When Ramos saw a new apartment building going up, he did what he usually does: shaped up, hung around, talked to the foreman. The next day, he showed up with his tools, and started work.
At first, things went well. They paid him $80 for an eight-hour day, sometimes in cash, off the books, sometimes with a company check. They even raised him to $85 when he showed his chops. But some days at three, when the guys were supposed to knock off, the foreman would come looking for Ramos. Because he speaks Spanish, they would ask him to translate for the South and Central Americans on the job: There's a delivery coming, we all gotta stick around for another couple of hours.
Ramos would have to tell his coworkers that if they didn't stick around, they were risking their jobs. "It made me a little uncomfortable, 'cause a few things were said not proper, and I had to say exactly how he said it," he says. For example, if a man said he had to go pick up his children from school, Ramos would have to translate the reply: "'Well, that's not my problem. Go get the materials--and if you don't do it, it will cost you your job.'" It was usually another couple of hours before Ramos and the others could go home.
Ramos says they did substantial amounts of overtime for which they never got paid. "Every Friday, when they would get the pay--and it wasn't even a check, it was cash, they used to bring it to us in a little envelope--I complained: 'Listen, what about my overtime hours, and what about the last time, and the week before?'" he recalls. "And they would say, 'Oh, we'll get you next time.' And I would say, 'Look, I asked you at least 15 times out of the week, and you said that last week.' And it never happened."
Ramos is part of the underground workforce that builds New York City's affordable housing. You'll find them gathering at dawn on the sidewalk outside a construction site--they call it "shaping the job"--on the off chance that somebody will hire them. Some are highly skilled; others are demolition men who earn minimum wage or less. Quite a few are highly qualified union members, minorities who can't get work on regular union jobs. Many are immigrants--Latin, Caribbean, some African, though there are still some African-Americans and a smattering of whites.
They have one thing in common: Their cheap, sometimes off-the-books labor is what puts the "affordable" in affordable housing. Most of them are working for subcontractors, or even sub-subcontractors, at the bottom of a contracting chain. At or near the top of this chain are nonprofit community development groups, organizations that exist to make life better for poor people. But for the poor people at the bottom of this chain, their pay and treatment are the dirty little secret of the housing world.
"It's exploitative in many ways," says Susan Friedland, director of housing development for the Fifth Avenue Committee, a nonprofit that builds affordable housing in Park Slope and Red Hook. "I think a lot of contractors, subcontractors, see that there's a high-skilled labor pool, that there's high unemployment--it's cheaper to hire someone and not pay them properly, or pay them, take their wages out and do it all under the table."
Lavon Chambers, who used to be a construction worker on affordable housing projects in Harlem, says conditions on these jobs are some of the worst he's ever seen. "I would challenge any one of these officials who work for these affordable housing agencies to walk with me on most of these sites," says Chambers, who as a community affairs officer for the Mason Tenders District Council of the Laborers Union is now one of a handful of union leaders tackling that market. "The conditions are this: The workers get paid cash. There's no taxes taken out. There's no real record that the workers ever worked there. And if somebody gets hurt, there's no kind of benefit package. If somebody gets hurt, or somebody gets ill, there's no workmen's comp. It's like the Dodge City section of construction."
Most of the nonprofit community development organizations sponsoring these construction projects suspect that they're generating dead-end jobs. Privately, they will admit it. But when they go into housing development, they get caught in a Faustian bargain: In New York's housing crisis, the pressure to build as much affordable housing as possible, quickly and cheaply, supersedes everything else. Nonprofits are put in the impossible position of exploiting the very same people they exist to serve.
"You want to do good, right?" says Yolanda Garcia, executive director of the Bronx community development group Nos Quedamos. "But we don't control 100 percent of everything that can happen. And the bottom line is, we have to house people."
The problem is that men and women who are indirectly working for nonprofits get treated little better than day laborers. Paid as little as they'll take, often stiffed on overtime, they pay with lost wages--or their health--when their bosses screw up. When they complain, they are told it's too bad.
