The past two decades have seen tremendous consolidation at the top tier of residential construction.⁹ According to Ormiston and his colleagues “In 1994, the ten largest homebuilders (by numbers of homes) accounted for 9.2 percent of new homes sold in the United States; in 2017, the ten largest companies were responsible for 27.5 percent.”¹⁰ This concentration at the top does not reflect the actual process of building. According to Walsh and his colleagues, “Most large production homebuilders in the United States have discontinued the practice of self-performing work on their projects, and instead rely upon a network of highly specialized subcontractors organized by trade or activity.”¹¹ Weil and Theodore suggest that this fundamental change in residential construction demonstrates how the major homebuilders have moved away from acting as general contractors and now perform as construction managers.¹²

The subcontractors who actually perform the work for a growing number of very large firms are themselves very small-scale. According to the Bureau of Labor Statistics, 88.4% of the subcontractors “had fewer than ten employees and less that 1 percent had more than fifty workers.”¹³ In this way, residential buildings built by large national homebuilders that dominate the market are actually constructed by a very large number of very small subcontractors who operate in local markets.

Without unions to represent the workers, the pay and working conditions offered by these small subcontractors have significantly deteriorated. “When I started in 2003, if you were building a custom home, you would get about $11 or $12 a square foot. If you were doing multi-residential, you got about $9 a square foot. Now, on custom homes, people are getting $9 or $10 a square foot, and on multi-residential, they’re getting $5,” says a longtime carpenter now working in management for a major construction firm. “So rates in Massachusetts have gone in half in 20 years. So if you were a carpenter [between] 1999 and 2003—and say that guy just hired you off the street—you would get $20 an hour cash. Now, its 2020, the guy hires you off the street, you’re still getting $20 an hour cash. So the rate has not moved.”¹⁴

Brian Richardson, Organizing Director for NASRCC, adds:

So, you know, inflation in construction—land has gone up a thousand percent, material has gone up double in the last 10 years, but the labor price is actually going down, you know. Not necessarily what the subcontractor is bidding, but what the subcontractor is actually paying his people has gone way down. So, you know, the developers are making a lot of money, the contractors are making a lot of money, but the community suffers, the worker suffers because of this dynamic.¹⁵

Similar to situations in meatpacking and fish processing, the entrance of immigrants did not result in the deterioration of jobs in residential construction; rather, working conditions and pay became so bad that subcontractors faced continual labor shortages.¹⁶ Thus the growth of immigration, especially from Central America, created a large pool of workers to fill jobs in residential construction. Their undocumented status, however, made them extremely vulnerable to employment abuse, and with a growing number of undocumented workers on the job, conditions have continued to worsen on most non-union sites.

As was clear in the Harvard report, contractors were already misclassifying their workers as independent contractors, but former NASRCC Executive Secretary-Treasurer Tom Flynn noticed that things were changing. “It kind of shifted into the labor broker model to a point where we are now where a lot of the companies are just flat-out paying people cash. They don’t even exist at all on the books.”¹⁷ This is exactly how it worked in Amherst, MA, at the construction of a major project.

Massachusetts Governor Charlie Baker was on hand on June 14, 2018, for the groundbreaking for the North Square Apartments in North Amherst, Massachusetts. This $47.5 million development of 130 housing units is just a few miles north of the University of Massachusetts, Amherst. The developer for the project, Boston-based Beacon Communities, has built and operates more than 90 developments in 11 states and the District of Columbia and has a long-standing commitment to building affordable housing.¹⁸ In North Square, 26 units are classified as affordable so Amherst will be providing Beacon with $2,795,009 over 10 years as an affordable housing tax incentive.¹⁹

Given the developer’s reputation and its location in a progressive community shadowed by the university, one would expect the highest quality construction carried out by well-trained and fairly compensated construction workers. This would not turn out to be the case. When we examined how the construction was done at the North Square development, we documented nothing less than a tragedy.

Beacon hired Keith Construction Inc. (KCI) as the general contractor for the development. As is the norm for construction projects of this size, KCI in turn hired a number of subcontractors who would take charge of different components of the construction. The contract for drywall was awarded to Combat Drywall Inc., based in Billerica, Massachusetts. Although Combat registered as a company with the Massachusetts Secretary of State in 2013, the firm has no website. Its listings on a number of business webpages show only two employees and a revenue of approximately $160,000 per year.²⁰ These figures do not appear credible, until one looks more closely at the operation of the firm.

Employees of Combat would not actually hang drywall in Amherst or the other jobs they have signed onto as a subcontractor. Instead, they would subcontract the work to a labor broker. This accounts for their low number of employees —although perhaps not as low as suggested online—given that the workers who perform the work are not their employees. The role of their employees, as we will see, is largely supervisory.

In this case, they subcontracted the actual hanging of drywall work to Jimy Reyes d/b/a/Alvarez Drywall, a labor broker. Alvarez is not registered with the Secretary of State in Massachusetts as a business, has no website, no phone number, and no real company identity. Alvarez finds the workers to do drywall. Combat primarily supervises workers on the job, and Alvarez is expected to pay them. Neither Combat nor Alvarez consider the workers to be employees.

