Low wages and ICE threats: Inside the shadow economy of Texas construction.
Low wages and ICE threats: Inside the shadow economy of Texas construction.
By Marissa Luck,
Staff Writer Houston Chronicle
July 6, 2025
Access to low-wage workers, who are often foreign-born and sometimes undocumented, remains a critical resource for construction companies responding to steady building demand in Texas.
Nearly 300,000 construction workers were undocumented in Texas in 2022, almost a quarter of the state's construction workforce statewide, according to the most recent data available from the American Immigration Council, an immigrant advocacy nonprofit.
Many construction companies use E-Verify, a free online federal system that allows employers to check whether someone is legally authorized to work in the U.S., but compliance can be inconsistent across the large, diverse sector.
“Construction is just such a fissured industry. A homebuilder may not have any undocumented construction workers on their payroll, but they’re going to have a contractor, and subcontractors below, there could be five layers,” said Laura Perez-Boston, organizer with Workers Defense in Houston.
This pushes the responsibility of pay, taxes, safety and working conditions down to subcontractors, shielding larger contractors from the responsibilities of using undocumented labor, she argued.
That structure can insulate general contractors from liability while allowing undocumented labor to persist on job sites, advocates say.
It can be a “don’t ask, don’t tell” attitude, said Nik Theodore, professor at the University of Illinois Chicago, who has studied undocumented workforce in Texas. For example, a firm will bid out a specific job, such as installing drywall, choosing the subcontractor who delivers the project at the lowest price. With many material costs relatively fixed, subcontractors can compete on price by keeping labor costs down, which often hinges on using low-wage immigrant labor, he said.
“For those firms that are trying to take that bid, they'll do whatever they can to hold down those labor costs. And if they can employ undocumented immigrants, they'll do so,” said Theodore.
Regardless of their legal status, immigrant construction workers’ salaries often fall under the living wage needed to afford basic necessities, according to a 2024 survey by the University of Illinois Chicago and the Workers Defense Project in Texas.
Researchers surveyed 353 construction workers at commercial and residential job sites across the state. About 51% surveyed were undocumented, 10% had visas and 10% had status as permanent residents and the remaining 29% were naturalized citizens or born in the. U.S.
The survey found that the median hourly wage was $20 for skilled tradespeople and $19 for laborers and helpers. That is slightly below the $21.83 median hourly wage advertised across online postings for local construction jobs in 2025, according to the data from Workforce Solutions Gulf Coast Workforce Board.
Although the minimum wage in Texas is $7.25 an hour, Houston’s living wage for a single adult with no children in 2025 is estimated to be $22.18, according to Massachusetts Institute of Technology's Living Wage Calculator.
However, wages are often lower for day laborers, or jornaleros, who frequently stand outside Home Depot, gas stations or intersections waiting for temporary work. The large, informal pool of construction workers are mostly undocumented. Many are paid in cash, off the books, Theodore said.
Theodore also participated in a survey of day laborers in Houston after Hurricane Harvey. Researchers found that jornaleros were making a median hourly wage of $12.50 in 2017, or about $16.28 in today’s dollars. Advocates say wages can be even lower.
“One of the things that struck me in doing that (study) is that you had day laborers who were undocumented, but they had lived in Houston 10, 20, 30 years,” Theodore said. “These were really established folks. Their wages were terribly low.”
Additionally, 18% of workers surveyed by Workers Defense and University of Illinois in 2024 were misclassified as independent contractors, rather than employees, receiving 1099 tax forms. The arrangement allows employers to avoid paying benefits and employment taxes, Theodore said.
Another risk for those paid under the table is wage theft, with 25% of respondents in the 2024 survey reporting they weren’t paid for overtime, Theodore noted.
Some employers are reportedly taking advantage of the political climate to undercut wages further, or avoid paying at all, said Iris Canizales and Letty Ortega, organizers at the Houston immigrant rights group Crecen.Canizales said a framing contractor recently told her his rates have dropped 37% in the past several months.
Day laborers tell Crecen that some contractors who underpay them are “taunting and threatening them, ‘Like, what are you going to do? I will call ICE on you,’” said Ortega. Many workers are too afraid to report wage theft because of their legal status, she said.
Theodore said he’s heard similar reports not just in Texas, but across the country.
“Unscrupulous employers that want to use a worker's immigration status against them, those threats have increased in force today,” he said.
Robert Dietz, chief economist at the industry trade group National Home Builders Association said failing to pay workers is illegal, even if the worker is undocumented, but he also expressed skepticism that it was a widespread practice.
Leaders from construction industry groups have argued that expanding legal pathways for immigrants to obtain work authorization is key to protecting employers from legal liabilities and protecting workers from exploitation.
“We have long maintained that nobody benefits from having a large pool of undocumented workers in this country because it is too easy for irresponsible employers to take advantage of their status and undermine and underbid responsible contractors,” said Brian Turmail, vice president of Associated General Contractors of America, an industry trade group.
Geoffrey Tahuahua, president of the Associated Builders and Contractors of Texas, a trade association, said his group "opposes violence and coercion and intimidation of any kind."
"We’re really pushing for a bipartisan solution to the immigration problem, where it provides people with a legal path to get visas, especially if they're coming already with skills," Tahuahua added.
Meanwhile, advocates with Workers Defense Project have collaborated with Texas construction workers to create a list of recommendations, known as Better Builder Standards, for improved working conditions, including living wages, OSHA safety training and workers’ compensation coverage, said Perez-Boston of Workers Defense in Houston. Harris County has adopted some of these recommendations for publicly funded projects, but not all, she said.
