powayseller]

I heard that a city in CA (can’t remember which one) has organized day laborers, so that none of them will work for less than $20/hr. If you pull up in your car to pick up a worker, you have to offer $20/hr, or they refuse to go.

I had someone clean my house recently (against my core values, but just this once), and they were of Mexican descent (illegal?), and they charged me $18/hr for each worker. This is the same pay that my friend says her company pays for a technician with a B.S.

So, do the illegals have clout to raise wages, and how are they able to get raises, when the legally employed are getting less than 2% raises annually? How can a housecleaner get paid the same as a technicians with a bachelors degree?

What is going on with our labor market in California?

[rankandfile]

PS: Are these the same LOW paying jobs that we lazy Americans don’t want? If $18-$20/hour is low-paying, maybe I’m in the wrong field. What really gets me is how illegals are paid so well, yet many continue to get paid under the table and don’t pay taxes or medical bills…oh, and they get preferential treatment when applying for schools and we taxpayers should help pay for it!

What’s down is up and what’s up is down.

[no_such_reality]

An article in the LA Times in May showed the stupidity of the problem. People can’t connect point A to point B. They rail on illegal immigration but then drive to the corner by home depot looking for someone to do day labor work for $5/hr. not noticing that’s the root of the problem.

The article was about a Government Landscaping Contractor. Couldn’t find legal residents to do the jobs at $34/hr. Of course, those required experience. Luckily, since the Government sets the payment rate, entry level, literally, ditch digger, grunt labor, was $18/hr. the problem was, any non-government contract work at competitor companies is $8-9/hr.

Hence, the owner was too dumb to draw the line to the fact that illegal workers drove down the entry level work, hard physical work in the Cali-sun to be on par with what our kids can make in McDonald’s. Hence, no legal residents with experience to fill her $34/hr. crew supervisor job. And no takers on the entry level jobs becuase most look at it, know it’s hard work, and see 90% of the companies paying $8/hr. Here’s the link http://www.latimes.com/search/la-fi-jobs18may18,0,970169.story

As for the workers wanting $20/hr. Well, people don’t have to pay it. Or counter with show me your contractors license, you’re bonded right? But it is a two way street. How much should they make for doing Joe & Jane Suburbia’s physical work of clearing brush, installing pavers, painting etc. ?

[Carlsbadliving]

I find it hard to believe that a City would organize day laborers and require that they earn $20/hr. Vista has set forth some regulations that require anyone who picks up a day laborer have a license to do so (you can get the license for free at the City). A contract must also be signed between the homeowner and the laborer that describes the work to be done, how long it will last and the amount of pay. I don’t think there were any requirements on the pay, just whatever was agreed upon.

In Powayseller’s case, if you hired a company to clean your home and they sent out someone to do it, it’s totally reasonable that it would cost $18/hr. That would be the total cost (worker’s wage, worker’s comp, benefits, company overhead, etc.) The worker would probably take home $8-10/hr

[powayseller]

I’m sorry I didn’t explain this accurately. The $20/hr minimum is organized by the workers.

The cleaning crew was independent workers. They work for themselves. I got their name from a realtor, and I had their business card. It is husband, wife, and daughter. Wow, did they ever do a good job. So I paid $18/hr for EACH of them, making it $54/hr. I was a little embarassed to tell my husband about it, because that is my job to clean the house. But with all the time I spend on piggington, I simply didn’t have the time to do it.

Two stories to show that the illegals are now earning $18/hr or more. I am very very interested what others are seeing. If the illegals are able to get wage increases, then why not the legals, the middle class? How can an illegal earn 3x the minimum wage?

[Carlsbadliving]

The workers themselves can ask for as much money as they want, but they’ll only get paid what the market will pay.
I can tell my boss I won’t work for less than $500,000/yr, but I suspect he’ll pay me a lot less and I’ll take the work because nobody else is knocking down my door to pay me that much.

[PerryChase]

PS, consider that your cleaning crew is not working 8 hours per day. They work comes in peak and valleys so their per hour wage is a lot less. Plus they have expenses for driving to your house, supplies, adverstsing, maybe commissions to real estate agents, etc…

What makes your think that they aren’t paying taxes? Maybe they are paying Social Security taxes at 15% which would make their net earnings a lot less!

Let’s not assume that a Hispanic is necessarily an illegal.

BTW, an illegal is not eligible for medical services under new-laws passed. Even a legal immigrant may not be eligible.
http://www.washingtonpost.com/wp-dyn/content/article/2006/06/29/AR2006062902093.html

Personally, I support the Hispanics because they are harworking people looking for a better life like anyone else. That’s why when doing a transaction, I always choose the Spanish option. When corporations realize that their customers are Spanish speakers, they will lobby for their customers. It took me years to learn Spanish so I might as well practice it.

[powayseller]

Neither reply addresses whether we are seeing an upward shift in illegal/independent contractor/off the books worker wage demands.

I doubt the cleaning people file a W-2. If they did, I would have been given a receipt.

[Carlsbadliving]

I say no. If we’re already seeing layoffs in construction and other real estate related fields then what would be driving up wages? If anything, wages will become more depressed as out of work construction workers try to make ends meet and as everybody else cuts back on purchases and services.

[PerryChase]

What makes you think that there is an increase labor costs?

Independent contractors pay taxes like everyone. They don’t file a W2 but they do pay estimated taxes monthly or quarterly. Plus they pay the full about in Social Security self employment taxes 15%. They also pay workers compensation if they have employees as well as business insurance.