As a labor broker, Reyes, who the workers knew as “Poncho,” simply brought workers as individuals to the job site. He provided no tools, no ladders, and no Bakers (the rolling scaffolding named after an original manufacturer that are the basic staging for hanging drywall) Workers provided their own basic tools, including a screw gun to affix the drywall to the studs, knives to cut the sheetrock, and routers to make holes for light switches and receptacles. The big equipment, the Bakers and ladders, were provided by Combat, not Alvarez.

Combat Drywall is not alone in this reliance on labor brokers. Jonathan Nuno started in construction as a teenager—he is now 30—and he has 15 years of experience in residential construction, most of it working for labor brokers in drywall and metal framing. Starting out in New England was not easy for him. “I think it was Thanksgiving, and I was working with Poncho [Jimy Reyes, the labor broker who also worked on the Amherst North Square Apartments]. Around that time, he didn’t pay me, and we were struggling. … It was coming up to two weeks. … I went [into] the holidays with no money.”²¹ He reached out to the Worcester-based Carpenters Union organizer Manny Gines. Nuno told us that Gines “went, and he met up with the guy, and he got me more money than I was supposed to get paid, because he made them pay the time and a half [for the overtime he had worked].”²²

Nuno worked a number of years for labor brokers who were subcontractors to Metro Walls. Metro Walls is a very different kind of firm than Combat Drywall,. According to the company website, “Metro Walls was established in 2004 in Manchester, New Hampshire. In less than a decade we have grown to one of the leading drywall & framing companies in New England.”²³ Metro Walls’ owner and President Mike Dion grew the firm’s sales tenfold from $770,000 in 2010 to $7,940,000 in 2018.²⁴

The Metro Walls website further boasts: “With more than 250 employees and up to a 600-man workforce, the company proudly provides outstanding solutions to the region’s biggest and best contractors.”²⁵ Unlike many drywall companies who rely almost exclusively on workers brought to them by labor brokers to do the actual work of hanging drywall, the firm has its own workforce. But even in the numbers it reports publicly, the company reveals a reliance on labor brokers and the workers they recruit, more than double its workforce.

One of the major factors behind Metro Walls’ growth and profitability is its ability to hold down labor costs by routinely using labor brokers—brokers who never pay overtime, keep wages low, pay in cash, do not deduct payroll taxes or pay into the workers’ compensation or unemployment insurance contributions and routinely cheat workers out of wages. This became the practice of not only modest companies such as Combat Drywall, but also of major industry players like Metro Walls in major markets such as greater Boston.

Nuno describes working on a Metro Walls job. “We get to the jobsites; we sign into Metro Walls’ sign-in sheets. That’s what you do, we’re on their payroll, supposedly.” But he continues, “I never got hired by Metro Walls.” And he knows he won’t be paid by Metro Walls, but by the labor broker who actually hired him. So, says Nuno, “When we are on the site, if any OSHA [staff] or any person outside of the site comes through and asks us anything—could be union guys, it could be anybody—they ask us who we work for, we got to say we work for Metro Walls, yeah.” He adds, “I’ve seen people get fired for saying that they work for the subcontractor [labor broker].”²⁶

“Sometimes, the company already has a name for you to sign in with.” He explains how this is an attempt to make their employment practices look more legitimate. “What they’re doing is they’re rotating guys sometimes that are on their payroll, and using their names over here, or using them over there, just to try to make some sort of paperwork on these jobs.”²⁷ What may have been haphazard early on was fine-tuned by Metro Walls. To anticipate regulators and auditors, the firm built in a system to cover the tracks of its illegal behavior. Brian Richardson explains. “So, when somebody comes from the AG [Attorney General] and says, ‘I want to see, you know, your payroll records,’ they show 80 guys. The AG says, ‘Well, they have 80 guys; they have workman’s comp, everybody is getting what they’re supposed to be. They’re good.’” But Richardson adds that despite appearances this is just a manipulation: “Nobody actually has the names or knows who the workers are. Nobody ever peels the onion back.”²⁸

In terms of the labor brokers who worked with Metro Walls, Nuno reports that the workers on the job knew nothing about them. “A first name, and where to meet him so you could get paid, sometimes not even the real name, it’s a nickname.” I’ve talked to workers that have been working for the same guy for almost two years, and all they know about him is his name and that he pays them every week.’”²⁹ Carlos is a young carpenter who got his start hanging drywall in the non-union residential housing industry.” When it came time to be paid, he tells us, “They would either come to our house or we’d go to their house or meet somewhere. It would be the most underground thing ever. Always cash.” When asked if he ever saw the labor broker on the job, he replied, “Never, they’re never there.”³⁰

Jonathan Nuno reports that on Metro Walls jobs the labor broker is nowhere to be seen. The job is run by a Metro Walls foreman. When pushed about how he knew these foremen were from Metro Walls, Nuno reported that they told him they work for the company, and “they have Metro Walls shirts, Metro Walls trucks, coats … they’re company guys. And that’s the person that you talk to if you’re going to leave early or anything, anything like that. …Even [the foreman’s] helmet, his hard-hat, its Metro Walls.”³¹ Given that the work is entirely run and managed by Metro Walls and not the labor broker, this is without a doubt the illegal misclassification of these workers.

