Down Mexico way

Illegal immigration is suppressing Tar Heel wages, but this boon to business also is creating a new underclass.
by Edward Martin

Blood spatters the man’s face, his lips taut in death. The manager of the Mazatlan glances up from the Sanford restaurant’s cash register at a customer looking at a faded photograph on the wall. “Emiliano Zapata,” he says cheerily. The Mexican rebel, who promised peasants liberty and land, was assassinated in 1919. In other pictures, revolutionaries wearing bandoleers sit on the cowcatcher of a captured locomotive.

The restaurant, in a worn motel on the outskirts of town, is frequented by local Latinos and low-budget travelers. Over supper, Oscar Torres, as he had introduced himself, had told in strained English of the promises that led him here. Five years ago, rumors reached his village in the Mexican state of Coahuila that Tar Heel farmers paid high wages for easy work. At 19, he wound up in the sweet-potato fields of Spring Hope, in Nash County. Two years ago, he heard of easier work here, indoors.

One study says 75% of Hispanics who’ve come to the state in the last 10 years are here illegally.

Torres says he is an ilegal. This morning, he awoke at the trailer he shares with four others and drove his 10-year-old Ford pickup to a Sanford poultry plant. All day, he dangled chickens on the hooks of a production line where workers ripped out their entrails. His $8.25 an hour is almost half again what sweet potatoes paid, and the plant doesn’t short his wages the way the farmer did. He is one of about 1,000 workers, and by management’s count, 97% are Hispanic. Torres estimates 80% are illegal, with forged immigration documents and fake Social Security numbers. A plant spokesman insists it has no illegal workers.

Torres is part of an economic and social revolution. Barely 25 years ago, Hispanics were a rarity in North Carolina. By some estimates, their numbers are approaching one in 10, and in a few occupations — construction, for example — they hold more than a third of the jobs. Without Hispanics, some economists say, the state economy would come to a near standstill. People would pay more for goods. Houses would go unbuilt.

Despite such positives, there is evidence that Hispanic immigrants, who often work for half the wages of legal residents, are dragging down the pay of other North Carolinians while benefiting the bottom lines of their employers. It’s a phenomenon experts call wage depression, one impact of a shadow economy where tens of thousands in North Carolina illegally toil in swine and poultry plants, on farms and in other jobs.

Few are happy with the economy that has been created. Illegal immigrants say they’re exploited, employers still complain of labor shortages, and many native North Carolinians feel threatened by what they perceive as a swarm of newcomers who broke the law to get here. “Whether you’re right, left or center, the system is broken,” says Bill McFadden, a Sanford legal aide specializing in immigration law.

The effect of Hispanics on North Carolina’s economy is difficult to quantify. But a recent study by professors John Kasarda and James Johnson Jr. at the Frank Hawkins Kenan Institute of Private Enterprise at UNC Chapel Hill has found that:

 

  • About 600,000 Hispanic immigrants live in the state, 270,000 of them illegally. (New York securities firm Bear Stearns estimates the number of illegals is double that.)
  • Wages paid to Hispanics in North Carolina, even after they sent $1.7 billion to their families in other countries, had an impact of more than $9 billion in 2004.
  • Three-quarters of the Hispanics who have come to North Carolina in the last 10 years have done so illegally.

 

Although the Kenan analysis describes immigration largely as a positive for the state, buried in its numbers are the details of wage depression. Three-quarters of North Carolina’s Hispanics work in four industries — construction, wholesale and retail trade, manufacturing and agriculture. Native construction workers have felt the impact the most. In 2004, their wages were 7.4% — $980 million — less than they would have been without the impact of Hispanic labor. Farm wages were 6.6% lower.

Overall, wages across the state were depressed 1.4% — $1.9 billion — because of the impact of Hispanic workers. All unskilled native workers, such as the 270,000 who’ve lost jobs in textile mills and apparel plants since the 1970s, have been hit hard. “It’s basic supply and demand,” says Jacob Vigdor, a professor of public policy and economics at Duke University. “The more unskilled workers available, the lower the price — the wages — will be.”

