Informal economy rocked by pandemic
By Sara Sanchez/El Paso Inc.
Here on the U.S.-Mexico border, El Paso’s informal economy, made up of workers who cross to the United States every day to do everything from cut lawns to work in construction, is usually a vibrant one.
Because much of the informal economy operates in gray areas, there is no official number of businesses or individuals that hire day laborers, how many of these workers cross into the country each day, how they are paid or where they spend their money.
Yet El Paso’s informal economy may be among its most vulnerable during the pandemic. It was hit especially hard by the border restrictions put in place a year ago to slow the spread of the coronavirus, leading to some labor shortages and forcing some businesses to adapt.
“It is difficult to track, because everyone’s paid differently, and roles are different,” said Cindy Ramos-Davidson, CEO of the El Paso Hispanic Chamber of Commerce. “Sometimes many do child care as well. Some live with the (employers). You don’t know what the employer is doing, how they’re paying, if they’re filing.
“It’s a challenge for someone to even come up with a concept of how much money and people are out there.”
It’s unclear how fewer day laborers have impacted the businesses that hire them. Many businesses do not want to discuss the sensitive topic for fear of penalty or retribution.
Similarly, families who hire these workers do not want to risk losing their employees.
Ramos-Davidson said she asked the chamber’s employees about how they’ve been impacted by fewer border crossings and day laborers, and the answers show the difficult choices some workers have had to make.
She said one of the chamber’s board members has a worker from Juárez who regularly cleans their yard, but that the worker is not able to cross freely because he does not have the right documentation.
Instead, Ramos-Davidson said, the worker lives at a group hostel in southern New Mexico and commutes to El Paso to clean yards.
Another chamber employee has a house cleaner who lives with a sister in a rural part of El Paso County, but the worker has not been able to see their family in Mexico for a year.
“It’s a hard humanities thing to deal with, and shows the tenacity, perseverance and deep-rooted drive to make a living that people will go through to make a dollar,” Ramos-Davidson said.
One El Paso business owner, who asked not to be named, said the border crossing restrictions had impacted her business, which often works with subcontractors on home-building projects.
She said there are many workers in El Paso’s construction industry who live in Juárez and cross the border to work each day.
“When the borders were initially semi-closed and it was taking longer for people to come across the border, that definitely affected some of our subcontractors in terms of showing up to work,” the business owner said. “Most of the subcontractors that work with us, all of their employees are documented workers. I don’t know that many hire day laborers.”
Although the construction industry has been able to keep bringing over workers with special permission, Ramos-Davidson said the talent pool has been impacted by fewer of these workers in El Paso.
“They’d come from Juárez, hope a construction company would hire them to dig a ditch or something like that,” Ramos-Davidson said. “That talent pool has also been a challenge. The construction industry has been slammed in demand for skilled labor.”
There could also be labor shortages for upcoming crop harvests, even though much of the region’s large-scale farming is done by machines.
“It’s a cyclical process that all this chaos created,” Ramos-Davidson said. “People just want to make a living to feed their families and take care of their responsibilities. The upside is that we have such strength, determination and tenacity.”
Since border restrictions were put in place, some workers in certain industries have had permission to cross over to work each day. Industries that have been deemed “essential” by local and state governments, like construction, are allowed to bring over their laborers.
But if an individual does not have the right documentation, there are currently limited opportunities to cross into El Paso to work.
Jesus Canas, a business economist with the Federal Reserve Bank of Dallas, said employment in El Paso fell by 4.3% from December 2019 to December 2020, while the state of Texas’ employment fell by 4.5% in the same time period.
“With the pandemic, and restrictions for border crossings, I saw something that I wasn’t expecting,” Canas said. “I was expecting more negative impacts on the U.S. side, with high employment losses and higher losses in retail sales. But so far we’re not seeing that from the official data.”
Retail sales fell slightly in El Paso as well from 2019 to 2020, but Canas said it wasn’t as dramatic as he had expected.
Canas said preliminary sales tax refund data from the Texas Comptroller show a drop of 0.5%, but that the rest of the state has dropped by 5.1%.
He said the big question is now why El Paso’s numbers didn’t fall as much as expected.
“With employment we saw fall, it’s hard to know how much of that is due to the pandemic and due to day laborers not crossing back and forth from Juárez into El Paso,” Canas said. “Retail sales were almost flat in 2019, but we don’t know if it was due to the pandemic or because you didn’t have these daily crossers.”
It’s also difficult to track how fewer day laborers impact businesses closest to the border in Downtown El Paso.
A year ago, that retail component of Downtown was thriving with business from border crossers and El Pasoans.
Today, businesses are trying to claw back as state and local coronavirus mandates have been scaled back. With some employees unable to cross the border, that has forced businesses to adapt.
“Many businesses have had to revamp and retool,” Ramos-Davidson said. “Some are taking products to the flea markets on the weekends. Some keep one family in the business while the others go to flea markets. Some have no employees and are just running it by themselves.”
Cover photo: Day laborers hopeful for work sometimes congregate at Paisano and Oregon, but the corner has been mostly empty since the border was closed. Photo by Jorge Salgado/El Paso Inc.