If costs are rising then independent contractors, like any business, have to charge more to cover their expenses. For example if it cost more for your cleaning crew to drive to your house, they have to charge more to cover their travel expenses.

Illegal workers maybe employees or independent contractors. I don’t see how illegals and independent contractors are the same.

Likewise, if you hire a maid (household worker) you need to pay Social Security and insurance. If not, you’re the one violating the law, not the worker. Remember Zoe Baird?

To address the point of escalating costs…. we all know that contructions costs are increasing. So whether you hire a company to do your work or an individual contractor, the escalating cost of doing business is affecting them the same. Somehow, they have to pass on their costs to the consumer.

[PerryChase]

It’s an urban myth that “illegals are paid so well, yet many continue to get paid under the table and don’t pay taxes or medical bills…oh, and they get preferential treatment when applying for schools and we taxpayers should help pay for it!”

Rankandfile, that is simply not true. Illegals are not eligible for welfare and social services. People without insurance actually pay 3 times more for the same service than people with insurance. The problem occurs when they walk and don’t pay but many do pay.

Illegals pay taxes indirect through their spending but get no benefits in return.

[Lickitysplit]

“People without insurance actually pay 3 times more for the same service than people with insurance. The problem occurs when they walk and don’t pay but many do pay.”

Hmm… better fact check. There are two prices in healthcare: cash pay and insurance. Are you talking about the amount billed or out of pocket for the patient? The amount billed is much less for cash pay. Whether or not the provider gets paid is completely different. Hospitals generally do not turn away people in need; they provide the care, the docs write it off, and the hospital tries to make up the costs elsewhere (aka paying patients).

I’d incourage anyone interested in this (illegal immigration in regards to healthcare, welfare, work, etc.) to check out this article. Plenty of good discussion points in this true story.

[PerryChase]

Doctors and hospitals bill about 3 times more to patients who don’t have insurance (private, medicare, etc..) Insurance cos have negotiated lower rates. Sometimes providers get paid, sometimes they don’t. If they don’t get paid, then they have to increase rates to other patients to make up for the loss.

Correct, emergency rooms cannot turn away patients, so people show up there when they are so sick that they cannot take it anymore.

But doctors’ offices do turn away patients all the time. That’s why there’s no preventive care and something that might have been a small matter turns into an emergency costing thousands of dollars at the emergency room (i.e. the tuberculosis case in the article you mentioned).

If we had universal preventive care, it would cost us a lot less in the long run. Diseases would not be left unchecked and spreading from people to people. Remember, human beings interact, cook food, they have sex, etc…

Also, call any pharmacy, if you have insurance you may pay $10 co-pay for a $100 prescription. But if you don’t have insurance you’ll have to pay $300 for the same prescription. Of course, pharmacies don’t have to give medicine to people who can’t pay.

Once a patient is out of the emergency room, if he is uninsured, he can’t get ongoing treatment. Consider a contagious disease for a minute. He’ll be spreading the disease until he needs to to go the emergency room again. Of course, he can’t pay so the cycle continues. In the mean-time, how many people did he infect? He might be cooking your food at the restaurant, or cleaning your hotel room.

Diseases don’t care if a person is a citizen or not. If we have disease amongst us, we are all worse off.

I might also add that most of the 40 million uninsured are citizens, not illegals.

[powayseller]

Perry, please read my opening post. My question was about my own experience and a story I heard, and that’s why I asked if this was just an aberration, or if we have rising wages for illegals.

Second, hiring a cleaning crew just once doesn’t mean I have to pay taxes for them. I believe the rule applies if you pay someone more than a certain amount, or hire them regularly. Does everyone who hires a day laborer fill out a W-2?

Perry, rising costs don’t mean you can pass them along. Often you have to figure out how to lower your profit margins.

I still don’t have the answer to my question, which is: are illegals getting paid more now than they were last year or the year before?

Payroll surveys show that wages are flat, but how are the wages of illegal labor? Is it rising? Come one, how can a cleaning person charge as much as a technicians with a bachelors degree? What is driving that?

[PerryChase]

The IRS rule is that if you pay a contract laborer more than $600 per year, you need to file a 1099. There is an exception for private household but I don’t remember what it is.

My feeling is that wages in the construction and related service (ie cleaning) industries have been rising because of the housing boom. More workers are needed to build and service all those new homes. Those wages will be depressed with the coming crash, but there’ll be a lag time. If everyone is busy, it’ll cost your more if you want the services now…. Remember, there are plenty of homes on which finishing touches need to be applied. When people move and sell they need to have their homes serviced.

I don’t think it’s too much for a cleaning person to charge $18/hour. Remember that cleaning person does not have a full schedule and needs to market himself like a business. A technician might make $18 working at a job full time. But if you want that technician on a private contract to come fix your computer at home, it’ll cost you about $125/hour. If you want him at night, it’ll cost you $200+/hour. You cannot compare an independent contractor to an employee. You have to think about the net income each worker gets. A contractor is like a business with revenue, minus expenses equals net income. If a business is busy, they’ll charge more to fit-in a client to make up for when they charge less when it’s slow.

My brother who is in the service business says that when he’s busy, he charges more when someone wants something immediately… He has different prices: the regular price, the nice-person price, the right-now price, and the pain-in-the-ass price.

[Author]

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