Bill on the right, Jr. Jesus on the left. Pete is Bill’s dog (female – go figure) and she’s laying on her back basking in the sun just out of camera range. She’s done taunting Jack (Mr.Goober Eyes) for a little while, at least, and enjoying our Indian Summer.
Bill is a FOE (Friend of Eric), and part of the underground construction economy that I have been fortunate enough to tap into. Eric, the titular ringleader, is another story altogether and I’ll tell his fable another time. But in the up times, Eric and his Merry Pranksters always found a way to get your side projects completed, and done well, when it was impossible to find labor or get a contractor to look at your project. In these down times, he is a lifeline for tradesmen on the edge. So when I needed to replace my corral fencing (to the delight of the HOA), a quick call to Eric brought Bill, Pete and Jr. Jesus into my life.
In another life (say 2 years ago), Bill was running crews framing the homes some of you may live in. He’s got over 30 years of field work under his belt, knows how to build, and is not shy telling you all about it. Hey, I’ve got those same 30 years of experience on the "white collar" end of construction, and he just SCHOOLED me on how to build something as deceptively simple as a fence.
The buyer’s stopped buying, the builder’s stopped building, and Bill along with thousands of other "Biils" were left without work. We have all seen how painfully long this real estate downturn has been, so 6 months of unemployment benefits ended a long time ago for these guys. Bill had the occasional job from the FOE network and other clients, and was lucky enough to have a caretaker sort of role on a house in the NW, so at least he had a roof over his head and a place for Pete to call home. A couple of week ago, the miraculous (for the owner) and the unthinkable (for Bill and Pete) occurred – the house actually sold in this market. So they are living out of Bill’s truck right now, with an occasional sleep over at friends who have room or a FOE that is playing it back.
The Trades are a rare beast. They are resilient, have networks that boggle the mind, have lived through this all before, and have survival instincts that rival the cockroach. The first check (strike that, cash payment) each month isn’t for lodging or food, or the F-250, it is for the storage unit that holds their tools. The second is for their cell phone – their lifeline to the world, their peers, their clients, and suppliers. Around 3 PM every afternoon, the cells all start ringing to set up the rendezvous at their storage units to swap tools for the next day’s work. It takes a village, and these guys hang together.
This dominion is an all cash world. I didn’t get it 3 years ago when Eric himself rebuilt my deck, and I wrote him checks. He would have to go down to the bank of origin to convert it to untraceable cash instantly. Then Jesus the laborer on the crew who did all the big-time lifting on my deck rehab, could get paid by Eric. (the grunt on the fence project is deck Jesus’ son, ergo Jr. Jesus, and a new addition to the FOEs). I’m the sort of guy who feels guilty banging the ATM for $200, so I felt like a drug dealer going into First Independent Bank for cash draws in the $1000s for Bill. Not a nod, not a wink at the bank – this is standard business operations for them. I’m pretty naive sometimes.
So I have 600 feet of kick-ass fences with nearly invisible gates and a happy HOA, and a little money left over for the next project. Bob across the street liked what he saw, and hired Bill and Jr. Jesus to rebuild his decks. Pete remembers exactly when biscuit time is for Mr. Goober Eyes and visits us daily for treats.
Winter is coming upon us quickly now, and I really hope that Bill and Pete and Jr. Jesus and all the other FOEs will make it through safe, warm and healthy. I wish I could do the I Dream of Jeannie arm cross, nod and make it all OK for our tradesmen stuck in our current economy. But I’m no Barbara Eden, so I just support them whenever and however I can. You should, too.
Ralston
Thanks for the heartfelt tribute to the tax evaders. I am sure you will abide by the law and 1099 these men for all sums paid by you in excess of $600, right Mike? Surely, you Mike, won’t break the law.
Times are tough for whole a lot more of us than just the trade workers. But some of us have this silly notion that we ought to be law abiding. Guess that’s just naive, huh Mike? Hell, maybe we should all just become non-filers like these heroes.
Yes, let’s just rely on the honest idiots who pay their taxes to provide for our basic government services.
And please spare me the violin music and sob stories about how tough it is Jesus Jr.
