What Price Labor?

Business as Usual

Although this story may seem more the exception than the rule, it illustrates a problem that workers and union leaders say happens virtually every day in the construction business. In this line of work, they say, fly-by-night schemes are common and cheating is seldom discouraged by laws riddled with loopholes big enough to drive a bulldozer through. When that happens, the migrant worker is left empty-handed."These guys are gouged constantly," says Richard Troxell, founder of Legal Aid for the Homeless, which offers legal assistance to workers at the day labor site at the corner of Second and Guadalupe. "There's a perception that these folks are expendable, that one hour of their work is worth less than one hour of someone else's work." But, Troxell says, the temporary laborers he works with are "ever optimistic" about getting paid the wages they are owed. "They say, 'I got screwed here -- maybe I won't get screwed the next time.'"

When VCI skipped town, in fact, only one of the workers stuck around to seek redress against the company with the Texas Workforce Commission; the rest of the crew went home to the Valley in defeat.John Hitzfelder, an organizer with the Industrial Workers of the World, Local 520 in Austin, says this particular incident is "testimony to how often this happens."

Meanwhile, the IWW and the Texas AFL-CIO filed a wage lien against VCI on behalf of the 20 workers. Since the company did not have a bond insuring the subcontractor's work, the money will come out of VCI's contract with Williams. Texas law has no provision requiring contractors to secure a bond before hiring subcontractors, nor does it require general contractors to pay the wages of workers if a subcontractor goes bankrupt or flees the scene, a fact which the AFL-CIO's Harrington decries.

Luckily for the workers, however, HEB included a provision in its contract that held Williams Construction responsible for paying the wages in the event the subcontractor renegged on his end of the deal. Still, according to the Texas Labor Code, failing to pay wages is not considered a crime unless workers can prove either that the employer intended not to do so when the workers were hired, or that the company continued to employ the workers without the intention of paying their wages. (Currently, no criminal penalties are being sought against VCI.) Besides that, the lengthy appeals procedure, which can drag on for several months, is a cumbersome process, according to Paul Sherr, a former TWC employee who dealt with wage claims at the commission.

Paul Sherr, a former Texas Workforce Commission employee who now publishes “The Working Stiff News” and runs “Working Stiff” radio program on
KOOP radio

photograph by Jana Birchum

"Personally, I would like to see the appeals judges be a lot more tough-minded. ... The word is out that you can abuse the system and get away with it," Sherr said. And while TWC procedures allow workers to file a lien to win back wages when they are due, many workers, especially transients, are unaware that any protection exists, says Steve Morelock, who works in TWC's Labor Law division. "These people will skip on them ... and they just get beat out of their money," Morelock says. "They don't know who to turn to." While the Texas Employment Commission used to make public service announcements on Spanish and English-language radio several years ago, before TEC was absorbed under the larger umbrella agency of TWC, Morelock says budget cutbacks and staff reductions have substantially hindered the agency's outreach efforts. "We do go out and talk to employers, but that doesn't help the people who are making minimum wage," he says. "One problem at this agency is we're losing the personal contact we once had and so we can't promote people filing claims. ... It's the people who need the help most that aren't getting helped."

Another trick often employed by fly-by-nights is reincorporation, or reorganizing a business under a different name. Sherr recalls a lawn-mowing outfit in Houston "that would reincorporate every year under a different name, and would take off at the end of every summer," leaving workers in the lurch. The TWC, he says, could never "get beyond the corporate veil. ... There was nothing we could do about it because they were incorporated." Williams Construction controller Lee Williams, who says this happens in Texas "more often than you know," blames an oversight in state law which states that the owner of a corporation cannot be held personally liable for his company's actions. "The only losers are everyone else that's involved; that guy [the owner] keeps on going," she says. "If you were a Midwestern company you'd no more see someone doing that than a man in the moon."

Joe Perez, a crew leader at the Metropolis Apartments building site, where 125 workers were denied their wages after the subcontractor who hired them died (see story, p.28), says that contractors who fail to pay their workers are criminals and should be treated as such. "It's considered theft if you walk into a 7-Eleven and walk out with a cup of coffee. You will get arrested, go to jail, have to post bond, go to court, and probably have to pay a fine, and all of that is really expensive," he says. "But if you go and enslave 200 to 300 people and don't pay them, it's not a crime."

Even when a lien is filed against a contractor's bond or the property on which they were working, workers must wait at least a month, under the Workforce Commission's procedures, before they will see their pay. For people living literally from paycheck to paycheck, a month waiting for wages may mean a month in which bills go unpaid and necessities go unmet. "If the subcontractor gets paid and then skips town, you're stuck without a paycheck," says Perez. "And if you're labor, you're dependent on working every week and getting a check."

Who's Responsible?