When they get injured, it's rare to call an ambulance. Instead, they're often taken in a van, dropped off at the hospital and told to show up for work the next day. That's what happened to Keith Patrick, an Ocean Hill-Brownsville resident originally from Grenada. Patrick was on the ground level of a work site when a wooden beam fell and hit him on the head, knocking him out. Instead of calling an ambulance, the subcontractor Patrick worked for packed him into his sport utility vehicle, drove him to St. Mary's Hospital and dropped him off. Before driving away, says Patrick, his boss told him to try to come back to work the next day. "I guess the job was more important than me," says Patrick, with an angry shrug.
The job was Prospect Heights Homes, a joint project of Leewood Real Estate Group and the Brooklyn Neighborhood Improvement Association (BNIA). It's not clear if BNIA even knows about the accident--the group did not return phone calls--and developer Randy Lee of Leewood says he knew nothing about it. But Lee adds that it's unusual to call an ambulance when a worker is injured. "I think that construction guys are pretty durable--they take a handkerchief out, wrap themselves up and go," says Lee. "I've seen guys pick themselves up, put their finger in their shirt pocket, and get in the car and drive to the hospital."
Patrick was lucky: Because he was covered by workers compensation insurance, he was able to file a workers comp claim, which his employer did not dispute. But of the dozens of workers that City Limits talked to, on a number of different construction sites, many believe that they have no such recourse. Especially if they're getting paid off the books--and sometimes even if they're on the books--many feel they have no right to object to poor treatment. When they get hurt or get stiffed on their wages, they simply quit that particular job, go out and start shaping, and do it all over again.
"They know that it's dangerous," says Chambers. "They know that the guy they worked next to last week got hurt, and can't go to a hospital. They know that, but what can they do? Right now, eight bucks an hour beats nothing."
At some construction sites, workers call it the "jambulance"--the jitney ambulance, usually a supervisor's car, that ferries injured workers to the hospital. There are different views as to why--Patrick's boss says he thought it would be quicker than waiting for an ambulance--but workers agree that it's rare for employers to call a real ambulance when they get hurt.
When contractors do call an ambulance, they face a variety of problems. For one thing, there's a record of an accident at the work site. That could lead to OSHA inspections, lawsuits, higher workers compensation rates and higher insurance costs. All that insurance really adds up, especially when it's based on payroll, and New York State's skyrocketing liability rates are hitting construction contractors hard. "A roofer recently told me his [insurance] premium was 50 percent of payroll," says Nick Lembo, president of Monadnock Construction, a general contractor that has been building affordable housing for over 20 years. "Which is extraordinary--I've never heard anything like that."
All of which creates a tremendous incentive to keep payrolls low. There are several ways to do that. One is to pay workers in cash. The other is by paying them not as employees, but as independent contractors.
Apolonio "Polo" Campos was paid in this way, and he has 1099 forms to prove it. A 48-year old carpenter's helper from Puebla, Mexico, Campos worked for one subcontractor for at least a year, doing jobs all over the city. One day, it could be the Bronx, the next day, Far Rockaway. "Where the hell is Far Rockaway?" jokes Campos, speaking through a translator. "Turns out it's two hours away! Far Rockaway--it's too far!" In one case, it was Perseverance--a six-story building for very low-income people on the Lower East Side, built by the nonprofit Lower East Side People's Mutual Housing Association.
Campos clearly was an employee, as defined by the Internal Revenue Service: He reported to a foreman every day, and at the end of the day, they would tell him where to show up the next day. Yet he was paid as an independent contractor, responsible for paying his own taxes out of the $8 an hour he was getting. It's not uncommon: Patrick's employer, too, says he pays all his workers on the books, but admits that he sometimes used to pay them as independent contractors (a practice he says he has now discontinued).
But there's an even simpler way to bring the payroll down, one that doesn't leave an incriminating paper trail. Contractors can rely on middlemen like E'uen Potter.
According to Potter, a man from a subcontracting company offered him a deal: If he could find 20 or 30 other guys--preferably union laborers willing to do nonunion work on the side, like himself--he could pay them $280 a room, in cash, and keep the difference, tax free, off the books. Potter would be like a foreman--a subcontractor of sorts.
The practice of paying workers by the room instead of by the hour, called "lumping," is common, for several reasons: It's very hard for workers to calculate how much they're getting paid per hour. Lumping also allows contractors to get more work out of guys, by stringing them along from job to job.