Roger
Sorry Mike, but I have to agree with Ralston. Yes we all know times are tough in the construction business. But times are tough for many businesses. My neighbor’s family owned ice cream shop just went out of business last week. I’m sure he would have loved to be able to beat the system by getting paid under the table for his product and stiff the taxman. He might still be in business if he didn’t have to pay those pesky taxes.
Why should a tradesman be able to avoid paying taxes just because he is a tradesman? Should a merchant be able to aviod paying taxes also? How about a bartender? A chef? A nurse?
Your concern for these men is admirable. But your support of tax evasion is off base.
BanteringBear
I’ve got a few friends in the trades (general contractors), so I’m not too quick to bash the industry. But, I’m about sick and tired of the use of illegal alien labor, and all of the associated ills that go along with it. It’s just plain wrong. There’s but ONE reason contractors do it: greed. Pure, unfettered greed. Sickening. What many of these boneheads don’t realize is that they drove down their own wages in the process. Nice work guys! Where’s the enforcement?
Roverwhip
Hey Mike…..
If I give you the name and number of my boss would you be willing to convince him to pay me with hundred dollar bills? You know, this getting paid with a check and having my taxes deducted is a real pain in the ass……..
HarveyW
Mike I’m sure all the state licensed fence companies who pay employer taxes, workers comp. premiums, liability insurance, etc. who are struggling to keep their employees on the payroll are delighted to read about the local architect utilizing scabs. Interesting that you put this out on the net for all of us to see.
BanteringBear
“I am sure you will abide by the law and 1099 these men for all sums paid by you in excess of $600, right Mike? Surely, you Mike, won’t break the law.”
That’s not Mike’s responsibility. He hired a contractor, and paid a contractor. Now, if they’re NOT licensed, bonded, and insured, well then that’s a different story. In such case I would wonder why anyone would be foolish enough to go that route. All it would take is baby Jeebus to rupture a gas line, and BABOOOOOOM! Not worth it just to save a few bucks.
Wooten
Bear, you really think these guys are licensed by the Contractors Board? You think these guys are bonded or insured? Puh-lease.These guys sound like some of the out of work construction guys that are all over the place now. They undercut the licensed contractors because they can vanish without a trace. And yes, if Jesus Jr. ruptures a gas line, it’s Mike’s ass on the line. If Jesus Jr. manages to misfire the nailgun and puts a nail into Eric’s brain, there is no workers comp company to pay the medical bills. But I know a lawyer who could make the case that Mike, as the employer, is responsible for Jesus’ negligence. Your’e right, Bear. All to save a few bucks?
Carla
It’s probably a fair inference that guys living in a truck are not licensed, bonded, or insured. Nor are they declaring any income or paying any taxes. However, I’m sure they enjoy the clean water that comes out of the faucet at their friends house, and the food devoid of impurities they eat at the fast food joint, and the well maintained highways they travel to and from their under the table jobs. Clean water, safe food, good highways, why I guess these things just appear out of the blue. Certainly no need to contribute to the public purse that provides all these things.
Support them, Mike?
Not in a hundred years.
Derrick
Spare us the sob story mike, a lot of people are hurting right now, especially one that PAY TAXES!
your article makes me want to THROW UP. nevermind all these other so called self contractors who bid jobs down, only to not pay off the supplies to finish the job, so the helpless home-owners are stuck to pay the bill or have a lien thrown on their house, while these scumbags move on to the next unfortunate victim. And lets not even get started on the illegal labor.
disgusting Mike. pure garbage.
samm610
Wow….probably the most hateful bunch of responses I’ve ever read on this blog.
Reno never would have been built without these guys. I mean, are any of you going to leave the house long enough, tearing your face from the computer, to lift a hammer and build your own deck?? Seems to me like most of you are too busy shoving your opinions up each others rears to really look out and see that there are many different types of people out there that do what they have to do to make a living. I’d rather pay the guy cash for good hard labor and a beautiful deck than continue to watch the welfare cases next door pump out more kids and get everything for free, while I actually work and shell out $500 a month to cover my own kids’ healthcare.
There are much bigger issues out there than whether or not Joe Contractor paid taxes on his, well, menial income. Even if he were to recieve a paycheck, if he’s living in his car he’s hardly in the income bracket where what he contributes makes any sort of difference.
