LANGLEY PARK, Md. — Each weekday morning, contractors in need of day laborers to paint, mulch or hammer pull their trucks into a small strip mall here and begin negotiating with job seekers. It takes just a few minutes for the price of human labor to decline — often below the state’s minimum wage — as men desperate for work underbid each other.
On a recent weekday, eight trucks pulled in over a two-hour period and separately negotiated with about 10 workers at a time. The bidding started at $12 an hour. But because there were more laborers than employers, the price frequently fell to as little as $5 per hour, significantly lower than the state’s mandated $8.75 minimum hourly wage and Prince George’s County’s minimum wage of $10.75 an hour. Although several workers cut deals at that low rate, Jose, a construction worker who moved to the U.S. from Guatemala 21 years ago, held out for higher pay — a decision that cost him a job at the time.
Even though Jose sometimes works for less than the $16 an hour he thinks he should be earning, he won’t bid himself down as low as the other workers. Day laborers make so little, he said, that they “have to work sometimes day and sometimes day and nights.” (Capital News Service is withholding the last names of day workers to protect them from possible retaliatory actions from employers.)
Scenes such as this have become a common part of the American informal job market and are especially prevalent in heavily immigrant areas such as Langley Park, a small community in Prince George’s County that is home to many families that have come to the U.S. from El Salvador, Guatemala, Honduras and other countries in Central America and Africa.
Immigrant day workers say these informal markets serve a good purpose by allowing them to find work easily and without signing paperwork or governmental oversight. But worker advocates argue that these markets actually work against the long-term interest of immigrants by pulling wages down so low that families struggle to break out of poverty. The average annual income for day laborers in Langley Park, many of whom are in the U.S. illegally, is between $10,000 and $15,000, according to CASA de Maryland, the largest Latino and immigrant advocacy organization in the Washington, D.C. area.
Moreover, some economists believe these trends have trickled down to the broader job market and could partly explain why wages for some low-skilled workers — both native-born and immigrants — have remained stuck at the same level for decades and in some cases have fallen.
“The theory says that increased supply [of workers] should lower wages,” said Nicholas Montgomery, a labor economist at the University of Maryland. Montgomery said that while native-born Americans might frown at the idea of working for less than minimum wage, many immigrants calculate their earnings differently. “I do believe these workers are thinking, ‘What is the way that I can make the most amount of money?’ And that’s not necessarily holding out for a higher wage. And I would rather bid myself down to $8 an hour, and have an 80 percent chance of getting a job, than having a 10 percent chance at $15 an hour.”
Between March 2006 and March 2016, average weekly wages adjusted for inflation for all U.S. production workers rose 8.2 percent to $309.68, according to data from the Bureau of Labor Statistics. That category includes workers in construction, manufacturing and service jobs and those who are not primarily employed to supervise others. But average weekly wages for workers in some industries haven’t kept pace and in some cases have declined.
For example, average weekly wages for workers in the janitorial services industry declined 1.8 percent from March 2006 to March 2016 to $144.56; wages for employees in the house painting industry declined 3.3 percent to $307.46 and average wages for workers in the house and office furniture moving industry were down 11.5 percent to $235.76. Average weekly wages for workers in landscaping services rose 6.2 percent, but remained relatively low at just $252.85 in March 2016.
“It’s been tough” to convince workers not to underbid their labor, said Delia Aguilar, the senior manager of workforce development for CASA de Maryland. She said that workers believe that jobs are more plentiful in the informal markets, “but that doesn’t mean that they’re getting fair payment.”
Since 1985, CASA has tried to push back against falling wages by establishing so-called “welcome” centers where employers and potential employees can meet and CASA mediators will help negotiate wages and working conditions. CASA’s welcome center in Langley Park opened in 2008 and handles between 20 and 40 workers daily.
CASA sets a wage floor of $10 per hour, though Aguilar said employers often pay at least $12 an hour. Higher-skilled workers earn between $15 and $20 per hour, a sharp increase from the federal minimum wage of $7.25 and Maryland’s $8.75 hourly minimum wage. The state’s hourly wage is set to increase to $9.25 in July.
In return for paying higher wages, contractors that hire via CASA take on workers who have received job and safety training. CASA offers classes on building maintenance, drywall, heating and cooling and other occupational skills, and instructs workers on professional dress and behavior.
Still, some employers “are going to try to save money, and they see it as a business opportunity to do that,” Aguilar said of contractors who hire non-CASA workers for cheaper wages. “Some employers are conscious, they understand, what we have over here is a little bit different. They pay a little bit more, but they understand that the process is more viable.”
CASA operates with a first-in, first-out system: When workers arrive, as early as 6 a.m., they sign in and wait for the first employer to show up with work. The second worker to arrive then moves up a slot, and so on, with the rotation carrying over to the next day. When employers pick up laborers, they sign documentation agreeing to what CASA’s staff refers to as a “living wage.” If employers don’t pay, CASA’s legal services team comes knocking.
Felix, an immigrant from Cameroon in Central Africa, appreciates CASA’s tactics. “CASA is looking out for everybody, not for a particular person,” said Felix, who has been finding jobs through the welcome center for the past three years. He said he rarely participates in the informal markets because he isn’t willing to work for less than $10 per hour and he doesn’t like the way workers undermine each other. “Everybody up there is everybody for themselves.”
At least as many workers choose to look for work outside of CASA, though. For those laborers, it’s better to work for less pay than to not work at all, a risk with CASA’s one-in one-out system. With no way to collectively enforce CASA’s higher pay, wages end up dropping for all workers, according to Montgomery.
“There’s only going to be so many people who are willing to hire people at $15 an hour,” Montgomery said. “And however many people that is, it is fewer than the number of people who are willing to hire people for $10 an hour. If you underbid, that increases your probability of getting a job.”
Workers who operate outside of CASA underbid themselves because they think in terms of accrued wages, not hourly, Montgomery and Aguilar agree. Although CASA workers earn more hourly, the probability of not getting work in a given day is higher. Non-CASA laborers, conversely, might work more often but make less money hourly.
CASA encourages employers to request workers through an online form and telephone calls so they don’t have to physically go to center and be “harassed” by outside workers, Aguilar said. Langley Park is the only of CASA’s five welcome centers with this issue because it is located in a strip mall’s basement. It is easy for outside workers to intercept employers on their way to CASA, offering to work for less than those waiting downstairs, she said.
“We understand at the same time, [non-CASA laborers] are in need,” Aguilar said. “They’re trying to do as much as they can to be able to make that money that they need to support their families. At the same time, they are changing the environment in the area.”