From our interviews it is clear that the era of residential construction being built by the employees of contractors and subcontractors is largely over. In projects large and small built by small and very large non-union firms, the new model for residential construction in the Commonwealth is that residential buildings are built by workers not directly employed by general contractors or subcontractors but supplied by labor brokers. It is important to look more closely at labor brokers and how they operate in this new environment.

As we have seen in small firms such as Combat Drywall and in very large ones like Metro Walls, the majority of work in drywall is done by workers who are not direct employees of general or subcontractors. As this became more the norm in nonunion residential construction, the demand for workers far outstripped the informal networks that supplied workers in the early 2000s. In this void, a new labor intermediary has emerged that in many ways represents the addition of another level of subcontracting in residential construction. As we saw in both examples, Combat Drywall and Metro Walls relied on workers brought to them by a labor broker. It is important to note that the brokers are neither involved in the actual work nor are they the employer of record. They simply provide workers for the jobsite. Although the subcontractor does the supervising – which classifies the workers as employees – the workers are not considered employees. Instead, they are handed cash by the broker, who gets paid by the subcontractor.

Like most drywallers in the Boston area, Fernando has worked for subcontractors doing business with Metro Walls. He describes the economics of working for a labor broker. Grabbing a notepad that was on the table he jots down numbers as he talks. “Metro would start by paying each guy, $28 an hour, while the second guy [subcontractor] comes in, they’re paying him $24 an hour [and he] gives me $20. … Sometimes even a third tier where he’s taking $2 off of him and the worker ends up getting paid $18 an hour.”³² As Fernando details, up to $10 per hour are being taken from workers by brokers who actually do nothing on the job, except supply workers. And, he adds, he was paid in cash, always in cash. He had no record of his employment or what he was paid.

The brokers realize that if they paid workers by check and issued 1099s, they could be traced. So, for them it is strictly a cash operation. But in this world of cash, it is easy for brokers to delay paying workers in a timely fashion, to pay them less than they earned, and sometimes to not pay them at all. This is what happened at the North Square Apartments in Amherst, Massachusetts.

In the construction industry, workers get paid at the end of each week they work. Although Combat was supervising the drywall hanging at North Square, the workers were supposed to be paid by Alvarez in cash. When payday came, Alvarez (Jimy Reyes) told the workers “That they were going to have to wait two, three weeks for him to pay them.” Alvarez said that Combat Drywall had not paid him. As one worker explained, “This guy Alvarez says, ‘You’re going to have to wait for two, three weeks before I get caught up … [so] keep on working.”³³ From experience, the workers knew that these kinds of delays were not uncommon. Having already invested a number of weeks of their time, they knew that walking away would make it very difficult to stake claims on the substantial amount they were owed, so they stayed on.

Several of the workers also reached out to Frank Gomez, an organizer with the North Atlantic States Regional Council of Carpenters (NASRCC), based out of Worcester, Massachusetts, on June 14, 2019. Some of the workers on the Amherst project had also worked for Combat and Alvarez on a Plumb House project in Weymouth, another case Gomez had been investigating because Alvarez hadn’t paid his workers properly. “I went to Weymouth and I saw all of them working over there. And I show up, and I said, ‘Look, this guy you’re working with is going to rip you off sooner or later. And here’s my card.’”³⁴ For a number of years, the NASRCC has employed organizers like Gomez who work full time assisting nonunion workers in the industry combating wage theft. They have become a known presence in the non-union residential industry in the North Atlantic states.

Combat’s owner, Luc Gagnon, was no stranger to Gomez. “He is a repeat offender,” Gomez acknowledges. “He’s been doing it over and over.”³⁵ By the time Frank Gomez became involved in the Amherst project, nine workers had worked five six-day weeks averaging 10-hours a day. The workers estimated they had hung one half of the sheet rock for the North Square Apartments³⁶ and had not been paid one penny by Alvarez Drywall or any other entity. This is classic wage theft: namely, failing to pay earned wages to some of the most vulnerable workers in America. All of this in a development built by a socially conscious developer underwritten by the taxpayers in the progressive town of Amherst.

Gomez got nowhere with his efforts to reach an informal settlement, so he filed a Wage Complaint with the Massachusetts Attorney General’s office on July 28, 2019. The complaint reads, “The workers who performed drywall and related duties at the Beacon Properties, Cowls Road, Amherst, MA project were hired at the rate of $26.00 per hour for straight time. These workers worked a total of 1,361 straight-time and 303 overtime hours during the [period] listed.”³⁷ The total owed amounted to $50,713—$35,386 for straight time and $15,327 for overtime—and not a single worker had been paid for this work.

