The Social and Economic Costs of Illegal Misclassification, Wage Theft and Tax Fraud in Residential Construction in Massachusetts

UMASS AMHERST LABOR CENTER | ICERES Institute for Construction Economic Research

 

Tom Juravich

Professor, Labor Studies and Sociology

University of Massachusetts Amherst

juravich@umass.edu

 

Russell Ormiston

Associate Professor, Department of Economics, Allegheny College

President, Institute for Construction Economic Research

rormisto@allegheny.edu

 

Dale Belman

Professor, School of Human Resources and Labor Relations,

Michigan State University

Institute for Construction Economic Research

drdale@msu.edu

 

June 28, 2021

The Social and Economic Costs of Illegal Misclassification, Wage Theft and Tax Fraud in Residential Construction in Massachusetts
Executive Summary
Introduction
Part One: The New Business Model For Residential Construction In Massachusetts
(1) The Hyper-Exploitation of Precarious and Undocumented Workers Illegally Misclassified
(2) The Emergence of Labor Brokers, Wage Theft, and Corruption in a Cash-Only World
(3) No Limits, No Safety, No Responsibility
(4) Beyond the Margins—Developers/General Contractors Fully Embrace These Business Practices
Part Two: The Extent And Economic Costs Of Worker Misclassification In The Massachusetts Construction Industry
(1) The Prevalence of Wage and Tax Fraud
(2) The Economic Costs of Wage and Tax Fraud
(3) Conclusion
Part Three: How The Current System Fails Workers, The Industry And Masssachusetts Taxpayers And How We Can Restore Fairness And Integrity In Residential Construction
(1) Rebuilding a Vigorous Monitoring and Enforcement System in the Commonwealth
(2) Holding Developers and General Contractors Responsible for What Happens on Their Job-sites
(3) Regulation of Labor Brokers
(4) A Path to Citizenship for Immigrant Workers
Acknowledgements
About the Authors
Supporting Organizations
Endnotes

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