In 2012 California’s construction industry took in a respectable $152 billion, employed nearly a million workers and is now projected to grow 26 percent by 2020. But according to a recently released report, a pall is threatening to settle over this otherwise bright horizon. Sinking Underground: The Growing Informal Economy in California Construction identifies an ever-expanding segment of workers in the industry who are not reported by their employers or are misclassified as independent contractors—characteristics of the “informal economy,” or what is more commonly referred to as an underground economy.
The study’s disturbing research suggests that informal construction, which benefits the state’s unscrupulous labor brokers and contractors, and the real estate developers who hire them, is partly responsible for the hollowing out of California’s middle class.
Sinking Underground was conducted by the Economic Roundtable and tracked labor statistics from 1972 to 2012.