I truly hope that none of you ever lose your livelyhood and have to make any sort of sacrifices. Walk a mile in the FOE’s shoes before you bash Mike on his concern for others.
BanteringBear
samm610 posted:
“Reno never would have been built without these guys…there are many different types of people out there that do what they have to do to make a living.”
The current state of overbuilding is a horror, and has far more negatives than positives. If “doing what you have to do” means breaking the law, there’s a problem. Do you think anyone likes to pay taxes?
“I’d rather pay the guy cash for good hard labor and a beautiful deck than continue to watch the welfare cases next door pump out more kids and get everything for free, while I actually work and shell out $500 a month to cover my own kids’ healthcare.”
Oh, really?! Did you ever think for a moment that these are the sorts of individuals who are the welfare cases? How do you think the baby Jeebus’ of the world eat when they don’t do their slavemaster’s “grunt” work?
With all due respect, Mike deserves every bit of the flaming he’s getting. Whether he realizes it or not, he’s contributing to a few of the most serious problems this country faces which are declining wages and illegal labor (in the form of undocumented workers, or under the table workers). Now, I don’t know if baby Jeebus is undocumented, but that’s one of the problems with these sorts of shadow businesses- it’s hard to know what is going on.
While Mike gets to save a buck by stiffing the government and underpaying the workers, everybody loses. The workers don’t make a living wage, you and I get to foot the bill when somebody loses an eye on the job, and Mike gets sued. The taxpayers foot the bill for that action, too.
I do wonder if Mike, feeling that the services of these men aren’t worth what the job SHOULD cost, would be quick to discount his own work? I’d guess not. This is a problem which is pervasive in our society. Individuals like to use and abuse people for their own personal gain. This situation is no different than the national home builders employing cheap labor in the form of millions of illegal aliens in order to build the sea of homes which sits vacant. What they did is lower wages, and put true craftsmen out of business. I wonder how Mike would feel if teenagers from India started doing all of the architectural work for less than half of his current pay. Wake up America.
Mike
no matter which side of this debate one sides with, will you all please stop calling him baby Jeebus? That’s so racist. His name is Jesus, as in Hay-Soos. Not Jeez-us. And he’s not a baby.
samm610
wow Bantering, you were less harsh on me than I predicted.
I agree, that the building was out of control and set many folks up for this failure. I lived it during the boom working for a homebuilder until my own layoff in August 2008. Wow, what a wake up call it was for me – as the right hand to the principle owner, I thought I was safe. The fortunate thing for me is that I’m intelligent and people usually like me, so I was able to get a job right away and not sit on the dole like many of my counterparts.
I think that undocumented workers are not a good thing for the country – and I’m of Mexican heritage – and I don’t “like” that we support them by illegal practices of paying them under the table. But the reality is that at the end of the day, American’s want to save that dollar, and they, as a whole, will go with whatever is the cheapest.
I agree that America needs to wake up. I think we need to start taking care of each other. The posts following Mike’s blog were angry and it makes me weary that in all this talk of “change” by both Presidential candidates, at the ground level, we don’t like each other, really. You guys think it’s funny to write “Jeebus” and question his documentation. The man, he has a name and I’m sure it’s not Jeebus. Documented or not, he’s still a human being. And until we can recognize that being good to each other can actually work, this society will continue its downfall.
So…thanks BB, for not slamming me like a book on the floor, there’s hope for you after all. 😀
BanteringBear
Mike posted:
“no matter which side of this debate one sides with, will you all please stop calling him baby Jeebus? That’s so racist. His name is Jesus, as in Hay-Soos. Not Jeez-us. And he’s not a baby.”
Racist? What a pathetic attempt to use the race card. Please, please explain to me how referring to someone named Jr. Jesus, as baby Jeebus, is racist. I suppose if the subjects name was James Jr., and I called him little Jimmy, I’d be well out of line too? Give me a break!