Which is exactly what happened to Potter and his men. Checks would come sporadically, sometimes in his name, sometimes in other people's names, but usually late, and seldom what Potter thought they would be. Potter would take the company's checks to a check-cashing place that took them without asking questions. Then he'd pay his guys--most of them West Indians like himself, with a scattering of Latinos and black Americans and the occasional African--in cash. In the end, the company did put all of that money on the books--making him appear, on paper, a perfectly legitimate, highly paid employee.
General contractors are skeptical that these kinds of things happen. "I can't imagine somebody not getting paid," says Michael Rooney of Novalex Contracting. "If somebody wants to get paid, you can find somebody." But when workers get stiffed like this, they usually just complain to their supervisor--especially if they're working off the books. Most of the time, workers like Campos don't even know who the general contractor is.
"We often will bring a lawsuit against as many as seven or eight alleged employers on one project site because the employees simply don't know who they worked for," says Lloyd Ambinder, a labor lawyer who represents construction workers. "It's not uncommon for a worker to come to us and show us nothing more than a couple of business cards and a couple of delivery tickets from supplies that were dropped off at the site, with the name of a contractor on it, and they think that's who their employer is or was." Of the workers City Limits talked to, the idea that they might be working for a nonprofit community group, albeit indirectly, never even crossed their mind.
One of the projects Carlos Ramos worked on was called La Puerta de Vitalidad--the Doorway to Life, at 3103 Third Avenue in the Bronx. A 61-unit residence for formerly homeless and other low-income people, La Puerta was built by two nonprofits, Phipps Houses and the neighborhood-based group Nos Quedamos.
If any community housing group is dedicated to a broad view of social justice, it's Nos Quedamos. Its very name--"We Stay"--is a defiant pledge to preserve and rebuild the Bronx neighborhood of Melrose Commons for its residents. Nos Quedamos' philosophy is that neighborhood residents should be an integral part of the neighborhood's urban renewal--and that means making sure that whatever building goes on in Melrose Commons benefits those who live there. One of the ways to do that, and one of the group's founding principles, is "to link construction activity in Melrose Commons with job training and employment opportunities."
With La Puerta, Nos Quedamos was in an especially good position to do that. Since 1995, the organization had had a minority apprenticeship program with the New York City District Council of Carpenters. So when La Puerta came along, it seemed like a good opportunity to demand good jobs for those apprentices--especially because La Puerta was a "prevailing wage" job. Prevailing wage laws require that contractors who are working for the government, or getting government money, must pay the going rate in that locality. They originated in the Great Depression, when New Deal legislators saw public works as a way to rebuild the nation's infrastructure and workers' pocketbooks at the same time.
These days, however, the prevailing wage is anything but. Very little affordable housing is done at prevailing wage, which in New York City is pegged to union scale--anywhere from $35 to $68 an hour depending on the trade. Contractors and developers know that paying union scale will add about 10 percent to the cost of their bid. On a $5 million affordable housing project, that can make the difference between getting the job and not. And since most of these affordable housing projects are now built using dollars generated through corporate tax credits instead of direct government subsidy, paying prevailing wages is rarely legally mandated.
The fewer prevailing wage projects go on in the city, the more those jobs are prized. So when La Puerta came along, Garcia wanted to make it a union site, with her neighborhood apprentices getting the highly paid jobs, and hopefully union cards, too.
But after lengthy negotiations, the plan fell apart. After a competitive bidding process, the city's Department of Housing Preservation and Development (HPD) chose a contractor that was nonunion, but was supposed to pay prevailing wage. Instead of the union jobs Garcia had hoped for, Nos Quedamos settled for a "local hiring" requirement, meaning that the contractor would have to commit to hiring a certain number of neighborhood residents and pay them at the prevailing wage. Presumably, Ramos was one of those local hires.
In theory, the nonprofit that is "building" a project like La Puerta has the power to oversee the contractor to make sure they're paying the proper wages. But that almost never happens. "It's extremely rare for a nonprofit to act as a check or balance on a contractor," says Brad Lander, executive director of the Fifth Avenue Committee. "I just don't think we have the knowledge or power--we don't ask for or receive any information at all about how the contractors pay their workers. To the extent that there's any reporting at all on prevailing wage jobs, it's all to the city or to the state."
