The Home Depot parking lot labor economy at heart of Trump's ICE immigration battle

CNBC

4 hours ago

Home improvement store parking lots were once teeming with aspiring laborers looking for a day's work. Contractors needing temporary help would swing by and scoop up a few workers for the day, and a symbiotic ecosystem thrived. Workers could snag a day's pay, and contractors could get cheap, temporary help without all the paperwork.
Since President Trump was reelected, labor experts have warned of unpredictable outcomes for sectors dependent on immigrant labor, including construction and residential housing. The recent Immigration and Customs Enforcement raids in Los Angeles area Home Depot store parking lots sparked protests and put a nationwide pall over the day laborer community. But beyond the deployment of troops and political finger-pointing, labor experts say that the Home Depot parking lot sweeps could have wide-ranging effects on whether critical work in the U.S. gets done.
George Carrillo, CEO of the Hispanic Construction Council, estimates there are tens of thousands of "parking lot day laborers" across the country and that the recent ICE raids will have a chilling effect that ripples through the entire economy.
"We have members reaching out to us seeing what they should do; they are scared," Carrillo said.
The practice of workers gathering in home improvement store parking lots to seek employment is a longstanding part of the labor landscape and many of these workers come from Latin American countries, including Mexico, Guatemala, Honduras, and El Salvador, which are among the countries targeted by the Trump administration's tightening immigration policies.
"They are trying to earn a living and have a tough decision to make: pop my head out and get deported or don't and can't support my family," Carrillo said. Carrillo says he is hearing more and more reports of ICE raids targeting construction sites where whole groups of workers are rounded up.
The day laborer crackdown will exacerbate an already tenuous labor market in the U.S. The Hispanic Construction Council estimates a nationwide construction workforce shortage of 500,000 workers. Carrillo says that construction projects were 14% behind schedule when Trump took office, but that has now risen to 22% as deportations and immigration enforcement have thinned out the construction labor market.
"We are getting farther behind on projects, and we are seeing across the country wherever there is a crackdown, people are not showing up for work," Carrillo said. Day laborers are not the workers on massive construction projects, more likely to be picked up by subcontractors who need help painting or reframing closets. But he added, "If the smaller subcontractor can't get those jobs done, it has a ripple effect throughout the construction industry."
Jason Greer, a labor consultant and founder and CEO of Greer consulting, says that the crackdown is causing a slowdown in construction due to a shortage in labor. "Day laborers are scared to death to show up at places like Lowes, Home Depot, etc. because they do not want to be arrested by ICE," he said.
While ICE has not commented directly on the Home Depot raids, they told the Los Angeles NBC affiliate "U.S. Immigration and Customs Enforcement officers and agents are on the streets every day, prioritizing public safety by locating, arresting, and removing criminal alien offenders and immigration violators from our neighborhoods," ICE's statement read. "All aliens in violation of U.S. immigration law may be subject to arrest, detention and if found removable by final order, removed from the U.S.
Home Depot tells CNBC while it does not allow laborers to sell their services on the premises, they are also not involved in any ICE operations.
"Like many businesses, we have a longstanding no-solicitation policy, which prohibits anybody from selling goods or services on our property," said a Home Depot spokesperson.
"I'd also add that we aren't notified when ICE activity is going to happen, and we aren't involved in the operations. We instruct associates to report the incident immediately and not to engage in the activity for their safety. If associates feel uncomfortable after witnessing ICE activity, we offer them the option to go home for the rest of the day, with pay," the Home Depot spokesperson said.
Lowe's and Menards did not respond to requests for comment.
Rick Hermanns, CEO of staffing agency HireQuest, which places 70,000 workers from the C-suite all the way down to day workers, says the upstream effects from crackdowns on day laborers are complicated and enormous, and neither political party has solved the problem.
Lax enforcement, Hermanns said, incentivizes people to directly or indirectly hire unauthorized workers, creating a two-tiered system where some workers are paid under the table while companies like HireQuest and others pay the requisite workers' compensation and social security. Hermanns says those mandated expenses make up at least 20% of the wages paid, so under-the-table day laborers create a competitive disadvantage. However, Hermanns said a crackdown like the one happening now also creates complications because it reduces an already thin labor pool, which forces wages higher and then spreads throughout the economy in the form of inflation.
"The ripple effects are much deeper and broader than what anyone understands," Hermanns said. "Candidly to me, our entire political establishment is unserious about looking at all of the effects," he added.
Higher wages can be good because they draw people into the labor pool who might otherwise sit at home. "But moving the foundational wage 20 percent higher is incredibly bad for inflation," Hermanns said.
For businesses, Hermanns says the whiplash between the administrative approaches breeds uncertainty. "I'd rather have more lax or more strict; the uncertainty is worse. What needs to be done is for people from both camps to come together and realize what we have is unsustainable," he said.
Atlanta-based immigration attorney Loren Locke says that the current sweeps of home improvement store parking lots are doing nothing to solve the country's complicated immigration situation. Locke noted that while day laborers who gather at home improvement store parking lots skew heavily toward immigrants and disproportionately lack U.S. work authorization, there is no reason to think the population is a good source of dangerous criminal immigrants.
"Rather, they seem more like easy pickings for ICE to hit daily arrest quotas," Locke said.
She points to the complex web of immigration programs that have evolved over the years, creating an unsustainable system.
"We are in such a mess right now because there are millions of workers in the U.S. who are in this gray immigration status," Locke said. "They were allowed in, and now we are going back to treating them like they are all criminals who need to be deported immediately."
Locke pointed out that there are children who were bestowed DACA status and are now grandparents.
"This has not been fixed for their entire adult life," Locke said.
Meanwhile, contractors and subcontractors throughout the construction food chain are finding a small labor pool heading into the summer season.