By Marissa Luck,
Staff Writer Houston Chronicle
July 6, 2025
Access to low-wage workers, who are often foreign-born and sometimes undocumented, remains a critical resource for construction companies responding to steady building demand in Texas.
Nearly 300,000 construction workers were undocumented in Texas in 2022, almost a quarter of the state's construction workforce statewide, according to the most recent data available from the American Immigration Council, an immigrant advocacy nonprofit.
Many construction companies use E-Verify, a free online federal system that allows employers to check whether someone is legally authorized to work in the U.S., but compliance can be inconsistent across the large, diverse sector.
“Construction is just such a fissured industry. A homebuilder may not have any undocumented construction workers on their payroll, but they’re going to have a contractor, and subcontractors below, there could be five layers,” said Laura Perez-Boston, organizer with Workers Defense in Houston.
This pushes the responsibility of pay, taxes, safety and working conditions down to subcontractors, shielding larger contractors from the responsibilities of using undocumented labor, she argued.
That structure can insulate general contractors from liability while allowing undocumented labor to persist on job sites, advocates say.
It can be a “don’t ask, don’t tell” attitude, said Nik Theodore, professor at the University of Illinois Chicago, who has studied undocumented workforce in Texas. For example, a firm will bid out a specific job, such as installing drywall, choosing the subcontractor who delivers the project at the lowest price. With many material costs relatively fixed, subcontractors can compete on price by keeping labor costs down, which often hinges on using low-wage immigrant labor, he said.
“For those firms that are trying to take that bid, they'll do whatever they can to hold down those labor costs. And if they can employ undocumented immigrants, they'll do so,” said Theodore.
Regardless of their legal status, immigrant construction workers’ salaries often fall under the living wage needed to afford basic necessities, according to a 2024 survey by the University of Illinois Chicago and the Workers Defense Project in Texas.
Researchers surveyed 353 construction workers at commercial and residential job sites across the state. About 51% surveyed were undocumented, 10% had visas and 10% had status as permanent residents and the remaining 29% were naturalized citizens or born in the. U.S.
The survey found that the median hourly wage was $20 for skilled tradespeople and $19 for laborers and helpers. That is slightly below the $21.83 median hourly wage advertised across online postings for local construction jobs in 2025, according to the data from Workforce Solutions Gulf Coast Workforce Board.
Although the minimum wage in Texas is $7.25 an hour, Houston’s living wage for a single adult with no children in 2025 is estimated to be $22.18, according to Massachusetts Institute of Technology's Living Wage Calculator.
However, wages are often lower for day laborers, or jornaleros, who frequently stand outside Home Depot, gas stations or intersections waiting for temporary work. The large, informal pool of construction workers are mostly undocumented. Many are paid in cash, off the books, Theodore said.
Theodore also participated in a survey of day laborers in Houston after Hurricane Harvey. Researchers found that jornaleros were making a median hourly wage of $12.50 in 2017, or about $16.28 in today’s dollars. Advocates say wages can be even lower.
“One of the things that struck me in doing that (study) is that you had day laborers who were undocumented, but they had lived in Houston 10, 20, 30 years,” Theodore said. “These were really established folks. Their wages were terribly low.”
Additionally, 18% of workers surveyed by Workers Defense and University of Illinois in 2024 were misclassified as independent contractors, rather than employees, receiving 1099 tax forms. The arrangement allows employers to avoid paying benefits and employment taxes, Theodore said.
Another risk for those paid under the table is wage theft, with 25% of respondents in the 2024 survey reporting they weren’t paid for overtime, Theodore noted.
Some employers are reportedly taking advantage of the political climate to undercut wages further, or avoid paying at all, said Iris Canizales and Letty Ortega, organizers at the Houston immigrant rights group Crecen.Canizales said a framing contractor recently told her his rates have dropped 37% in the past several months.
Day laborers tell Crecen that some contractors who underpay them are “taunting and threatening them, ‘Like, what are you going to do? I will call ICE on you,’” said Ortega. Many workers are too afraid to report wage theft because of their legal status, she said.
Theodore said he’s heard similar reports not just in Texas, but across the country.
“Unscrupulous employers that want to use a worker's immigration status against them, those threats have increased in force today,” he said.
Robert Dietz, chief economist at the industry trade group National Home Builders Association said failing to pay workers is illegal, even if the worker is undocumented, but he also expressed skepticism that it was a widespread practice.
Leaders from construction industry groups have argued that expanding legal pathways for immigrants to obtain work authorization is key to protecting employers from legal liabilities and protecting workers from exploitation.
“We have long maintained that nobody benefits from having a large pool of undocumented workers in this country because it is too easy for irresponsible employers to take advantage of their status and undermine and underbid responsible contractors,” said Brian Turmail, vice president of Associated General Contractors of America, an industry trade group.
Geoffrey Tahuahua, president of the Associated Builders and Contractors of Texas, a trade association, said his group "opposes violence and coercion and intimidation of any kind."
"We’re really pushing for a bipartisan solution to the immigration problem, where it provides people with a legal path to get visas, especially if they're coming already with skills," Tahuahua added.
Meanwhile, advocates with Workers Defense Project have collaborated with Texas construction workers to create a list of recommendations, known as Better Builder Standards, for improved working conditions, including living wages, OSHA safety training and workers’ compensation coverage, said Perez-Boston of Workers Defense in Houston. Harris County has adopted some of these recommendations for publicly funded projects, but not all, she said.