On a prevailing wage job, the subcontractors all submit individual payroll records to the general contractor, who then reports them to the city or state agency overseeing construction. But the nonprofit has no ability to monitor that. "There's always griping," says Garcia. "And I can only go back and ask for accountability. If the accountability with numbers are there, that's as far as I can go. I cannot say, you're a liar, you're a liar. You follow what I mean?"
One day, while going to get coffee, Carlos Ramos met a union organizer. The organizer told Ramos what the prevailing wage was for the work he was doing: more than quadruple what he was getting. Then, like a movie detective, the organizer handed Ramos a business card and told Ramos to give him a call if he ever wanted to talk.
Ramos did talk to the organizer about ways he might be able to recoup the wages he was owed. But in the meantime, he isn't waiting around: As a mostly off-the-books employee, he's usually ineligible for unemployment. "When you get paid under the books, you can't really count on nothing--no benefits, no coverage. Nothing to fall on," he explains.
Ramos only works, by his estimate, six or seven months out of the year, putting him well below the poverty line. The rest of his time he spends looking for work, prowling the streets of his neighborhood, shaping up with the guys, "trying to stay off my money, trying not to spend a lot," he sighs. He economizes by buying weekly Metrocards and trying to keep his expenses under $50 a week.
Ramos does have one advantage: He lives in public housing, just up the street from La Puerta de Vitalidad. Last year, because of how little money he made, the Housing Authority knocked his rent down from $435 to $180 a month. A friend of his, another construction worker, wasn't so lucky--he had to sell his belongings and go into a city shelter.
Until recently, the city's building trades unions regarded affordable housing as beneath them. Some even described it as "cockroach work"--dirty, dangerous rehab jobs too small to be worth the trouble.
A couple of years ago, however, they realized that affordable housing was becoming a big business. The city Department of Housing Preservation and Development and private partners had embarked on major mixed-use redevelopment programs. Suddenly, developers could get affordable housing dollars to do big, well-capitalized retail developments with condominiums--and a lot of it was being done with nonunion labor.
But it was too late. The unions had priced themselves way, way out of the affordable housing market. For the Carpenters, union scale is $37.36 an hour plus $24.91 in benefits--eight times what Campos was getting. Now Chambers and his counterparts in other building trades unions are going from job to job, worker to worker, trying to recapture the market. "They've gone from little nickel-and-dime rehabs to major, major, major apartment buildings," says Byron Schuler, of the United Brotherhood of Carpenters, tooling around Harlem in the union's silver Durango. "And what you see is just the subjugation of the community, complete and total--where you empower the buildings, but you don't empower the community."
A foster child from Pittsburgh who grew up on welfare, Schuler went on to attend Columbia University. Equally likely to quote from the Bible or Marvin Gaye, he keeps tapes of Malcolm X speeches and "The 22 Immutable Laws of Marketing" inside his car. Whenever he sees a group of workers shaping up, he stops to talk. A persuasive pitchman--he sells Amway products on the side--he often convinces them to enter the Carpenters' excellent apprenticeship program, especially if they're unemployed.
But while everybody wants a union card, convincing workers already on a job to unionize is another matter entirely. It's risky, for one thing: Workers frequently get fired for talking to an organizer. But the real problem is that the unions, particularly the carpenters union, have lost a lot of credibility in minority neighborhoods.
Not long ago, many of the city's larger building trades unions were openly in bed with organized crime. Corruption and favoritism ran rampant; shop stewards would take a few bucks to look the other way while crooked contractors paid immigrant laborers far below union rates and still billed the developer at union scale. Though favoritism and unfair hiring practices have been a constant complaint from reformers of all colors, many minority workers believe that it falls most heavily on them.
In the 1990s, a series of high-profile racketeering cases forced the unions to start cleaning up their act. This is when Schuler and Chambers, part of a new generation of minority rank-and-filers, got hired. "Some of these unions, eight years ago, were anywhere from 90 to 92, 93 percent Irish and Italian," says Chambers. "But if you look at them now--for example, the Laborers--it's approximately two thirds nonwhite."
