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Construction

Report: 10% of Iowa Construction Workers Underpaid Due to 'Underground Economy'

2024-12-10

A new study has brought to light a concerning trend within Iowa's construction industry. It suggests that as many as 10% of construction workers have been unjustly underpaid. Sean Finn, the author of the report for Common Good Iowa, addressed reporters during an online news conference. He stated, "The practice we're seeing is that employers are wrongly classifying their employees as independent contractors to avoid paying taxes and fulfilling employer responsibilities like workers' comp and unemployment."

Underground Economy in Construction

Approximately 5% of Iowa's employed population works in construction. While many construction workers earn fair wages and benefits, the report reveals the emergence of an underground economy. Finn explained, "A significant amount of public money goes into infrastructure projects. In most cases, the lowest bidder secures the contract. These low bidders often consist of non-local construction contractors who engage in illegal employment practices with little enforcement."

This situation not only affects individual workers but also has implications for the state's infrastructure development. Billions of dollars are set to flow into the construction industry in the next decade due to federal programs. However, the complex web of general contractors and sub-contractors makes it challenging to hold bad actors accountable.

Financial Implications

Illegally classifying someone as an independent contractor provides businesses with significant savings. Finn pointed out that it saves about $6000 annually in fringe benefits and an additional $6000 in Social Security and Medicare taxes. Misclassified independent contractors are also ineligible for unemployment benefits if they are laid off. Finn gave an example, "Workers who face extreme medical debt due to injuries on the job site while misclassified as independent contractors have no workers' comp coverage."

This financial burden falls directly on the workers, leaving them vulnerable and struggling to make ends meet. It is a clear case of exploitation within the industry.

Recommendations for Legislation

Common Good Iowa is advocating for Iowa legislators to update the state's wage payment collection law. Currently, the state employs only four investigators to oversee wage payment collection for a workforce of 1.6 million. Finn emphasized, "This is clearly not enough. More staff could not only investigate businesses evading labor laws and taxes but also educate Iowa employers about the correct business practices."

A 2022 report from Common Good Iowa showed that Iowa workers lost $900 million in wages due to fraud. By strengthening the law and increasing enforcement, the aim is to protect workers and ensure fair compensation.

In Kitsap County, Washington, a significant incident took place back in August. A man is now in custody, connected to the "extensive damage" left at a construction site. The Kitsap County Sheriff’s Office made an announcement on Tuesday, revealing that deputies had arrested the suspect. This individual is alleged to have caused more than $1 million in damage and delays to the construction project.

Unraveling the Mystery of the Kitsap County Construction Site Vandalism

Location and Incident Details

The incident occurred on Newberry Hill Road and Sesame Street Northwest in Silverdale. A retaining wall sustained significant structural damage, which led to a considerable delay in the Kitsap County Public Works’ project. It was evident that an individual had used heavy machinery to wreak havoc on the site and equipment.This kind of vandalism not only causes financial losses but also disrupts the progress of important public works projects. The impact of such actions can be felt not only by the construction company but also by the local community that relies on the timely completion of these projects.

Investigation and Arrest

The sheriff’s office’s two-and-a-half-month investigation was crucial in tracking down the suspect. Forensic evidence played a vital role in identifying and apprehending the culprit. With the help of the ProAct Team, the suspect was finally arrested and booked into jail on Tuesday. He will soon face charges for his actions.Such a detailed and extensive investigation showcases the commitment of the law enforcement agencies to bring justice and hold accountable those who cause harm to public and private properties.

Impact on the Community

Construction site vandalism not only affects the immediate construction project but also has a ripple effect on the surrounding community. Delays in public works projects can lead to inconvenience for residents, such as traffic disruptions and longer wait times for essential services.Moreover, the financial cost of repairing the damage can be substantial, which often comes out of the taxpayers' pockets. It is important to address such incidents promptly to minimize the impact on the community and ensure the safety and well-being of everyone.To get the best local news, weather and sports in Seattle for free, sign up for the daily FOX Seattle Newsletter. Download the free FOX LOCAL app for mobile in the Apple App Store or Google Play Store for live Seattle news, top stories, weather updates and more local and national coverage, plus 24/7 streaming coverage from across the nation.

Bush Construction has made a significant move by expanding its business reach to St. Louis. This acquisition of a Missouri-based real estate development company has opened up new opportunities and strengthened its position in the industry. The deal between Davenport-based Bush and Urban Improvement Conglomerate (UIC), a St. Louis-based firm, was announced on December 10th. It is an immediate acquisition, as stated by Bush company leaders.

Enhanced Services and Shared Vision

"This merger brings together two industry leaders with a shared vision of delivering exceptional projects. It seamlessly integrates innovative design, creative development, and a proven general construction process. Together, we are better able to serve our clients and meet their diverse needs," said A.J. Loss, president and CEO of Bush Construction. The acquisition allows Bush Construction to extend its services to the St. Louis market, providing comprehensive solutions to clients.

Operational Transition and Employee Integration

UIC will operate under the Bush Construction name moving forward. During the transition, ongoing contracts may still reference UIC as the companies work to align all operations under one unified brand. This ensures a smooth transition for clients and employees alike. The merged company will have more than 75 employees, with seven team members based in the St. Louis office. The Quad Cities home office will serve both markets, facilitating seamless collaboration between the two locations.

Strengthened Leadership Team

An affiliate of McCarthy-Bush Corporation, Bush Construction is a commercial construction company offering an integrated approach. Under the new structure, Brent Crittenden will serve as director of development at Bush Construction, and Sarah Gibson will assume the role of director of design in St. Louis. Several other key members of the UIC team will also be joining Bush Construction. Additionally, Ryan Welborn, a longtime Bush employee, has been promoted to vice president of construction, overseeing all construction operations in both markets. This leadership team brings together diverse expertise and experience.

Commitment to Community

Bush Construction and UIC share a common commitment to community building and development. This acquisition will enable both companies to continue delivering high-quality projects across the Midwest that positively impact the communities they serve. "Our merger signifies a commitment to delivering a better construction experience. By uniting our strengths, we are poised to set new standards of excellence and drive innovation in every project we undertake," said Mr. Loss.