But what happened in Amherst is not the exception. Virtually every non-union worker we interviewed reported regularly being cheated out of their wages. Carlos describes the process. “You don’t want to pay me for a week? I can’t go to your boss and be like, ‘he won’t pay me,’ because your boss doesn’t even know I’m there. He doesn’t know who’s working for his subcontractor. He doesn’t know who’s below the sub. He doesn’t know any of that. So, to him, he doesn’t even know you’re on the jobsite. How is he going to know that you were there? He doesn’t. So, you can’t come to him, ‘oh, I worked 40 hours this week, he’s only trying to pay me 25.’” With his voice on the edge of anger Carlos exclaims, “You can’t. You’re just a number. And even if you’re not a number, you’re nobody. All they care is about their production, their money, and their people.”³⁸

Fernando explains, “That happens all the time, and it’s part of the game. And unfortunately, when you’re a Latino, you get discriminated against.” He recalls when he first started working for a labor broker for Metro Walls: “They owed me a thousand dollars that I just [have] never been able to recover.” Fernando reflects that he “did not have enough education, not enough know-how to know how to react in situations like that.””³⁹

Based on our interviews it is well known in the industry that many labor brokers make their income from stealing the wages of their workers. But this is not a system driven alone by the unethical and illegal behavior of labor brokers. Brian Richardson describes how the general contractors and subcontractors take advantage of the labor brokers, many who have limited English and are inexperienced in running large jobs. “They don’t have the business acumen.”⁴⁰ We interviewed a longtime carpenter who now works for a construction firm. He describes how the process works for him. “So, when we bid these jobs, you know, I spend a lot of time looking at blueprints. We have multiple people looking at it, we ask advice, we figure it out, we figure out hours, methods, site logistics.” It is a very different process for the labor brokers. “They just say, how much? Okay, we’ll do it. And then they will abuse the workers by not paying them, or whatever it takes to make whatever money they have in their head. So, there’s no math that they’re doing. They just take the job for whatever they’re told and that’s it, and they don’t care.”⁴¹

The carpenter goes on to explain the perverse incentives: “They’re just happy to have the job, because if they’re going to lose money, they just walk. They go, ‘Well, I got 20 grand: I’m happy with 20. I’m out, see you later.’” In terms of their crew, “they’ll make promises, on the next job, I’ll take care of you.⁴² As he describes it, all the power remains in the hand of the general contractor.

If they’re not happy with the framer, then they back-charge the framer, throw them off the job, steal the rest of the money from his contract. Then the framer can’t do anything, because he’s doing everything illegal, so they go, you’re done. We’re taking your 600 grand, you’re gone, and then they pay the next guy. And then if they don’t like him, they say the same thing and they pay the next guy, because when the framer’s doing something illegal, the general contractor has total control. They’re in charge. You don’t like it? You don’t want to fix it for free? You don’t want to do what we want? We’re just going to get somebody else, and they’re not going to fight, because they know they’re doing something illegal.⁴³

But despite this failure of the subcontractor being unable the finish the work, it is a boon to the general contractor. Richardson explains, “So when he doesn’t get it done… I don’t pay him because he didn’t finish, and I hire somebody else [saying] ‘I’ll give you $20,000 to finish it.’” But in terms of the total cost, the contractor is getting a lower price. The contactor wins, the labor broker wins—not by actually performing the work they were supposed to do, but through stealing the wages that their workers were supposed to get. And the workers lose. The carpenter now working for a contractor says that the contractors know all this: “Well, they’ll never admit to that, but they know. They don’t care; they’re just looking to get the price as low as possible.”⁴⁴

We had the opportunity to interview a labor broker who works in the greater Boston area. Jorge is young and new as a labor broker, although he has had jobs in the industry since he was a teenager. He works for a variety of firms including Optiline,⁴⁵ a large regional drywall contractor competing with Metro Walls. Jorge agrees with the workers we interviewed about how jobs are run by the big sheetrock companies. He was very clear that he does not run the job. “Every company has their own foremen. So, they tell me, ‘we have 16 units on this floor that are ready, it’s these, these.’ So, I just call my crew, we take them up.” Jorge is unusual in that unlike the majority of labor brokers he actually works on the job. We asked him again, just to be sure who was in charge, and he repeated that the sheetrock companies are: “Yeah, they’re actually supervising.”⁴⁶

Jorge explained how he determined a bid for a job. He replies that “there’s not a lot of mystery” in hanging drywall. “Usually, we don’t really work with bids. Companies like Optiline and Combat Drywall, Metro Walls, all those companies—they have a set price for each sheet they put. And that’s how we usually work.” Jorge says he then turns around and pays his workers—a pretty tight crew of family and friends—also by the sheet. This is a pretty tough way to run a business. Without making any calculations, he is assuming that all of his overhead and profit needs to come out of the difference between what Metro Walls or Optiline pay the broker per sheet and what he pays his workers per sheet. But he doesn’t really have any bargaining power. This is what the big companies are offering—take it or leave it, he says: “It’s tough out there. If you let yourself get eaten, you’ll get eaten.”⁴⁷

Following the path of many textile workers and plasterers before him, Richard Pelletier came down from Quebec to New England in 1986. He worked as a subcontractor until 2002 when he started Universal Drywall. “We had over 120 [workers] at one point. Everybody was getting a 1099. Everybody was paying taxes. Everybody was [living] the American dream, except for maybe two or three guys that didn’t pay taxes, that couldn’t own a house, couldn’t own a truck. But it’s better than what we have today, with the labor broker.”⁴⁸

“The labor brokers came in and at first, it was just the one guy. And then they’re like, ‘I have two other guys I could bring on, if you need more guys.’ So, there’s always like the need for more guys, if you’re taking on some larger contract, bigger jobs. So yeah, bring them. … And then that kept growing and growing.”⁴⁹ Pelletier goes on to describe how this fundamentally changed his business. “We were a management company, where we hired subcontractors that knew what they were doing…So we were managing the drywall industry, not really doing the work ourselves.”⁵⁰

