Breitbart Business Digest: The Homebuilders Say Legal Workers Are Hiding from ICE

A Very Convenient Just-So Story About Construction Workers What if someone told you that child labor laws discouraged shorter people from working? The first national child-labor law, the Keating–Owen Child Labor Act, was signed by President Woodrow Wilson on September 1, 1916. It prohibited interstate shipment of goods from factories employing children under 14, mines employing children under 16, and establishments imposing excessive hours or night work on children under 16. It was struck down by the Supreme Court a couple of years later, and it wouldn’t be until the New Deal that we got a lasting national prohibition on child labor—although many states had restrictions before that. Imagine, for a moment, that someone claimed that laws against child labor were hurting businesses not because those businesses used a lot of child labor but because short people had stopped showing up to work for fear of being swept up in an anti-child labor law dragnet. Of course, it should work the other way around. The exclusion of children from the workforce would potentially increase the demand for adult labor. And, in particular, it might increase the demand for labor by shorter adults for certain tasks in which diminutive stature was a particular advantage. That should draw more short people into the workforce. At the very least, you would want to see some evidence backing the claim. When people make extraordinary claims that others are acting in unexpected and irrational ways, they should expect to be asked for evidence backing up this claim. Of course, there’s no evidence that short people fled the workforce when child labor laws were put in place. But a similar claim has been making the rounds this year, not about children and short people but about illegal aliens and workers legally entitled to work in the United States. The Homebuilders Say Legal Workers Won’t Show Up “Nationwide, more than one-third of builders reported immigration enforcement activity in their market areas during the past month, causing construction delays and discouraging legal workers from reporting to work,” National Association of Home Builders Chairman Bill Owens, a home builder and remodeler from Worthington, Ohio, said in a statement released Monday. Why would immigration enforcement activity discourage legal workers from reporting to work? The removal of competing illegal workers should raise the demand—and therefore the wages—of those legal workers. They have more incentive to show up to work when immigration enforcement activity occurs. What do the data tell us? If immigration enforcement were discouraging legal workers from showing up to work, we would expect their workforce participation rate and the relevant employment-population ratio to fall. What we find, instead, is that the participation rate for foreign-born men has not changed at all over the past year. The employment-population ratio actually improved a bit, from 74.6 percent in September of last year to 74.9 percent last month. Let’s drill down a bit further and look at the construction sector in particular. Unfortunately, the official data does not differentiate between legal foreign workers and illegal foreign workers. But we can separately identify one group unquestionably entitled to work here: naturalized citizens. Among naturalized men, total employment in the construction sector in the July through September period was down 4.2 percent. That is less than the decline for native born male workers of 4.5 percent. For legal workers to be staying away, illegal workers would have to be filling in for them, in the middle of a crackdown—an absurd proposition. So there is no sign of legal immigrants being chased out of work for fear of being deported. The NAHB’s own October 2 analysis shows that residential construction payrolls fell 4,900 in September. But these do not appear to be workers staying home out of fear of ICE. In that same month, nonresidential construction added approximately 16,100 workers to payrolls. In other words, what appears to be happening is not workers staying home but being competed away from the residential sector to data center construction. The home building firms have a challenge when it comes to complaining about immigration enforcement. They do not want to admit dependence on illegal labor. So if some of their workers are not showing up, they need to tell a tale about the enforcement discouraging legal workers also. What’s more, some of them may genuinely be confused about the legal status of some workers, causing them to think that illegal workers not showing up were actually legal. So that’s why they want to tell this story. But there’s no good reason to believe it. The best evidence we have does not support this tale of legal workers being discouraged.