Labor Shortages, Higher Costs Seen : Business Ponders Effects of new Immigration Law

Housecleaners and nannies may be harder to find and more expensive to hire. Building contractors may find themselves overwhelmed with new record-keeping responsibilities. And restaurateurs and others who fear the civil and criminal penalties associated with hiring illegal aliens may decide to stay clear of anyone who looks foreign or speaks with an accent.

As a sweeping overhaul of the nation’s immigration law goes to the White House, industries that employ large numbers of undocumented workers predict everything from massive labor shortages to higher costs and extra paper work.

Some industries, including agriculture, expect a steadier supply of workers, and small business envisions an end to unfair competition from stores that now save money by paying cash to illegal alien workers. But others fear they will be unable to fill low-paying or low-status jobs without the illegal workers.

“There is going to be a shortage of child caretakers, cooks, chauffeurs, butlers and housekeepers,” said Jerry Bohne, president of Household Agencies and Nurses Registry Assn. of New York. “It’s going to create some mess for the working women, the professional couples and the elderly and disabled who rely on companions and nurse’s aides for home health care.”

The effect of the immigration law will be as great on business as on any segment of American society because Congress chose employers as its chief tool to stem the flood of illegal aliens pouring across the borders.

The measure, designed to cut off the jobs attracting the illegal immigrants, threatens employers with penalties ranging from $250 fines for a first offense in hiring an illegal worker to jail sentences for habitual offenders. To soften the impact on industries that rely on immigrant labor, the plan offers legal residency to aliens who have been in the country since before Jan. 1, 1982, or, in the special case of farm workers, those who have done 90 days of field work in a recent 12-month period.

Business leaders say the sectors most heavily affected will be agriculture, service industries such as hotels, restaurants and domestic services, construction, manufacturing and retail, all of which depend on temporary or seasonal workers.

Although the granting of legal status to illegal aliens who have lived in this country for a long time will allow these businesses to keep much of their current work force, some of them fear the loss of the steady influx of new workers.

Bohne, who heads a New York association of about 90 agencies that provide housecleaners and companions for the elderly, said that only about 1% of those who apply to those agencies for domestic work are U.S. citizens. The rest are legal or illegal aliens.

“There aren’t enough Americans willing to do these jobs,” he said.

He predicted that most agencies will not risk a fine or loss of license by referring illegal workers, and the smaller pool remaining will be able to demand substantially higher wages.

Many middle-income families that depend on domestic help will be hard-pressed to pay the higher costs or may have to do without, he said. Some households will be forced to break the law and find other means of hiring illegal workers, he predicted. Those lawbreakers probably will include some of the very officials who supported the new reform, he speculated.

“The people who sit on Capitol Hill, they are the ones who order cooks, chauffeurs and butlers for dinner parties because they like all this fancy dancy stuff,” Bohne said. “It would be interesting for somebody to scope out the Congress and the Senate and find out who they’re paying for their help and how they got them.”

The owner of a domestic referral agency in Southern California, who spoke only on the condition she not be identified, said she has no idea where she will find enough maids to meet the demand. “If we had to require everyone we place to be legal, we’d be out of business,” she said.

In her business, she said, “legality doesn’t concern me. References concern me.”

Construction industry representatives said they do not expect severe shortages because most of their jobs pay enough to attract legal residents. But contractors said that they dread the additional paper work that will be required to prove that all their workers are legal. Employers will be required to check the identification papers of all workers and make a record of the documents they produce.

“Certainly the paper work that is going to be required is going to be horrendous,” said Dennis Bradshaw, executive director of the Associated General Contractors of America. “Some phases of construction last only a week to a month and contractors are going to have to maintain a record of every employee if they are going to defend themselves against a suit or government action.”

Although probably more illegal aliens work in agriculture than in any other industry, farm organizations predicted that the amnesty provisions that would grant legal status to farm workers will allow a stable work force for at least the near future.

The bill also provides that if a serious shortage develops, growers and farmers will be able to bring in alien workers beginning in late 1990.

“The long-term effect may be that if agriculture is unable to develop a permanent work force . . . or not able to mechanize, there will be a (worker) scarcity and a driving up of wages,” said Henry Voss, president of the California Farm Bureau. “But I don’t see that as an immediate effect.”

Some business officials predicted that labor shortages will be averted because the government will not be able to enforce the sanctions.

Steep unemployment in Mexico and Central America will continue to bring many workers across the border, and employers’ dependence on these workers may make many willing to risk the sanctions, they said.

