Notes From the Underground Economy
Fortune Small Business
An army of undocumented workers is making it tough for legit businesses to compete. The coming crackdown could be even worse.
Image by celikins via Flickr
By Josh McHugh/San Francisco
May 1, 2005
Gary McLaughlin, an electrical contractor in San Francisco, recently got a call from a real estate agent who needed a house rewired before its new owners moved in. He checked out the house and faxed in his bid. McLaughlin, 31, employs two electricians and a bookkeeper and says his bid was about 25% less than what larger contractors would charge. But it wasn't low enough.
Later that day the agent called back and asked McLaughlin if perhaps he'd made a typo on his estimate. "I have two other bids here," she said, "that are half what you're asking." The difference, McLaughlin told her, is that he has a license and pays workers' comp insurance and payroll taxes on his employees, who are in the country legally.
"Well, that isn't my problem," the agent said. McLaughlin lost the job.