Drywall Strike Exposes Industry to U.S. Scrutiny
A two-month walkout by workers in the drywall business has yet to win them the union they are demanding. But it has prompted several federal agencies to investigate the industry and may change the way drywall companies do business.
Allegations piling up against the industry paint an unsavory picture of a business that exploits Latinos--many of them illegal immigrants--by paying low wages with no overtime, health insurance or other benefits.
The latest agency to jump into the fray is the federal Department of Labor, which will investigate allegations that the companies don’t pay overtime, a violation of federal law.
The U.S. Immigration and Naturalization Service is already investigating as many as 10 companies that it says may have broken the law by knowingly hiring illegal immigrants.
The number of accusations is unusual even for the construction industry, long considered a business where corners routinely get cut. No matter what the outcome of the strike, the federal investigations could give a black eye not only to the drywall subcontractors but also to the home builders who hire them.
Even the companies’ own trade association, the Pacific Rim Drywall Assn., says that it is urging members to turn in companies that may be violating state and federal tax laws by paying workers in cash only. So far, none has.
“Everybody has suspected one or two guys of doing it,” said Bob Sato, a Newbury Park drywall subcontractor and president of the trade group, which includes most of the bigger drywall companies in Southern California. “When a company consistently underbids you by a wide margin--as much as 35%--there may be something wrong there.”
The state Employment Development Department launched an investigation of cash payments in the industry in 1989. The results were meager, one official said, because few drywall companies cooperated.
That the companies are talking about turning each other in now is ironic, said a former drywall subcontractor who says he left the business because of the corruption. “Where were they when times were good?” he asked.
The investigations are not likely to be finished in time to either help or hurt the drywall workers who walked off the job June 1. Many of them are desperate after having been out of work for two months, and some have gone back to their jobs.
The building industry contends that the strike is running out of steam, that drywall is being nailed onto the wooden frames of houses faster now than early in the strike.
For the 4,000 or so Southern California drywall workers, most of them immigrants from small towns in central Mexico, wages haven’t risen since the home builders broke the union 10 years ago. In the past two years, as the housing market has gone down the tubes, wages have sunk as low as $300 a week.
The strikers have slowed down new-home construction in San Diego, Orange, San Bernardino and Riverside counties. Drywall subcontractors in Los Angeles and Ventura counties say they are less affected.
