PhillyDeals: Bill targets those who hire illegal workers

Unions representing the building trades and a bipartisan group of state legislators have joined in an effort to keep illegal workers off Pennsylvania construction sites.

Rep. John Galloway (D., Bucks) has signed 53 lawmakers from both parties to cosponsor a bill that would suspend the business licenses of construction employers that fail to use Social Security databases to confirm their workers are here legally. He expects a vote this month.

Meeting with reporters Monday, Galloway called it a labor-rights question. He wants to punish contractors who "use and abuse a cheap workforce for profit," even as U.S. citizens struggle "to put food on the table because their jobs were stolen by a contractor who exploits illegal workers."

His ally, Rep. Daryl Metcalfe (R., Butler), preferred to talk about physical threats. He warned of "illegal alien invasion" and linked foreigners, not to low wages, but to violent crime and the "potential for terrorist attacks."

Frank Sirianni, president of the Pennsylvania Building and Construction Trades Council, insisted the proposal, and a companion bill requiring Social Security checks by state contractors, were "not anti-immigrant" laws. "My grandparents were immigrants [but] legal," he added.

The Pennsylvania Chamber of Business and Industry, construction employers, and the Service Employees International Union are against the bills, Sam Denisco, the chamber's head of government affairs, told me.

Even with an unemployment rate above 9 percent in Pennsylvania, employers around Philadelphia complain it's tough to find reliable, low-wage U.S. citizen workers. Excluding laborers who are in the country illegally might force them to pay U.S. citizens more.

That would be good for workers, but not so good for small businesses, or consumers, who'd likely pay higher prices.

I asked Metcalfe's office if it had estimated the benefits to low-wage workers and the cost to employers. His aides punted that question to lead sponsor Galloway, whose aide, Lauren Rooney, said she did not have that information.

Denisco, of the business and industry chamber, said he believes the U.S. Supreme Court will block state attempts to enforce federal immigration laws.

Wal-Mart Stores Inc. is willing to "sacrifice" profits so it can grab business from grocery stores, Janney Capital Markets analyst David Strasser told clients in a report.

The No. 1 retail chain "is counting on global sourcing, expanded private label (sales), [and] new merchandising initiatives," Strasser explained. That will allow Wal-Mart "to lower pricing in the grocery aisles" to lure customers, Strasser added.

Wal-Mart isn't yet a major grocery presence on the Main Line or other attractive markets. "I think Wal-Mart fully intends to open stores in the Philly area. The key is finding real estate and getting zoning approval," Strasser told me. Wal-Mart didn't return calls.

While the chain wages a grocery-price war, Strasser says Wal-Mart should be reluctant to cut prices on other stuff it sells. Its profits have to come from somewhere.

Modular Carpet Recycling Inc. says it will use a $603,000 prime-rate loan from the state-funded Delaware Strategic Fund, plus $5 million from the founder's friends and family, to open the first in a series of carpet-shredding plants. The initial site will be at a former furniture facility in New Castle, Del.

The plant will employ 30 "within three years," founder and chief executive Ron Simonetti told me. Simonetti, a Unionville resident, holder of a Drexel MBA, and former executive at DuPont Co., GE, and Foamex, uses technology licensed by Auburn University to turn old rugs and other used nylon into factory-ready "Renewlon" - without melting.

Why Delaware? "We talked to people in Pennsylvania, but we were able to get the deal done more quickly in Delaware," Simonetti told me.