Chris Tomlinson: Cheating Texas construction companies place $1.9 billion burden on taxpayers

Texas companies pay construction workers so little, almost half of them end up relying on safety-net programs costing taxpayers $1.9 billion a year, according to a new study. Low wages, weak state laws and rare federal law enforcement have turned a solidly blue-collar industry into a poverty trap. Voters should ask why nearly half of full-time, skilled laborers rely on food stamps and Medicaid to care for their children. The data also bolsters the wisdom of granting visas to undocumented workers and only then strictly enforcing immigration laws to boost wages.

“The low wages and exploitative practices in the construction industry, both in Texas and nationally, cause profound hardship for workers and their families. It also costs the public,” the University of California professors wrote. “When employers misclassify their workers or pay them under the table, they are defunding and defrauding government programs, including workers’ compensation, Social Security, and Medicare.” Texas has one of the fastest-growing economies in the U.S. The construction boom in San Antonio, Houston and Austin is the envy of any Rust Belt state. One in 12 Texans work in construction, or about 1.2 million people, the Census Bureau reports. The industry contributes $92.3 billion to Texas’s GDP or about 5 percent. Personal income from construction totaled $87.3 billion in 2019. But that income is unfairly distributed. Compared to laborers in other Texas industries, twice as many construction workers rely on Medicaid, the health program for the poor, the Children’s Health Insurance Program, Temporary Aid for Needy Families, the Earned Income Tax Credit, and the Supplemental Nutrition Assistance Program, research by UC Berkeley’s Labor Center found as part of a nationwide study. The most obvious explanation is found in the construction contract bidding process. The lowest bidder typically wins, and managers feel the pressure to squeeze every penny possible out of the workforce. Many bend or skirt rarely-enforced laws to bring in underpaid, undocumented laborers. Stan Marek, CEO of Houston-based Marek construction, has lost many a contract to unscrupulous competitors over the last 50 years, and he’s fought for immigration reform for a decade. He expects construction to expand quickly in 2022, and he’s worried the corruption will only get worse.