Crackdown Still Hard on Business
Five years on, Alabama’s tough illegal immigration law, HB 56, has been greatly weakened by the courts but remains a drag on many of Alabama’s biggest industries.
Workers at the Wayne Farms plant in Dothan surround a chicken processing machine that uses water to cut chicken to match each buyer’s specifications.
Paul Moore vividly remembers when House Bill 56 was approved.
“We lost a lot of good people,” Moore says. “The ones who bailed out on us were legal, but they were concerned about their family members, and so, just overnight, I lost five really good guys.”
Moore is president of Moore Construction, a small general contracting business in Trussville, started by his father. He jokes that he is president, janitor and human resource director for the firm and says he does “about 90 percent of the hiring.” Most of the firm’s work focuses on churches.
Moore Construction, like many other companies across Alabama, still feels the impact of House Bill 56, approved by the Alabama Legislature in 2011, even though many of its most far-reaching elements were invalidated a year later by the U.S. Court of Appeals for the Eleventh Circuit.
The bill, officially called the Beason-Hammon Alabama Taxpayer and Citizen Protection Act, required all employers to register with a federal citizenship verification program called E-Verify, barred Alabama residents from conducting basic business transactions if they lacked citizenship papers and required schools to check the citizenship status of new students. It also required police to demand immigration papers from anyone they suspected to be undocumented and made it a crime to employ, house or supply transportation to undocumented individuals.
Between 40,000 and 80,000 immigrants left the state within a year of the bill’s approval, according to the Center for Business and Economic Research at the University of Alabama. The four sectors most affected were construction, agriculture, hotels, and restaurants and bars.
Those saying good-bye include the five employed by Moore Construction.
“They were carpentry and dry wall type people,” Moore says, “and to be honest with you, I was never able to replace them with people as good as they were. Now I go through temp agencies, and that’s a nightmare. I mean, you go through about 15 people to try to find one good one.”
David Ware, an immigration attorney and founder of David Ware & Associates, headquartered in Louisiana with offices in Birmingham, Florida, Mississippi and Washington state, says the workers who left Alabama probably didn’t go far.
“I think probably what has happened is that the immigrants in Alabama who got scared by this bill, the stop and frisk provisions and all those other things, just went to other states and are happily ensconced working hard and doing what they are supposed to be doing,” Ware says.
“Construction workers are in extremely short supply,” Ware says. “Undocumented construction workers make exactly the same as American workers would make, $20-$25 an hour, depending on how skilled they are.”
And, he adds, “They are very, very hard working and always show up. That’s what I hear.”
Over the years, immigrant workers have been essential to the state’s poultry business. The Alabama Poultry and Egg Association says poultry in Alabama generates more than $15 billion in revenue annually, accounts for 66 percent of annual farming revenue, and employs more than 86,000 people on farms, processing plants and associated industries.
A major player in the poultry industry in Alabama and the South is Wayne Farms, based in Oakwood, Georgia, with Alabama facilities in Enterprise, Albertville, Decatur, Union Springs and Dothan, where a re-tooled facility will require 600 new employees.
“To put it into context, House Bill 56 had a chilling effect on the labor pool in Alabama for us,” says Wayne Farms spokesman Frank Singleton. “In fact, we had a significant decrease in the availability of labor immediately after the legislation was passed. We know that the impact was cultural. Because of that legislation, we lost qualified employees who had been vetted and were legal and documented to work. Those people tend to move to where the opportunities and the jobs are.
“We know that even if they were not affected personally, they might have had family and friends who were. Or there were other opportunities for them where they don’t have to worry.”
Singleton says the labor pool issue is starting to ease some in Dothan. “Dothan is a different area than north Alabama, where it really impacted us, because there is such a large industrial base up there and there are so many other opportunities for people to work.
“In Dothan we have a low turnover rate, a relatively new plant, and we’re adding 600 jobs. We have had good fortune in attracting a number of local people. We work with the Alabama Employment Service and a local job service, and we also advertise in newspapers and other media, and we find a number of employees through word of mouth.”
Singleton says the company has re-hired about 90 people who were laid off during the plant re-tooling as part of the 600 new jobs.
“We work with the tools that the government gives us, and, in fact, we were part of the original pilot program that the government set up to start tracking and managing immigrant labor. We have been complying and working directly with the federal government and paralleling everything they have recommended.
“When people apply with us, we go through the same process every time. We verify, we check their paperwork, and we want the people who apply to know that we are going to vet their application completely and we are going to verify in terms of what the government gives us to work with.”
Fallout from House Bill 56 added to an already serious need for skilled workers. According to an Associated General Contractors of America survey, 41 percent of Alabama contractors reported difficulty finding workers last year and 48 percent say finding skilled workers this year will be more difficult.
Bill Caton, chief operating officer for the Alabama Chapter of Associated General Contractors, says various contractors are trying to find their own ways to overcome the labor shortage, which includes using unions and the temporary employee leasing agencies.
But still, Moore says, his departed employees were hard workers and are tough to replace.
“I go though the temp agencies because I just haven’t had any success hiring anybody who, quite frankly, has a good work ethic and wants to work, and we just got tired of hiring them and then having to get rid of them, and they file unemployment on you and you have to fight that going through, and it just became a never-ending battle,” Moore says.
“So I said to heck with it and now we just go through temp agencies, and when I don’t need the workers anymore, I just call the temp agency and tell them I don’t need them.
“I have some key people who are part of our company. When I hire people we just try to hang on to them and try to guide and direct these guys the best we can. And occasionally we get a good one, and we try to hang on to him, but we work him through the agency. When I get a guy who is good, I can dictate to the agency and say, ‘I want this guy to make certain amount of money.’ We have had a little success doing it that way, dictating his pay. And when I am through with them, I don’t have the hassle of unemployment and all that stuff.”
McAbee Construction, of Tuscaloosa, uses the union approach to find employees.
“We use the building trades unions for our work force,” says Gary Nichols, president of the company. “The building trades have different referral halls for each different skill set. Every employer has to decide where his referral sheets come from, and we chose the building trades because of the apprenticeship training and the skills that they more or less guarantee.”
The situation doesn’t promise to right itself anytime soon.
Ware says, “According to several studies that have been published recently, the out-migration is more than the in-migration now, which has dropped considerably because of the militarization of the border and better law enforcement, and the out-migration has picked up a little bit because of bills like House Bill 56, making certain states very hostile to immigrants.”
“That is something we talk about daily,” Moore says. “I would say the future is bleak at best with the labor pool that is out there. We’re fighting it daily, and it is a terrible issue, and the problem is, you can’t find anybody with the right attitude that wants to work.”
Moore says he has a core group of employees who have been with him a long time but the laborers he hires five or six at a time will “jump for a nickel an hour more.”
Moore says he often uses subcontractors as temp agencies when the subcontractors are low on work and need to keep their employees busy. “To be honest with you, that works better when we are trying to find skilled people than going through temp agencies,” he says.
Singleton says Wayne Farms agrees with those who say that the best solution is “some meaningful immigration reform. There are technical tools in the market place now that are going to help in this area. It is not an issue that is going to go away. The labor needs in Alabama and the Southeast are great, and these are jobs that without that immigrant labor will go unfilled or be very difficult to fill. It is an ongoing problem.”
Bill Gerdes and Tim Skipper are freelance contributors to Business Alabama. Gerdes is based in McCalla and Skipper in Dothan.