In 2015, Pelletier decided that this business model would no long be viable for him, and he decided to become a union contractor. “I didn’t want to monitor everybody’s payroll. I have one business to run. I don’t want to run 6 businesses or 10 businesses. And I don’t want to run a subcontractor’s business, making sure that their guys are getting paid on payroll. … or pay anybody in cash.” He concludes, “I like the union better, because I know everybody gets a payroll check, and nobody gets paid in cash. And everybody is paying taxes and doing their work every day. Guys are getting better benefits, pensions.”⁵¹

The net result of this use of labor brokers—and, as we have seen above, sometimes sequential labor brokers—is that it makes it virtually impossible to work as a legitimate non-union contractor who fairly (legally) pays workers. Tom Flynn describes:

Not too long ago, [we had a] wood frame [job] with a big national developer. … Three union companies bid it. They were all within $100,000 of each other … and they’re all bidding it through the lumber yard, so, you know, they’re giving a price for labor and materials. The non-union contractors [bidding on the job] through the same lumber yards, their price was $4 million less than the union contractors. … There’s only one way you can get to a price that’s 40% to 60% of what the other guy was … The common denominator is the use of the labor broker.⁵²

The carpenter we spoke to who is now working for a construction company suggests that the difference between legitimate non-union companies and the labor brokers used to be “10% more. Now it’s almost sometimes 40, 50%.”⁵³ Industry insiders we interviewed suggested that as a result, there are virtually no legitimate non-union contractors operating in drywall in the greater Boston area or anywhere in the Commonwealth. The labor brokers have now taken over in the industry.

Labor brokers work entirely in the world of cash which makes their operations invisible. Although labor brokers may be receiving checks from subcontractors, our interviews suggest that labor brokers do not use conventional banking services that would leave traces of these deposits, but instead choose local cash-checking services. As many have noted, these check-cashing firms operate outside the regulatory framework that governs more traditional banking and therefore escape monitoring. This provides the mechanism to avoid taxation and formally declaring income.⁵⁴

Additionally, paying undocumented workers in cash (as well as not classifying them as employees) means that no one is responsible for the employment of undocumented workers—there is no paper trail to follow. When contractors first began using independent contractors, they issued them 1099s, which is required under IRS regulations. But they discovered that these 1099s could be traced and abandoned them in favor of cash transactions.

In many ways this new business model is a response to the increased use of undocumented workers and amounts to a workaround absolving general contractors, subcontractors, and even labor brokers from any responsibility for employing workers without appropriate papers. Actual records for these undocumented workers do not exist in non-union residential construction—yet as we have seen, they are its dominant workforce.

As much as this cash world benefits employers—and putting aside for the moment the wage theft that all too frequently occurs—it has an additional cost for undocumented workers. As the Biden administration begins to explore paths to citizenship for undocumented workers in the United States, one of the important factors will be individuals’ work records; they will help to demonstrate not only a worker’s level of responsibility, but also the fact that many undocumented workers have already paid large amounts of federal and state taxes, as well as made contributions to the Social Security system. As Gladys Vega from the Chelsea Collaborative suggests, “it’s a way that they can put in an immigration application ’Listen, I was undocumented, but I never stopped paying my taxes.’”⁵⁵ Undocumented workers in residential construction who are paid in cash will have no such records, even though many have worked for extended periods of time.

According to a number of people we interviewed, some labor brokers also provide letters to the people who work for them so that they can receive free health insurance through a state program. As one contractor reported, “They just have to go to their boss, and they have to do a letter, saying you make $400 a week. So, I’m able to get that letter signed by my boss and go and apply for free health insurance.”⁵⁶

As we have seen, labor brokers operate in a netherworld—a world of cash without legal responsibilities and without regulation. They accept jobs they are not sure they can complete within budget, and then they steal workers’ wages to ensure their own profitability. And because the workers they supply to the job site are not their employees, they—and the subcontractors who employ them—absolve themselves of any responsibility for their wages or benefits, working conditions, or their safety and health. It is important to take a closer look at the consequences of the business model.

In our interviews with drywallers, what we learned about their working conditions was harrowing:

We try to do it simply, as fast as we can so that we’re not hurting. But at the end of the day, your body feels like you can’t lift your hand, then next day to get up at four o’clock in the morning to be in at six, you’re like, I don’t want to go. I don’t want to go. Do we have to? And then you know in your mind that you’re going to have to go do ceilings again. And then you’re going up a ladder, and you’re carrying it, and you’re… ready, I’m ready, and then you miss a screw, and then [a co-worker], he’s like, “Hurry up,” and you’re like, “Trying, I’m trying.” And he’s like, “Oh, shit, I’m fuckin’ tired! Man, come over and help me.”