The fact that the law allows such workers temporary resident status if they have worked 90 days during the previous year “is the giant loophole that negates all the good things in the bill,” said Bill Butler, president of the Orange-based Americans for Border Control, a group formed in support of the Immigration and Naturalization Service and of its regional commissioner, Harold Ezell. “That’s the hole in the fence that they’ll crawl under, and there are a lot of people out there educating them just how to do that.”

“If the new immigration law is enforced, it will destroy much of the industrial base of Los Angeles,” said Richard Rothstein, California director of the Amalgamated Clothing and Textile Workers Union. “I don’t think it can be enforced.”

Rothstein said many shops that employ illegal immigrants compete with plants in Singapore, Korea and El Salvador, where labor is cheap. “Putting these places out of business will further shift the industrial base abroad,” he said.

Ricardo J. Arciniega, president of the Confederated Clothing Contractors of America, said he suspects that as many as 30 of the 100 workers he employs in his South Gate garment contracting shop are in the country illegally. And, he said, each of them has shown some kind of evidence--including Social Security cards, alien work permits and birth certificates--that support a claim of legal status.

“(But) how am I supposed to authenticate a document?” he asked. “Realistically, I don’t think they (sanctions) can be enforced. . . . You can buy and sell green cards (alien work permits) on the street.”

The owner of a garment factory in Orange County, who asked not to be identified, said that at his peak employment, “about 99%” of his workers are Latino.

He said he has hired only five non-Latino workers because “nobody (else) comes through the door.” Of those five--two whites and three blacks--only one has stayed more than one year, he added.

“If the law takes effect immediately, and I can’t hire people who will work on a sewing machine, I’m lost,” he said.

Arciniega said, however, that he believes the new law will not mean much--at least in terms of enforcement for the near future--because sanctions can be easily circumvented.

But some hope that the penalties will be enforced vigorously.

Mike McKevitt, Washington counsel for the National Federation of Independent Businesses, said his small businesses are tired of competing with larger firms that cut costs by hiring illegal aliens.

“Small business people are big thinkers,” McKevitt said. “They look at it from the standpoint that if the law is being violated, it’s got to be rectified. And if you’ve got a guy across the street who is hiring illegals and you’re hiring legals, it’s unfair competition.”

If the sanctions do work, unions predict, many workers will enjoy better working conditions and wages. Vincent Trivelli, legislative representative for the AFL-CIO, said that even potential employee shortages for some jobs could be beneficial in the long run.

“Bring up the wages and the working conditions--then you’ll be able to find people to do the work,” he said.

But a continuing fear shared by industry, unions and Latino activists is that employers will simply not hire those who appear to be foreigners because of fear of the fines.

“We believe that people of Hispanic, Middle Eastern or Asian backgrounds may have problems getting jobs if they don’t happen to have on them their birth certificate or proof of U.S. citizenship,” said Delfino Varela, a Los Angeles attorney who is the legal counsel of the Mexican American Political Assn. “If they look Hispanic or Asian, employers are going to be afraid to take a chance on them.”

Varela also worries about legal residents who lose or have their work permits stolen. “It takes INS three years to replace them,” he said, referring to the Immigration and Naturalization Service.

Amin David, president of Los Amigos, a group of Latino businessmen in Orange County, said that businessmen “don’t want to be borderline cases of breaking the law. It puts a tremendous burden on us who own businesses. There’s no more room for such burdens . . . .”

The owner of a sheet metal fabrication plant in Santa Ana that has about 20 illegal aliens on its payroll said he would be more reluctant to hire Latinos because of fear of the new law’s penalties.

“We’ll have to interrogate them more and be more careful,” said the owner, who requested anonymity. “There are a lot of legal people who are Hispanic, too, but we’ll just try to get more documentation before hiring them.”

The legislation bars employers from discriminating against job seekers merely because they are non-citizens, but it allows them to choose a citizen over a legal alien if both are equally qualified for a position. Despite the latter provision, the bill still establishes “all sorts of incentives for litigation” by disgruntled job applicants, complained Virginia Lamp, an attorney for the U.S. Chamber of Commerce.

“This legislation is going to pull the sheet off the immigration problem in this country,” Lamp said. “It is going to expose the extent to which (illegal immigration) is a problem and the extent to which our economy is dependent on undocumented workers.”

Maura Dolan reported from Washington and Henry Weinstein from Los Angeles. Contributing to this report were staff writers Bob Schwartz in San Juan Capistrano, Maria L. La Ganga in Costa Mesa and Gary Abrams in Los Angeles.