Another of illegal immigration’s economic tolls may ultimately be measured in human terms. Lower wages threaten to create a permanent segment of Hispanic workers in which poor housing, substandard education and exploitation are the rule. In Sanford, where food-processing plants made it one of the state’s earliest magnets for Hispanics, a middle-age Mexican couple that came to America illegally but gained citizenship worry about the increasing numbers of illegal immigrants and the potential for a new underclass.

“They are different,” says Jose, 42, a stout man who wears a “Mexico” T-shirt and talks through a translator. He came in the 1980s. Mojado — wet — he says, laughing as he imitates a swimmer with his arms. But he and wife Maria, 41, own a house and are supervisors in a plant. “There are gangs, alcoholism. They sell drugs,” he says. He and his wife have been able to get ahead in life, but the next generations of immigrants may not be so fortunate.

The history of Hispanic immigration in North Carolina and how its economic impact has become so widespread are well understood by Leticia Zavala, the daughter of migrant laborers. She lives in Dudley, south of Goldsboro in the flat farmlands of Wayne County, where ground-hugging cucumber vines, prickly as a cat’s tongue, stretch to the horizon. Zavala, 26, is a farm-labor recruiter who travels to Mexico each year to sign up workers in villages such as Rosamorada, on the country’s west coast. There she sees tobacco-field laborers who earn 80 pesos a day, less than $8. “The same worker can come to North Carolina and be paid $8.54 an hour,” she says.

That differential makes it easy for her to attract legal guest workers for the North Carolina Growers Association, a labor co-op. But in 1980, when she was born as her parents traveled the Eastern U.S., the census counted fewer than 60,000 Hispanics in the state, most of them legal migrant workers. By the early ’90s, McFadden began seeing the trickle of immigrants grow in Sanford, Siler City, Pittsboro and other communities in central North Carolina.

“A phony green card and Social Security number would cost you $1,000,” the legal aide says. “The counterfeiter would demand $500 up front. When he had enough orders, he’d fly to Los Angeles to get them done.” He would collect the other $500 when he returned. Now, with the Hispanic population more than 1,000% greater than in 1980, a fake green card — actually a pinkish card that looks like a driver’s license and certifies the holder is a permanent legal resident —goes for $30. “One of the other hot items is counterfeit immunization records,” says Charlotte-based Jeff Jordan, assistant special agent in charge of Immigration and Customs Enforcement — ICE — in North Carolina. “Illegal aliens need them to get kids into public schools.”

Why the rising tide? The growth of service-oriented jobs created more opportunities for Hispanics in urban areas, which many prefer. By 2004, about 70% of Hispanics in North Carolina were in metropolitan areas. Also, critical mass set in. Maribel Diaz, director of Lee County’s Hispanic Task Force in Sanford, estimates her county population of nearly 50,000 is more than 10% Hispanic, up from 2% in 1990. Word spreads. Families follow. More people come, creating opportunities for small Hispanic businesses to sell ethnic food, videos from home and the like. Each creates the need for workers, clerks, suppliers. Even more people come.

Another change since those early days is the route they take to North Carolina. Immigrants such as Jose and Maria, the couple now living legally in Sanford, rarely came straight from Latin America. Jose, whose home was Tacambaro in the Mexican state of Michoacan, was typical. After fording the Rio Grande, he worked in the Florida tomato fields, then on onion farms in Georgia. Next, he harvested peppers in Michigan, where a friend enticed him to move to Durham. There he heard of work in a Pittsboro chicken plant. Between 1995 and 2004, about 40% of Hispanics came from other states — California, New York, Florida and Texas primarily. About 38% came directly from another country. The rest were born here. Now, North Carolina is the original destination for most of them, about 80% coming from Mexico.

At the Hispanic Task Force office in a Sanford shopping center, volunteer Mayra Garza types a letter for a young man. Marcus is ilegal, 30 and from Honduras. He has been in Sanford less than a year. He works in a manufactured-housing plant and says he was drawn by North Carolina’s reputation among immigrants as a place willing to overlook illegal status in exchange for cheap labor.