Fernando, now in his late 30s, was hardened by surviving almost a decade in the non-union drywall industry, recently just joining the union. He brought along with him his nephew, also a drywaller. Maybe 20, he looked young and innocent. Fernando spoke about how hard it was on his body when he first started in the industry. The contractors he was working for would squeeze as much out of them as they could. “I was working six in the morning to six in the afternoon for $125.” He laments that things have not changed at all in the industry over the decade. “This was how I lived ten years ago, but you know, the bad thing is that my nephew here has lived it [since] two years ago—it’s still the same, [he’s] going through the same as what I went through.”⁵⁷

We interviewed two union carpenters who went to work as “salts” for a labor broker. “Salting” refers to the process whereby union members go and work for nonunion employers to both gather information about non-union employers and to potentially organize new union members. One of them describes the setting:

The working conditions there were—the break was 10 minutes, 15 the most. Sometimes they only gave you lunch break, and that’s it. And it was sometimes 15, 20 minutes for lunch and that’s it. Trash is all over the floor, people tripping—you could trip and fall really easy. Nobody ever knows anything. Who’s the foreman? What’s his phone number? “Oh, I don’t know, you have to wait until he walks around.” It took me three days to find out how much I’m getting paid, when I first started working. And the people were afraid to ask for money, because they’ll let them go right away. It was an eye opener because I was in the union sector.⁵⁸

After working several months on this crew, this carpenter’s colleague, who also had more than a decade of experience, told us:

They’re working harder than any documented person, I could say. I see them working, they’re killing themselves. This is slavery, the way that they’re working. This is not humane. … It’s 100 degrees outside, because it was hot in the building we were working, and you want to take a two-minute micro-break, what we call micro-break, to drink water, I don’t think you should get in trouble for that or feel like you can’t do it. These people don’t feel like they can do it. They work so hard that they don’t even want to go down to the bathroom and use the bathroom, they just grab a water bottle, and they’ll just piss into a water bottle and keep going. They feel like they don’t produce X amount they’re going to get fired.⁵⁹

NASRCC organizer Martin Sanchez talks about the pace. “They work more than eight hours, yes. They get paid for those, no. They work seven days a week, yes. They get paid for it, no.” But it doesn’t stop there. He continues, “You know what’s the saddest? That you can go to a project on a Sunday, he brings his kids to help him.”⁶⁰ He describes stopping by Assembly Square, a Callahan (a very large nonunion general contractor) job site in Somerville:

And this guy was insulating, rushing the job because the electricians are behind him. The plumber was ready… And I was there walking the floors. I saw the kids. And I said, “Why you here?” “Oh, I’m with my dad.” “Uh, where’s your dad?” “He’s out there insulating.” People are paid by the sheet, so, in that case, you bring your teenagers along…⁶¹

The vast majority of the workers in drywall are young. When I asked Nuno how many workers over 50 were in this trade, he responded, in the “non-union world, none.” His co-worker responds, maybe “one, two, or three.” They guessed that the average age is 20. “I’ve worked with kids that are 16 years old, man. The thing is they’re hungry, they’re undocumented and need a place to work.”⁶² We asked one of the union organizers, Ernie Belo, to imagine, given these working conditions, what their lives will be like at 60. “Oh, 60? Half of them will be in wheelchairs. Um, they’ll have to go back to their country because they won’t be able to survive here. They don’t have anything. They don’t have any Social Security. They can’t go on disability. They pray that they save enough.” He told me about an undocumented worker he’d been on the job with. “He worked 20 years in the construction industry here. He went back. He’s all busted up. He told me, ‘Oh, Ernie, my back, it’s my knees.’”⁶³ For those who can’t go back, Brain Richardson adds, “That’s a person the average taxpayer is going to pay for, forever, you know.⁶⁴

Workers for the labor brokers that Metro Walls relies on told us about the terrible condition of Metro Walls equipment. “The equipment they provide you, like skill saws and the Baker scaffolds, the ladders, all these other things that they give you, are sometimes in worse conditions than your own personal tools that you brought from your house,” Jonathan Nuno tells us. He describes how Metro Walls supplies Bakers whose “wheels are broken, but you either get it done or you’re going to be out of a job. So, all these guys keep working and keep working until somebody gets hurt, and then they come with new Bakers after, and—because OSHA’s all over the building—they got to make it look nice.”⁶⁵ It’s not just the Bakers, Nuno says: “I’ve dealt with saws with ripped cords, saws with no (safety) guards.”

Without proper equipment they make do with what they have. “I’ve hung over stairs on two-by-sixes, from ladder to ladder, on top of a bucket, to hang drywall,” Nuno recalls. “You can’t say no, because then they’ll just get someone else to do it anyways. So, you just kind of go for it, just kind of wishing for the best.”⁶⁶ It is troublesome to think of these makeshift solutions, when in fact there is equipment designed to assist with the hanging of drywall. A sheetrock lift is a simple mechanical device that allows one worker to load a piece of drywall and, using a crank and a pivot, allow the sheet to be precisely positioned into place so it can be fastened to the wall or the ceiling. These kinds of lifts are standard equipment in union jobs. Nuno worked for over a decade in the non-union drywall industry and reports:

The first time I’ve seen a drywall jack was my first time in the union. … I swear to God I never knew it existed. I never knew it existed until I came on a jobsite for the union, and they were like, “Okay, you’re going to hang ceilings by yourself.” I’m like, “What the fuck?” They’re like, “twelve-footers.” And I’m like, “Give me an eight and I’ll be there all day hanging.” So, [he] comes over with this yellow thing with little buttons. What the fuck is this? I didn’t know how to use it. I’ve never seen this thing before. So, I went to the other room next door where the other guy was working and I see him, he was already jacking it up. I’m like, holy shit…⁶⁷

Instead of using basic technology that would create safer work conditions and higher productivity, the labor brokers throw the bodies of young undocumented workers at the work at the workers’ peril. And this not just the case on small informal jobs, but on the multimillion-dollar projects Metro Walls bids on. But what one don’t see in the glossy photographs on their website is the primitive working conditions that largely undocumented workers must endure to create these spaces.