In the case of the HEB project, union leaders said they had initially considered seeking wages from HEB, the company that, in Harrington's words, "is benefiting from that work." But HEB public affairs manager Kate Brown is quick to point out that nothing requires the company commissioning construction work to pay for workers hired by a company twice removed from its direct control. "The general contractors are on their own," in checking out the reputation of companies they contract with, Brown says. "They're responsible for paying the contractors ... that's why we hire them."

It's exactly this sort of attitude that enrages union leaders, who say companies should take responsibility for the wages of workers who build their facilities. "HEB is going to enjoy the fruits of those workers' labor," says Michael Murphy, an organizer for the International Brotherhood of Electrical Workers (IBEW), who called the grocery chain's general contractor on behalf of VCI's stranded workers. "HEB may claim that they're not responsible; Williams is, and Williams will say that they're not responsible, VCI is, but shoppers are going to pick groceries off shelves that were put there by those workers, so they [HEB] are ultimately responsible."

Another problem, organizers say, is that both companies and general contractors tend to seek the lowest bidder when choosing companies to do their construction work, sometimes disregarding criteria like reputation and the contractor's ability to do the work on budget. This leads, according to Harrington, to depressed wages and poor working conditions for employees, whose pay is often the only variable that can be negotiated by employers. "When you underbid, you frankly are not looking out for your employees. Instead of saying, 'We'll underbid and pay less on the material,' they cut costs on the workers," Harrington says. "I'm sure there are some standards on material, but there aren't any standards on workers."

HEB will not vouch for any contractor the company hires, but Brown, the public affairs manager, says the bidding process includes extensive background checks on a contractor's reputation, personnel, and finances. "Price is certainly a part of [the bidding process], but other things are also involved," says Brown. "We do everything we can to choose contractors to do business the same way we do business."

Although union leaders and workers' advocates are quick to provide anecdotal stories and testimony about how commonly workers are cheated out of their wages, a reliable record of how often this occurs is harder to come by. Since TWC records only contain those incidents in which workers have filed a claim against their employer or sought payment from a contractor's bond, the most reliable source is unions -- and, as union leaders are quick to attest, they aren't keeping records. "We have a hell of a time just keeping up with our own people," says Ralph Merriweather, an organizer with the IBEW. "You just have to listen because you can't keep track of them all."

Moreover, as an extremely mobile labor force, migrant construction workers face stiff challenges in joining traditional unions, which often require long-term residency in an area before workers may be considered for membership. Migrant workers, says Merriweather, are "never in one place; they're going to go where the work is at. The people you do unionize are people who are stable, who have homes in the area. ... What good is getting these guys in Austin if they're going to take off tomorrow?" The IBEW's Murphy also acknowledges that the union's one-year residency requirement is a barrier, but says the group is working with other Austin-area organizations, particularly Austin Interfaith, to help workers into higher-paying jobs without the benefit of a union structure. Unions which have reached out to migrant workers have encountered another problem in mobilizing this largely transient workforce: Their very mobility makes them virtually inaccessible.

After working 10-hour days for six days out of the week, says Harrington, who worked with the United Farmworkers union for more than 20 years, migrant workers often go home on Sundays; most have few ties to the cities they work in, forsaking bars, churches, and community groups in the area. The IWW's Hitzfelder says that unions can often help migrant workers who have been denied wages, "but we have to find them first. That's the problem: How do you find them?"

Often, the only place unions can connect with migrant workers is at the sites where they are working. But even there, says Harrington, a strong fear and skepticism about unionization makes workers wary of talking seriously with union organizers. "They're afraid because if they talk union or talk about wages or anything they're going to get fired tomorrow. That is a shame," says Harrington. Workers, she says, "should be putting this on the heads of employers" instead of allowing their employers to make them afraid. "They're working against their own best interests." A further problem in securing wage equity, says Legal Aid for the Homeless' Troxell, is the disparity of prevailing wage levels in the workers' towns of origin. "These dollars relate back to their personal situation," Troxell says. "It's hard to get unanimity between workers about what they're willing to work for when that depends on their personal context."

A disorganized, fragmented workforce like that of migrant construction laborers means that stories like that of the VCI workers, who will have their money within a month thanks to the fortuitous provision in the construction contract, will remain the exception rather than the rule. Unlike in Southern California, where drywallers led a successful organizing drive in 1992, few migrants in Texas are unionized, owing partly to stringent union requirements and partly to a language barrier that can at times seem like an impenetrable wall. For now, workers like Joe Perez are hoping for "some form of union organization that will deal specifically with problems like this. ... If you're not unionized, you have no protection at all. You're at the mercy of everybody."

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Heb, Construction, Migrant Worker, Rebecca Harrington, Afl-cio, Texas Workforce Commission, Union

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