He already has a North Carolina driver’s license. Officials say that since 1997 the state has issued more than 260,000 to immigrants who lacked Social Security numbers and other identification required in most states. “The ease in getting a driver’s license has been one of the biggest magnets for illegal immigrants,” says U.S. Rep. Virginia Foxx, a Republican lawmaker from Banner Elk. One of several North Carolina members of Congress who threatened last year to block billions of dollars in federal highway funds if the state didn’t crack down on licenses for illegals, she accuses the state of bowing to business interests concerned about the supply of the low-wage labor provided by Hispanics. “We certainly aren’t doing all we could to make it difficult for them.”

Ron Woodard agrees with her perspective. He’s head of NC Listen, a 300-member, Raleigh-based immigration-reform group. The state recruits low-wage employers by quietly touting cheap labor, he says, citing a N.C. Department of Commerce advertisement promoting “affordable” nonunion workers.

Hispanics, on average, make less money per year than other Tar Heel workers because they're less educated, have less seniority and, in many cases, are here illegally.

The surge of Hispanic workers might be another nail in organized labor’s coffin in North Carolina. It is already the least-organized state with only 2% of all workers represented by unions. The state encourages illegal immigrants to come because their fear of deportation makes them unlikely to buck authority through union drives, says James Andrews, president of the Raleigh-based North Carolina AFL-CIO. That’s not so, N.C. Secretary of Commerce Jim Fain says. “It’s clear North Carolina has a more affordable work force than other parts of the country, but that doesn’t mean we’re recruiting low-wage jobs.”

Politically, Hispanic immigration has divided even the ranks of conservative Republican voters and officials, with national-security advocates arguing for tighter controls and businesses lobbying for cheap labor. Tar Heel politicians often try to avoid the issue altogether. For example, Gov. Mike Easley’s office handed off questions about immigration to Fain, whose spokesman repeatedly attempted to refer them to the N.C. Department of Labor. “At the end of the day, this is an important set of issues,” Fain says, “but they’re federal issues that need federal attention.”

The topic is a hot potato in part because it affects hundreds of thousands of voters’ paychecks. Wage depression is one reason incomes for the state’s lowest-paid workers — immigrants and those competing with them — have risen only an inflation-adjusted 12%, 88 cents an hour, since 1979, says researcher John Quinterno of the nonprofit N.C. Budget & Tax Center in Raleigh. That compares with 21% for middle-income workers and a 40% increase at the top.

Wage depression puts at risk not only low-income jobs but the state’s blue-collar middle class, once its economic backbone. “What we’ve got is an hourglass economy,” Quinterno says. “We’ve created jobs at the high end, but they require high skills and education. We’ve created many jobs at the low end, but they don’t pay wages that support a family.”

The boss of bosses, he called himself. Jefe de jefes. And the role he played documents both the powerful lure of cheap labor and how illegal immigration in North Carolina is growing at the eighth-fastest rate of any state. Though he seemed a model citizen — a former Tyson Foods Inc. poultry worker who had opened a Mexican grocery in a small town in central Tennessee — Amador Anchondo-Rascon led a secret life.

He was the arranger. “He’d call contacts in Mexico and tell them how many workers we needed for a plant,” says John MacCoon, a federal prosecutor in Chattanooga, Tenn. “Then he’d say, ‘Yeah, we’ll have 25 at such a location tonight.’” An undercover agent says Anchondo-Rascon would find the spot, on the Texas side of the border, and blink his headlights. “They’d come running out of the bushes.” Forty-eight hours later, they would be gutting chickens at Tyson plants in Monroe, Wilkesboro and elsewhere.

Immigration agents charged Anchondo-Rascon of Shelbyville, Tenn., Tyson Foods and six managers with 36 counts of smuggling illegal immigrants and other crimes. Anchondo-Rascon was convicted. Two managers pleaded guilty, another killed himself before trial, and two were acquitted; charges were dropped against the other one. Tyson, which was cleared, argued that its managers had acted on their own — despite payments made to Anchondo-Rascon with company checks. That was in 2003, but it’s not over.