The Carpenters have gone through a similar transformation. But they still have their problems: The union's executive secretary treasurer was indicted in 2000 for allegedly taking bribes to allow nonunion labor (the indictment was still pending as this article went to press).
Even with the passage of time, many of the rank-and-file members won't really trust the union until it changes its hiring practices. Today, the union has two kinds of members: "company men" and "local men" (they're not all men, but the phrase is still used--to the chagrin of the 200-plus "Sisters in the Brotherhood"). If you're a company man, you'll have work for as long as a particular employer hires you. The roster of company men remains disproportionately white.
Local men get hired either by shaping jobs or from a massive list of unemployed workers. For every company man a contractor hires, it's supposed to hire one person from the out-of-work list. The process is monitored by the federal authorities, and union officials say the monitoring has been effective. But it's a common belief among minority members that the hiring is not happening.
Knowing this, nonunion workers fear that if they vote to unionize their workplace, they will end up on the out-of-work list, and their jobs will go to white members. "When the job turns union, there isn't anything in it for us, and that's a fact," says Steve Roy, a union carpenter for six years. "And I can get 10 guys to verify this, and even more. You know how many black guys are outta work right now? And if you go on the job and look, tell me what shade you see. I ain't trying to be racist, but what I'm saying, the truth speaks for itself."
On 148th Street and Frederick Douglass Boulevard, construction workers come and go inside hollow buildings, surrounded by scaffolding and dust. On each corner, just feet from where they are hauling in drywall and lumber, other men stand glowering with sandwich boards that declare "this company does not hire union carpenters." Here in the Bradhurst Urban Renewal Area, where an entire block and a half is going through gut rehab, Byron Schuler and Shamsuddin Riza are struggling for the soul of Harlem.
"You up to your old business?" asks Riza with a broad grin, walking up slowly, several men following behind him, when Schuler pulls up in his SUV. Last summer, Schuler tried to unionize the workers on the 148th Street project, where Riza is a subcontractor.
"No, we're using new tactics now," replies Schuler.
"Listen, I want you to come up to the house--neutral ground," says Riza, still trying to be genial, inviting Schuler up to his family home in Albany. "It's caucus time, so I know you'll be up there," he adds heartily, referring to the state legislature's Black and Hispanic Caucus.
"You'll see me up there," says Schuler grimly.
"Don't say you're gonna come up and not come up, now," Riza says, his veneer of friendly joshing beginning to wear thin. "Don't start something, now." Moving closer, he tries to peer inside the car.
"You'll see me," repeats Schuler. "When you don't see me, that's when you should worry." And he drives away.
As a major Harlem subcontractor, Shamsuddin Riza is a construction industry success story. Riza comes out of New York's tradition of construction coalitions, roving groups of men, half community organizing group and half gang, that pressured local developers to hire them. Some, like Harlem Fight Back--where Lavon Chambers started out--use nonviolent methods, like pickets and sit-ins. Others use more threatening methods.
At one time, that's how Riza operated: In the mid-1990s, he served five years in a federal penitentiary for shaking down contractors on Harlem construction sites. Riza was trying to get money, but he also wanted jobs; according to Riza's 1992 indictment, he and three other men extorted contractors, with threats, assaults and even gunshots fired at their feet, to hire local workers.
After serving his time, Riza decided to become a legitimate subcontractor. Riza is now spoken of highly by developers, community members and even some union organizers. Recently, he completed a rehab job for Artimus Construction, a developer of affordable housing in Harlem and Washington Heights. "He handled the entire job, not just the hard demo," says Artimus principal Robert Ezrapour with pride. "First time a locally based organization, a contractor in this case, was able to do soup to nuts."
Since 1987, the city has poured more than a billion development dollars into Harlem, producing 40,000 units of housing. Subcontractors like Riza have been enormously successful in getting Harlem residents hired to rebuild their own neighborhood. But hiring local minority subcontractors is not necessarily a guarantee of good jobs.
In the mid-1990s, Harlem Congregations for Community Improvement (HCCI), a consortium of religious institutions involved in community development, tried to do its own housing construction. The group formed a subsidiary, Consortium for Central Harlem Development, that would develop affordable housing, and in the process incubate small, neighborhood-based minority contractors, teaching them how to run a business, giving them office space and helping them get loans. But the arrangement fell apart, and now HCCI is in the uncomfortable position of seeing a lot of those same local subcontractors working on somebody else's job, often for very low wages.