The pronunciation of Jesus as “hay-soos” and not “jeez-us” is immaterial. The use of the name Jesus by the hispanic culture is done out of a deep reverence for their “Christ” Jesus. Yes, the same Jesus pronounced as “jeez-us” by those like myself who were raised catholic. Get a clue.
larry lowball
I understand that not reporting income is a crime, and, even in tough times, isn’t a good example, or offensive to the rest of us who troll and trudge off to jobs, which require paying at least 20 percent in tax, that may or may not be there someday–however, neither, our deputy Catholic savior, nor Mike, or the felonies they may have committee, strike me as coming close to the misdeeds of the the Unabomber or Idi Amin.
Isn’t about time we cut a few people some slack?
Inclinejj
This dominion is an all cash world. I didn’t get it 3 years ago when Eric himself rebuilt my deck, and I wrote him checks. He would have to go down to the bank of origin to convert it to untraceable cash instantly
Hmm even if the guy who got the check walked into a bank, or check cashing store..he would have to do some kind of id..bank account drivers license something..
The way to get untraceable income is to be paid in good old cash..no checks no paper trail
Irv
Some of you guys talk like you probably haven’t recently visited the motherland of all cash cultures, the San Fernando Valley of Los Angeles. Everything you want in the way of manual labor services and semi-skilled trades can be quickly bought for cash, no records and no taxes are paid. By a quick glance, it might seem like that helps the unfortuantes. But on a longer term basis, what is the result? The area becomes a magnet for more unfortunates seeking the same unreported daily cash work. They come in droves, and then, we see the inevitable outcome: (a) they get sick or injured, and having no insurance, they show up at our dwindling number of hospital emergency rooms—try waiting in line all night at an emergency room at a local hospital because these poor souls are in line ahead of you. Emergency rooms closing, hospitals begging local agencies for more public subsidies, all because of the overwhelming costs of uninsureds whom they must treat; (b) they have children, and those kids enroll in our L.A.U.S.D. schools, already burdened with over-crowding and a multitude of languages; now even more and more new students, a large number of which are the children of the cash culture parents, and those parents are not contributing a dime toward the costs of these schools; (c) low income public housing being forced into neighborhoods to make a place for these families, and who do you suppose is paying for that? The middle income taxpaying working familes, not the cash culture laborers.
The San Fernando Valley is becoming a third world community, largely due to these results which flow from a booming cash sub-culture which expands every year in its numbers. More burdens on local agencies every year, even on jails, as the unemployed and underpaid become desperate people who make bad choices.
Would you like Reno to become a northern version of Canoga Park? If so, then support the unreported cash sub-culture, and watch those numbers grow and the demands on your local services grow, and in a decade, you will be there.
Mike
Bantering Bear, stop living in the little elite microcosmic bubble you live in. I used to work in HR and can tell you with certainty if you called someone named Jesus ‘baby Jeebus’ in a work or professional environment, you’d be fired for harassment. so YOU get a clue. Calling someone named James Jimmy is entirely different.
DowntownMakeoverDude
This is really a tough subject to dive into. On one hand, I doubt under-the-table work, no matter what facet it is in, be it housekeeping or auto mechanics or underground construction crews, will ever totally disappear. I believe it will continue as long as there is demand for it, from people who continue to use their services regardless of tax law. It’s just like the drug trade; you won’t ever really stop it, unless the people doing drugs stop taking them. Just take a ride down to Galleti Way and you’ll see a ton of people standing by willing to work under the table. It’s widely known these people are available, I have seen quite a few commercial-labeled trucks pick up these workers, yet there is no enforcement, no sting operation, even though law enforcement knows perfectly well it goes on. Maybe they don’t care? Maybe it’s not a priority? Maybe they can’t do anything about it? Maybe it can’t be proven? What’s the answer?
Perhaps the question is, can we do anything about it? I don’t think so, because it’s something that is so hard to catch, and from a regulatory standpoint would require so much manpower to enforce. It would also require mass conscience change on society’s part. This is a good ole’ boy town, I have seen so many more examples of businesses willing to pay under the table for ‘contracted’ services like office cleaning, day labor, landscaping, even computer repair work etc here than in other places I have lived, mostly for the same reasons Mike used baby Jeebus. Is it right or wrong? I’ve never personally hired someone under the table, because I would be afraid if something went horrible with whatever service I got under the table, I wouldn’t have a leg to stand on in court to recoup any costs or damage, right?