Accidents and injuries are commonplace on a Metro Walls job. “I have a friend who’s a taper,” says Jonathan Nuno. “She sliced her whole [side of her] face, working for Metro Walls, actually. Never got a dollar for it. Never got nothing. Didn’t even get paid the days she was off. She had no choice but to literally just cover it up and go back to work the very next week.”⁶⁸

Nuno has his own story about being injured on a Metro Walls jobsite “I can’t feel this finger because I got cut on a jobsite, and this whole side of my hand, it’s practically dead. I went to the supervisor and I told him, ‘Hey, I cut my hand,’ and they were like, ‘Oh, yeah, yeah, put some alcohol on it,’ and they give me a Band-Aid. Little did I know I cut a nerve.”⁶⁹

Although workers on the Metro Walls jobs are brought in by a labor broker, the broker doesn’t train workers, teach them how to work safely, or even check if they have the general manual skills or the specific skills necessary to hang drywall. Any training that takes place on the job is actually done by the workers themselves. Without any training “You got to learn from somebody,” tells Carlos. “You watch and learn, you listen—that’s how you learn.”⁷⁰ Carlos learned from his brother. NASRCC organizer Frank Gomez concurs “The training they have is another guy.”

Fernando describes how, in fact, it is almost impossible to work safely. “They just want so much production, having [safety] glasses, you start sweating, and they become burdensome. With the gloves, because you’re putting so many screws, so fast, they start getting in the way. In the union, because it’s not at an exploitation pace, you’re able to be safe but in the non-union [work], you’re not, because [this kind of protection], it’s just going to get in the way; you’re not going to get the work done that they want you to do.”⁷¹

Milagros Barreto is an organizer with the Massachusetts Coalition for Occupational Safety and Health (MassCOSH). When we asked her about how often wage theft occurs in residential construction in the Boston area, she replies, “Every day,” and provides example after example.⁷² She is “OSHA-training certified in general industry, and it’s really sad when you stand in front of the students and say, your employer has to provide you your personal protection equipment, and [then the students] say, ‘They never gave me the appropriate gloves, and they didn’t even give me a mask or a respirator.’” Barreto continues, “What I’ve been hearing is that most of the time the equipment is in really bad condition. There’s a lot of retaliation also in construction. … You know, like when a worker says, ‘listen, this ladder is broken,’ and then next day they don’t call him to come to work.”⁷³

Brian Richardson describes how injuries have become commonplace for those working for labor brokers:

I bet [we had] 30 cases in the last five or six years of people who get hurt at work, were dropped at the steps of the hospital, [and told] “You were hurt at home.” … And then, you know, there’s no comp. They’re not being paid. They’re just dumped in the hospital. One of his workers fell off a Baker staging, doing drywall, and had a compound fracture of his leg, bone through the skin. Went to the hospital; they knew he didn’t have insurance. … They treated him, but they didn’t want to do surgery on him because, you know, it’s an expensive bill and they were trying to figure out who was responsible. And it just played on and played on and played on. So, when we interviewed him, it was almost a year after, and the foot was still, like, the darkest purple I ever saw. It wasn’t quite gangrene, but it looked like that. Still couldn’t walk on the leg; had gone a year without any income, his wife working two jobs, trying to keep the house going. And the company just walked away, abandoned him.⁷⁴

A major local subcontractor feels very strongly about safety on the job for his people and is upset about how conditions have changed since labor brokers appeared on the scene. “They’re wearing sneakers. They’re not wearing hardhats, not wearing safety gloves. They’re using stilts instead of ladders. On and on. I mean, it’s just a very dangerous situation.”⁷⁵ They also point out that “Debris is certainly one of the safety aspects. It can be dangerous if workers aren’t focused on putting up barricades. They’re not covering up holes that are open in floors, then there’ll be safety issues there. Those are the types of things that we see.”⁷⁶ The contractor and his site managers are not afraid to speak up about these issues to the general contractors; he provided several examples of pulling their workers off jobs sites because of these safety concerns.