Four Tyson workers are suing the company, alleging that it employs illegal immigrants to depress wages for all workers. They’ve asked the court to certify their suit as a class action, which could apply to all Tyson employees. Gary Mickelson, spokesman for the Springdale, Ark.-based company, denies that Tyson knowingly hires illegal workers. But it can’t, he adds, root out identity fraud. “We believe companies should not be placed in the role of policing who has proper work documentation.”

However, Tyson, which has 11 plants, feed mills and other operations in North Carolina, has lobbied for looser laws on employing immigrant workers. During a national day of Hispanic demonstrations April 10, Tyson excused workers at Tar Heel plants who wanted to attend the rallies. Though employers are required to verify applicants, enforcement is increasingly difficult. “There is such a thing as willful blindness,” says Jordan, the ICE agent, who points out that no North Carolina company ever has been charged with hiring illegals. A spokesman for the Government Accountability Office in Washington says only four employers nationwide were charged with hiring undocumented workers in 2004. That’s compared with more than 400 in 1999.

Once in factories or farm fields, illegal immigrants are essentially home free, which Jordan concedes. “It’s not as simple as putting them on the big green bus, carrying them back to Laredo and kicking them off.” They receive the same protections as legal residents, including due process, and are getting bolder. “Now it’s a matter of hiding in plain sight. They figure, with the sheer volume, ‘you can’t get us all.’”

The proponents of looser immigration laws argue that they are necessary because Americans won’t do difficult and dirty jobs. But every weekday at 6 a.m, garbage collectors warm up their trucks and pull out of the Charlotte Sanitation Department’s headquarters, within a mile of downtown’s bank towers. The city has more than 260 sanitation workers, nearly all of them native-born blacks. They are paid $20,000 to $30,000 a year, plus insurance, vacations and other benefits. City officials say they sometimes have a waiting list of applicants.

Scenes like that take place all across the state. “Nobody can look you in the face and honestly tell you we have a shortage of workers,” says Woodard, the NC Listen director. “What we’ve got is a shortage of workers willing to work for $6 an hour, because at the end of the day you can’t raise a family on that.” Few jobs, he contends, would go unfilled if normal economic forces set wage levels without the artificial downdraft of poorly paid illegal immigrants.

The differences between what Hispanics and other workers are paid in some fields are startling. The Kenan Institute study shows non-Hispanics in information technology average more than $47,000 a year, compared with $17,000 for Hispanics. In construction, Latinos average $19,216 a year; others earn $37,518. Though Hispanics, on average, have less education and experience than other workers, that alone does not account for the gap.

“We’ve created many jobs at the low end, but they don’t pay wages that support a family.”

Nevertheless, what immigrants earn here is substantially more than they would in Mexico, so they are willing to put up with a lot on the job. Maria, the immigrant who is now a citizen, says illegal workers are treated differently in the Sanford poultry plant where she works. “They are supposed to take care of four chickens a minute, but when there is pressure, they speed up the line. If [illegals] complain, they say, ‘We’ve got three or four applicants waiting for your job. We’ve got a stack of applications this tall.’” She holds her hands a foot apart. “But if I complain, they listen.”

Such circumstances may make it hard to turn the tide of wage depression. Membership in the Vass-based North Carolina Growers Association has declined to about 500 from 1,000, partly because fewer farmers are raising tobacco but also because many more are hiring illegals for less than the association’s minimum of $8.54 an hour. Co-op workers have visas and are guaranteed sanitary housing and other benefits illegal workers often lack.

On a late winter day, Zavala sits in her office in Monterrey, a sunny city of white buildings at the base of the Sierra Madre Oriental Mountains. She spends several months a year there, seeking Mexican workers for the Farm Labor Organizing Committee. It is a rich city, like Charlotte or Raleigh. Her office is a block from the U.S. consulate, which issues the guest-worker papers for the laborers she finds for the Growers Association.

Outside Monterrey, a change has come to the villages. “People live on the mountainsides,” she explains. “They’re farm workers. They’re poor. They harvest tobacco or tomatoes. But from May through October — harvest time in North Carolina — there are few there.” She calls the villages los ciudads del fantasma. The ghost towns.