Reno Ignoramus
Interesting conversation, proabably not anticipated by Mike.
Irv is quite accurate in his comment. My work used to take me to Italy on a regular basis. I believe that Naples, Italy, may have the largest underground economy of any city in the developed world. It is estimated that the underground economy, where everything is in cash, and only cash, and where tax evasion is regarded as a birthright, is larger than the legitimate economy. With what result? Naples in many basic ways resembles a third world city in a first world nation. Because the tax base is so woefully inadequate to provide even the most basic of public services, the social fabric of the city is always on a precarious ledge. When the “economy” is clandestine, law enforcement is unreliable. How can the police and the courts instill a sense of predictability when there are no records of who agreed to do what and for what price? The result is an edgy lawlessness for which the city is well known.
All of this may seem far removed from three guys in Reno gaming the system, with a wink and a nod from a sponsor of this blog. But it really is not hard to see where it all leads if you give it enough time. Naples has had a couple of centuries to perfect the underming of the social fabric. The San Fernando Valley maybe has had a couple of decades.
longerwalk
I have to join the bandwagon of folks who are saying, “Bad Idea, Mike.” I’ve done income taxes FOR FREE (right, as a volunteer) for almost 20 years for low-income populations. That includes illegals. (Remarkably enough, many pay taxes.) A couple things just frost me.
First, general contractors (or other high users of unschooled labor) calling their laborers ‘contractors’ to avoid paying social security & FICA taxes. The poor guys/gals who don’t know any better are toast come tax time, since they end up having to pay their own twice over, in addition to the income taxes all at once, since their ’employer’ didn’t bother to withhold that, either.
Next, it’s the people who take advantage of legitimate helping programs like the Earned Income Tax Credit, which gets abused when the taxpayer is getting the credit based on his/her documented income and is getting more under the table. Very unfair to all the rest of the law-abiding taxpayers! And to whoever indicated that the taxes these guys/gals pay would be small potatoes isn’t thinking in volume! I would add that some of them might be better off reporting, as they might qualify for programs to help them, too.
Other issues have been well noted above, including the fact that business owners and employers who do things above board just get screwed when you & I look for the street labor.
I, too, hope those at the bottom of the food chain can stay warm, dry & fed (and how to do that is a tough nut to crack) . . . but undercutting law-abiding citizens is not the way to do it. Save your money for the job done not only right, but legally and ethically.
BanteringBear
Mike posted:
“Bantering Bear, stop living in the little elite microcosmic bubble you live in. I used to work in HR and can tell you with certainty if you called someone named Jesus ‘baby Jeebus’ in a work or professional environment, you’d be fired for harassment. so YOU get a clue. Calling someone named James Jimmy is entirely different.”
Wasn’t it racism you were alleging? Oh I see, now that you realize you couldn’t make an argument to back that up, you’re grasping for workplace harassment?? Bwahahahahahaha! Thanks for the hearty laugh, Mike, whichever one you are.
MikeZ
Sigh. Why does every thread have to degenerate into petty squabbling?
And it’s always the same people.
DowntownMakeoverDude
I’m not sure if Mike M expected this much backlash or not, but kudos to you for sticking your neck out there and voicing your opinion, especially with the very straight-up-no-bull commenters that hang out on this blog. Changing the subject a bit, will the October numbers be out before the Nov 4. elections? Any predictions?
BanteringBear
While I might not agree with Mike’s choices, I don’t think he is inherently a bad person. I just believe that he, as well as many, many others, overlook the negative effects of this particular behavior.
I’d like to say that I do enjoy Mike’s posts, and though he got lit up a bit here, I hope it doesn’t discourage him from posting more disputatious nuggets in the future. Some like it hot. Mike’s got, in baby Jeebus’ words, cojones.
Mike McGonagle
First off, I appreciate the new voices that chose to respond to this post, and also the return of some people who haven’t been active on the board in a while. Though I didn’t expect to get “Angied” on this one, I value (most) of what you have to say – it is what a discussion is supposed to be about.
