Firm’s INS Problems Show Impact of Immigration Law

When the new immigration law was passed in 1986, Henry Gamboa knew he was going to have to make some changes. For years, his family-run manufacturing firm in this San Diego suburb, the Rainbow Steel Co., had relied on undocumented workers to fill a third or more of a work force that now numbers about 20.

“I knew it was going to impact us,” said Gamboa, a chunky, energetic 29-year-old who could be a prototype for a certain kind of hustling, fast-talking small businessman. Gamboa maintains that he quickly brought his ornamental steel manufacturing firm into compliance with the law, which makes it a crime for employers to knowingly hire illegal aliens.

But U.S. immigration authorities say he did not act fast enough.

One of First Fined

In November, Rainbow Steel became one of the first firms in the nation to be notified that it would be fined for hiring illegal aliens and failing to fill out the required paper work. Gamboa, who faces a $1,500 fine, acknowledges a paper work violation but denies the central charge and has requested a hearing.

While it is one of about two-dozen similar cases pending nationwide, the case of Rainbow Steel is illustrative of the impact that the immigration law is having on thousands of U.S. employers, both large and small. From clothing manufacturers to restaurants, from farmers to hotels, other firms have been or will be forced to make significant changes. If they do not act quickly enough, owners could find themselves subject to fines, like Gamboa, or even jail terms.

Way to Remain Competitive

“This (Rainbow Steel) would not be an atypical firm,” noted Anna Garcia, a research associate at the UC San Diego Center for U.S.-Mexican Studies who has investigated the effects of the new law in Southern California. “Hiring the undocumented is one of the ways many firms have remained competitive while continuing to manufacture in the United States.”

While many assume that most undocumented laborers are unskilled, in fact, firms such as Rainbow Steel have developed a dependency on skilled and semi-skilled illegal aliens, particularly from Mexico, who have knowledge in fields such as welding and are willing to work hard for low and moderate wages.

Gamboa, the president of Rainbow Steel, says he has reassessed his operations and made significant adjustments in his business in light of the law. He says he has insisted that four longtime workers--all illegal--apply for amnesty, thus averting any legal threat to the firm. And, with an eye toward future expansion, Gamboa says he plans to start a training program designed to avert a future labor shortfall.

Worker Shortage Cited

“There’s a shortage of skilled workers, no doubt about it,” he said during an interview in his busy second-floor office, above where laborers weld, grind and shape steel bars into ornamental fences and grates. “We can’t rely on skilled people walking in here from Mexico anymore. That’s why we’ve got to start training.”

But the law also prompted Gamboa to make a more drastic move: He laid off four workers who did not qualify for amnesty. As it turns out, Gamboa says all four were on his payroll before the immigration bill was signed into law--meaning Rainbow Steel would not have faced legal sanctions for maintaining them as employees.

Gamboa, however, says he was unaware of this exception. He blames the confusion on the Immigration and Naturalization Service--a criticism frequently leveled at the agency by employers and others.

‘You Have to Go’

“Every time I talked to them (INS officials), they told me a different story,” Gamboa recalled, recounting several conversations with immigration authorities. “Finally, I almost threw my hands up in the air and told my workers, ‘If you’re not legal, and you don’t qualify for amnesty, you have to go.’ ”

The confusing signals emanating from INS offices are likely to be an issue raised in the upcoming administrative law hearings of Rainbow Steel and other firms.

Mester Manufacturing, an El Cajon waterbed manufacturer that was the first California firm notified that it would be fined under the new law, maintains that it is wrongly accused and that the INS provided it with ambiguous and misleading instructions, according to Peter Larrabee, the attorney representing the firm. A hearing on the El Cajon case is scheduled for Feb. 9.

‘Law of Land’

Like representatives of the El Cajon firm, Gamboa of Rainbow Steel says he can live with the new law. “It’s the law of the land, and we tend to abide by it--and we are abiding by it,” Gamboa said.

Working in a highly competitive industry that has long attracted undocumented workers, Gamboa boasts that his work staff is now 100% legal. “I’m willing to bet five bucks that we’re the only legal iron shop around.”

The firm was founded 26 years ago by Tony Gamboa, Henry’s father and a first-generation U.S. resident whose parents came from Mexico. In recent years, Henry Gamboa said, sales have increased on the tail of a San Diego building boom.

Why did Rainbow Steel come to rely on undocumented labor? In Gamboa’s view, the answer involves Mexicans’ willingness to work harder than Americans, plus the widespread knowledge of welding in Mexico, where small iron shops are commonplace.

‘Go That Extra Bit’

“In California, the ornamental iron-work field is 80% Mexican or Hispanic,” Gamboa said. “This is not just welding; it’s a skill, like glass cutting. . . . Mexicans are very hard workers. They’re on time. They hardly ever give an excuse. They’re always willing to go that extra bit.”

While U.S. immigration officials and others have long condemned the practice of hiring undocumented workers, Gamboa, a self-described Reagan Republican, says he never felt a moment’s guilt.

“We have never hired people just because they were illegal, because we could pay them less. . . . All of my competitors were hiring them, and I couldn’t find legal people to work and do as good a job. They just weren’t out there.”

‘Too Laid Back’

Gamboa recited a series of bad experiences with his non-Latino employees--despite extensive efforts to recruit workers through classified advertisements, government programs and other means. “Maybe Southern Californians are just too laid back to do this kind of work,” he theorized, only partly in jest.

While few Americans may be willing to take minimum-wage jobs as field workers or in apparel factories, iron work can be relatively well-paying. Gamboa says his starting workers earn $5 to $6 an hour and can eventually make as much as $16 hourly.

Even before the new immigration law, businesses such as Rainbow Steel faced certain risks in hiring undocumented workers. At any time, businessmen knew, immigration agents might descend on their plants, costing them a part of their work force. Gamboa says he experienced several such raids a year.

‘There’d Be Havoc’

“They’d come in here, take out four of five workers, and there’d be havoc,” Gamboa recalled. “Most of ‘em would be back the next day or so, though.”

For the workers at Rainbow Steel, the law has been a mixed blessing. For those such as Herminio Cardenas Suares, who appears to qualify for amnesty, there is the happy prospect of finally becoming a legal resident--a feeling that is tempered by sorrow for those, including his brother, Ruperto, who lost their jobs because of the law.

“The law has mixed everything up,” said Cardenas, 25, a slender, soft-spoken native of the state of Jalisco whose wife is expecting their first child. “I hope I can become legal and stay in this job. I like this work. You have to have discipline, and you have to work hard, but it’s good work. You can do something different every day.”