In the middle of conducting this research, tragedy happened at a construction site in the state. “We had a new case in Framingham,” says NASRCC organizer Frank Gomez. “There was a worker that fell through a roof and then he actually died onsite. He was brought back twice, and they sent him to a hospital.”⁷⁷ There were guys working on the roof with a bunch of rotten spots that were covered by plastic and … he went through one of the rotten spots on the roof. It was very, very bad. It was a head injury.”⁷⁸

As reported in a local news site, the worker was not an employee of Dellbrook, the general contractor on the site. Instead, “Framingham Detective Stacey Macaudda discovered Dellbrook had hired a subcontractor, TCT Contractors, to work on the roof at the power plant building. The worker had been hired by a TCT subcontractor, Milford-based GS Siding, just a few days before the accident.” The story continues:

Framingham Detective Stacey Macaudda … interviewed GS Siding owner Camilla DeSouza at the scene. DeSouza told the detective the worker was just trying out for a job and hadn’t officially been hired. DeSouza was unsure if the worker had received OSHA safety training. “I asked (DeSouza) for his information as well as any family contact information, and she responded by saying, ‘I don’t know really know his name or anything about him, we are trying him out, it’s his third day, I don’t even know if he has an OSHA card, I didn’t get any information on him yet,’” Macaudda wrote in a police report.⁷⁹

Something didn’t seem right about the police report to Gomez. First, workers don’t “try out for construction jobs.” The most plausible explanation is that the worker was brought to the job by GS Siding acting as a labor broker. And Gomez found evidence that he had in fact worked for them for a long time. He pulls out his phone, shows us a photo, and tell us, “In fact, I just found a picture when the guys were on the roof of that same building … so it’s happy Fourth of July, it’s on Facebook, the company posts it, the guy’s right there on the roof.”⁸⁰

Although the newspaper reported that the worker had recovered, Gomez went to see him at the hospital and reported that he was in very rough shape, very confused and not even sure where he was. There were no further reports on him, his condition, or his recovery in the local press. Just another victim of labor brokers and this new business model of construction.

Our interviews have revealed a great deal about this new business model of residential home construction. We have seen how it jettisoned regularized workers employed by contractors and subcontractors, and how it relies now almost exclusively on workers supplied by labor brokers. These brokers have emerged in a very large scale in the Commonwealth and play a central role in the process. Because they have chosen to work in a cash world, the brokers, the subcontractors, and the developers who hire them have insulated themselves from responsibility for the working conditions, the safety and health, the compensation of workers, payroll taxes and benefits and the immigration status of the workers. And despite their shiny exteriors, these new housing developments and multi-unit buildings are built by workers who are hyper-exploited in unsafe and dangerous working conditions with virtually no oversight or consequences. Although labor brokers themselves are small informal entities, our research clearly demonstrates that many major developers and general contractors have fully accepted their fundamental place in the new business model, and it reveals how they have become mechanisms for generating profits.

As we saw at the North Square Apartments site in Amherst, Massachusetts, as well as in several others that utilize Metro Walls, these are not marginal projects at the fringes of the economy; they are among the largest complexes built by major developers in New England. As the former carpenter who works for a major contractor told us: “On the multi-residential jobs that are 50 to 100, to 200, 300, 400 units, every one of those (non-union) jobs is guilty for sure, because they’re importing workers from wherever, it’s just cash money hustle for sure. And there’s just no job site inspection, there’s no enforcement, there’s nothing going on. No one cares, the GC doesn’t care, no one cares because everyone’s making money, that’s it.”⁸¹

NASRCC’s Tom Flynn speaks about how this model has emerged, partly as a result of the changing economics of the building industry, particularly because of the cost of land. “In more urban areas, the price of the land is tremendous, right? … So that’s part of the economics of this is that with the land prices being so high, developers [have] also been squeezed, and one of the ways they top up their profit is again, is by communicating to their GCs and then to the subs that we have to build this cheaper. … Their investors would be demanding that they build it for as cheap as they can.”⁸²

And developers accomplish building more cheaply by adopting this new business model and using labor brokers. “Part of the business model is that general contractors know who they’re going to be working with. It’s a line of history that they got already. They know the practices of the subcontractor. And they just try to cover their eyes not knowing the reality,” Martin Sanchez an NASRCC organizer, tells us. He continues, “And they know that they can bid that project lower because they’re going to be using that guy, that company, that sub. And they know that the sub is going to be using that labor broker… I can put a bid on that project for this developer for so much amount of money less and get that project, knowing that I can hire like I did on the project before.”⁸³

Based on our interviews, we see no indication that this business model is being effectively challenged. In the Commonwealth today, developers and general contractors are insulated from any legal action, so that they continue to exploit this system, as well as the workers who actually do the construction, to increase their profits despite changes in the industry. And now that the use of labor brokers has become central in residential construction, it is virtually impossible for legitimate non-union subcontractors to compete and they are quickly disappearing. Tom Flynn suggests that this will continue at even a greater pace in residential construction, with the involvement of major lumber distributors were now increasingly becoming directly involved in large scale residential construction. He describes:

The big national developers that develop thousands of units all over the country, they want to deal with as few subcontractors, suppliers, as they can. So, they go to National Lumber and ask National Lumber to give them a price for a turnkey operation, which means that they want them to not only supply the product but also give them a cost for the labor that is going to take place to build this building. And in many cases, National or Lumber 84 they give the subcontractor a price, and they say, if you can do it for this price, you can have the job. They know full well that the only way that they can get to that price is by, misclassifying the workers or paying them in cash. The developer knows that there’s only one way for them to get to that number, and that’s for them to be cheating, but they have plausible deniability because they’re not the ones that are actually taking the bids. They’re taking the bids through the lumber yard.⁸⁴

Our interviews provide insights into the mechanisms by which this new business model operates in residential construction and the consequences it has had on workers and contractors in the industry. To offer perspective on the extent and economic costs of this illegal behavior, we now turn to a quantitative analysis of the construction industry in Massachusetts.