Full Citation
Title: An Empirical Methodology to Estimate the Incidence and Costs of Payroll Fraud in the Construction Industry
Citation Type: Miscellaneous
Publication Year: 2020
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Abstract: For decades, the American construction industry has represented a viable pathway for non-college educated workers to develop employable skills and secure the types of blue-collar, middle-class jobs that have been the backbone of families and communities around the country. Many corners of the construction industry feature some of the best labor practices in the American economy, including family-supporting wages and benefits, fully funded worker education and training programs, and joint labor-management cooperation. But these progressive workplace practices are hardly uniform. In stark contrast, other corners of the construction sector feature some of the worst labor practices in the United States: meager wages, no benefits, unsafe working conditions, wage theft, and payroll fraud. These unethical and illegal labor practices are largely the result of construction employers’ single-minded pursuit of reducing labor costs. This has a cascade of effects. Most directly, these actions degrade the standard of living for workers in those jobs. But they also make it difficult, if not impossible, for honest and law-abiding contractors to remain in operation in a market where they must compete against firms with significantly lower costs. The exit of honest employers further degrades industry working conditions, leading to a “race to the bottom” that represents an existential threat to fair-minded employers and workers whose best practices have helped build the American economy and its blue-collar middle class
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Authors: Ormiston, Russell; Belman, Dale; Erlich, Mark
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Data Collections: IPUMS USA
Topics: Labor Force and Occupational Structure, Other
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