Many of the most vehement comments veered off in directions decidedly not addressed in my post, but toward issues you find important and I knew would come up on the blog at some point: Contractor ethics, illegal workforces, racism, predatory practices. For some time, I’ve trying to find a way to broach the subject of the disproportionate foreclosure rate in the Hispanic community, and the issues that may be driving it. These are things we need to be discussing, especially given the amount of raw rage exhibited in some of the comments.
Had I anticipated the direction y’all wanted to take the discussion, I could have been a lot more explicit on the specifics of my project. Jr. is an American citizen, and a Damonte Ranch High School grad. Bill and Jr. are both being paid far in excess of what they would make working for a Contractor right now. I am paying far less than Contractor pricing, and getting the services of experienced professionals instead of day laborers. 800.227.2600 Call Before You Dig is a great, free service to locate underground utilities and I highly recommend them. Homeowners insurance rocks. An owner-builder of a non-permit project is not considered an employer and can pay for services in any way mutually agreeable between the parties, be it cash, check or Green Stamps without 1099 reporting responsibilities. Tax reporting and liabilities are the responsibility of the payee. Would you 1099 the neighbor’s kid who mows your lawn during the summer?
I have absolutely no qualms whatsoever about my actions on the fence building transaction. Many of you will obviously disagree, and I’m fine with that.
Can I at least get a little credit for making derrick blow chunks?
BanteringBear
“For some time, I’ve trying to find a way to broach the subject of the disproportionate foreclosure rate in the Hispanic community, and the issues that may be driving it.”
I think there are a few drivers. First and foremost, Hispanics were intentionally steered towards toxic mortgages. Many of them, especially those who don’t speak English fluently, could not even begin to understand the terms of these loans. They were victims of predatory lending, as well as their own naivete.
Secondly, they generally earn less, at least from what I’ve read. And, those who earn less, are the first to run into trouble making their bills, especially in these tough times. Furthermore, the building industry was a big employer of Hispanics, and as those jobs have disappeared, so has their ability to make ends meet.
It’s nice to hear that Jesus is an American citizen. At his young age, he should go to college. There are grants and other forms of financial aid he could take advantage of.
“An owner-builder of a non-permit project is not considered an employer and can pay for services in any way mutually agreeable between the parties, be it cash, check or Green Stamps without 1099 reporting responsibilities.”
Good to see you did your homework. I somehow suspected you had your bases covered, being such a public forum and all. I’d like to offer my sincerest apologies for any incorrect assumptions I may have made. The illegal labor issue is a real hot button topic for me. I’m glad to hear that everything was on the up and up.
MikeZ
Can I at least get a little credit for making derrick blow chunks?
Sure! But crude dropping to $70 after he dumped it all at $95 probably had a lot more to do with the nausea.
Inclinejj
Hispanics where lead to high cost mortgages?
Well, Yes there where alot of snake oil salesmen in the loan business who dumped everyone into the loan that got them the highest rebate and points..
Lots of loan people preyed upon people of their own race..
I wonder how them people are doing right now? Probably asking if they want fries with that burger
Hmm lets see. Our best year a few years ago we closed from a high of 64 to a monthly low of 23 loans on the year..So in the 350+ loans we closed..95% where 15 & 30 year fixed..
A file would come in and we would look at loan to value, credit, income.
Probably why the fast buck artists are out of the business right now and our doors are still open
Also I can pass for Hispanic but I am not, But I am also really lucky I went to a great local bank and got a 10 year fixed for 5.0%
So these people who did signed on for the high rate high rebate loans, could have walked away from the table..why would you take a loan you knew you couldn’t afford???? I know you can get some really dim bulb borrowers but you can flip on the tv..look in the paper and put in two minutes of an effort asking what the going rate was..
20 years in the lending business and I have never heard a borrower made to sign on his loan docs at gun point?
People have prayed upon stupid and the weak and meak from the begining of time..
Caveat emptor: Let the buyer beware
Derrick
hardly Mikez.. 40% profit in less than 2 months makes me look like a genius. too bad you were too busy bad mouthing my call on oil.
dipstick!
Tony Sena
It’s unfortunate that many in the real estate industry are feeling the pinch right now! Education is taking the biggest and the CCSD is being asked to cut another $120 million from their budget for each of the next two school years, 2009-2010 and 2010-2011. So any tax revenue right now, no matter how little is definitely needed!