"The pay scale is just not adequate at the entry level positions for many of the jobs that are not union," says Greg Watson, HCCI's vice president for real estate. "It's very low, and the work is very hard. There are varying opinions as to why those wages are low. Subcontractors will maintain that they're forced to pay wages that are low because they are forced to enter into contracts that do not support a higher salary."
Andrell Padgett learned that the hard way last year. Padgett helped rehab a six-floor apartment building at 218 West 148th Street. The rehab was a joint project between HCCI and L&M Equity Participants, a private developer that is doing a lot of work in Harlem. The subcontractor, Simone Peele, bid $36,000 to do everything: from framing to Sheetrocking and installing doors and kitchen cabinets on all six floors.
Though there are multiple accounts of what happened next, there's no question the job went wrong. According to Peele, on November 14, with four and a half out of the six floors finished, L&M paid her about half the money and kicked her off the job. Peele concedes her crew messed up--they forgot to use double Sheetrock in some cases, and didn't brace the ceiling correctly in another--but points out that her crew came in and worked overtime to fix the job.
Padgett says he and four other men ended up working for less than minimum wage--about a hundred dollars a week, cash. Peele says it was more like a hundred a day, but admits that she did have to lump out the job. The problem, she maintains, was that she bid too low, desperate for work in the post--September 11 economy. "Where did she get off putting in a crazy bid like that--and where did they get off taking it?" agrees a contractor who asked not to be named. "They must be nuts."
Before negotiating with L&M, says Peele, her bid was closer to $50,000. "Your bid can be perfect--where you get enough money to take care of your guys, and get your workmen's comp," she says. "But when you get in that room with those people, they always have a way of talking you down. But you take it, so you can prove yourself, and hopefully get more work."
In this case, it backfired. "If she wanted the job, she was forced to bid low," says Watson. "And then when they bid low, you have to bring people on the site who are not making money, and who maybe don't even have the skill set to complete the jobs."
Lavon Chambers says Peele's predicament is common for minority subcontractors. "You get a bunch of hungry people in a room who are desperate, hungry for scraps, and they end up going lower and lower," he says. "By the time the person walks out of there, he or she has nothing to offer the worker. This is affordable housing, right? It's the only area where there's no low mark. And when the bid comes in, there's nobody to take the responsibility and say, 'Hey, you know this number that you put in? Mathematically, it's not possible for this to work.'"
Ron Moelis, a principal of L&M, says Peele's bid was based on normal unit-pricing standards, and points out that she signed a waiver agreeing that she had only finished about half the job. "If you're asking me if her particular bid for those six units was a good bid or not, I don't know," he says. "It's capitalism, I guess--and all we can do is give people a chance. Sometimes it works, sometimes it doesn't.... But I think that the opportunity is there, and if someone really wants it, they can make it work. It's not an easy business."
Back to the bottom line. No one knows whether it's even possible to construct affordable housing and do justice to the men and women who build it. Are the budgets for affordable housing construction simply too low? Or would closer oversight of contractors and their practices help ensure that workers get their fair share?
Several local unions and one community group are now trying to find out. In early February, Brad Lander of Fifth Avenue Committee held a meeting with four building trades unions--the Carpenters, Laborers, Painters and Plumbers. Though the discussions are still preliminary, they are hoping to collaborate on a new affordable housing project that Fifth Avenue Committee is developing, the $13 million dollar Red Hook Homes.
FAC has agreed to build the project using union labor. In exchange, the unions have agreed to hire local members from Park Slope and Red Hook. The four unions Lander is negotiating with have also agreed to discounted pay rates--up to perhaps 30 percent less than their usual scale.
It's those special pay rates that could make or break the deal. Privately, many building trades officials will admit that offering lower rates is key to getting a share of the affordable housing market. Some unions even call it a "market recapture rate." That they're offering it means they recognize there's only so much they can do by talking to the workers. Of the 600-odd contractors that the Carpenters have organized in the past three years, only about 50 of those have been through "bottom-up organizing"--convincing workers to risk their jobs by voting to join a union. To really