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The Economics of Labor Exploitation

We always, always hire the undocumented workers. It’s not just me, it’s everybody in the industry… First, they are willing to do the work. Second, they are willing to learn. Third, they are not paid as well. It’s an economic decision. It’s less expensive to hire an undocumented person.

This striking quote from an anonymous Manhattan restaurant owner illustrates the vulnerable position undocumented immigrants occupy in our labor market. The restaurateur admits to paying undocumented workers less than their due—though he insisted, of course, that this was at least minimum wage. But because these workers are easily threatened with deportation, they are demonstrably less likely to speak out if they are denied minimum wages, meal breaks or safety equipment. And New York City’s restaurant industry is only one breeding ground for such violations. A groundbreaking multi-city report revealed just how these practices pervade occupations and industries throughout the low-wage labor market.

Immigration and Customs Enforcement is one of the agencies tasked to punish employers who break the law in hiring and abusing undocumented workers. And since last year, ICE has publicly shifted its focus from high-profile raids and mass arrests of these workers to behind-the-scenes criminal investigations of employers that rely on and exploit their labor. According to statistics from the agency, it has investigated over 2,070 businesses as of July 31, far more than the 1,500 conducted in 2009.

One such investigation culminated in charges against a Miami construction firm accused of hiring and underpaying undocumented workers to “increase their profit margin.” ICE special agents alleged that the company withheld standard and overtime wages from workers and failed to pay required social security or employment taxes. What some employers claim is a simple “economic decision” to cut corners is also known as wage theft. ICE’s investigation also found that the construction company’s abuse wasn’t limited to undocumented workers—legal immigrants and U.S. citizens were also routinely cheated out of their wages. When employers take advantage of undocumented immigrants, this degrades the labor standards that every worker relies on.

It is encouraging that ICE has been stepping up worksite investigations of unscrupulous employers who ignore employment and labor laws. But this isn’t enough. No federal agency can completely crack down on the abuses that correspond with 7.8 million undocumented immigrants in the labor force. Only comprehensive immigration reform can legalize these workers and help prevent the workplace exploitation that hurts so many others.

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Posted at 12:16 PM, Sep 10, 2010 in Immigration
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