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Center for the Study of Urban Poverty University of California, Los Angeles Working Paper Series

Day Labourers as Entrepreneurs?

Abel Valenzuela Jr.

April 2000

Journal of Ethnic and Migration Studies April 2000, 27(2): 335-352

Day labourers as entrepreneurs? Abel Valenzuela Jr. University of California, Los Angeles

Abstract The literature on entrepreneurship is primarily elitist, placing a large emphasis on firm size and location, innovation, proprietorship, and capital start-up. Missing from this body of literature are the temporary, low-wage self-employed. Using day labourers as a case study, I challenge the narrow and conceptually problematic definitions of entrepreneurship while also countering popular perceptions of day labour. Drawing upon 481 randomly surveyed day labourers, ethnographic field notes and in-depth interviews, I empirically show that a significant segment of the day labour population comprises an entrepreneurial class. I argue that day labourers fit into the class of entrepreneurs known as survivalist entrepreneurs. Day labourers show characteristics of both value and disadvantaged survivalist entrepreneurs in their day-to-day search for employment. I conclude that a larger number of day labourers fall under the ‘disadvantaged’ rubric of survivalist entrepreneurs, with the remainder undertaking this form of employment for reasons of choice and other attributes congruent with their labour market and personal values related to autonomy and flexibility. KEYWORDS: DAY LABOURERS; TEMPORARY AND CASUAL ENTREPRENEURSHIP; SOUTHERN CALIFORNIA; LATINO MIGRANTS

WORKERS;

INFORMAL

ECONOMY;

Introduction Entrepreneurship is often hailed as an upward mobility mechanism for different ethnic groups, especially the recently arrived. Indeed, the popular notion is that entrepreneurship is one of the primary routes for immigrant’s economic success and eventual social and economic integration into the host society. In the United States, during every decennial census between 1880 and 1990, immigrants were more likely to be self-employed than natives. Los Angeles, similar to New York City as an important and major arrival port, has long had more self-employed workers than other regions.1 Often lost in discussions of entrepreneurial growth are the ‘shop-less’ and temporary self-employed such as street vendors, domestic workers, home-based workers, and day labourers.2 These selfemployed and other contingent workers are conveniently relegated to the informal economy literature (Sassen 1988, 1991), in part because they operate outside of typical business patterns and are mostly unregulated, but also because we know little about their activities. On the other hand, the overwhelming bulk of research and theorising on entrepreneurship is based on elitist definitions (Light and Rosenstein 1995) focusing on innovation, small business, capital development, risk-taking, the self-employed and other characteristics that define standard accounts of entrepreneurship. This elite focus ignores occupations and workers characterised as contingent (informal, casual, temporary) selfemployed jobs often filled by immigrants and minorities.

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This article serves two primary purposes. First, I argue that day labour work is entrepreneurial. Doing so challenges the traditional literature on this topic but perhaps more importantly, begins a discussion on where seemingly ‘bottom-of-the-ladder’ but nevertheless self-employed occupations belong in the scholarship on immigrant enterprise. Second, to make the case that day labour is entrepreneurial, I present empirical evidence and analysis of the day labour market drawn from a study of this occupation in Los Angeles. Using day labour as a case study, I pay attention to key traits and theoretical arguments that define entrepreneurship to answer the question: are day labourers entrepreneurs? But first, what is day labour? In the Southwestern United States (California, Texas, Arizona), men, mostly Latino, immigrant and unauthorised, form the bulk of day labourers. Every morning and well into the early afternoon they gather on street corners, empty lots, busy intersections, at home improvement stores, and at ‘official’ hiring sites sanctioned by local municipalities to exchange their labour for individually negotiated wages. Their transaction is not illegal, though some municipalities have attempted to ban their solicitation of work in a public setting. The number of day labourers is not insignificant. In Southern California, between 15,000 and 20,000 day labourers, spread over 95 hiring sites, exist (Valenzuela 1999). This type of market is also found in other parts of the United States and the world such as Japan (Fowler 1996; Giamo 1995; Gill 1994; Marr 1997), Mexico (Vanackere 1988), South America (Townsend 1997) and Germany (Wilpert 1988). Day labour is an extremely effective market for bringing together prospective employers and seekers of work. Employers of day labourers especially benefit from this trade. The ease in hiring a day labourer is an important attraction for homeowners, subcontractors and other individuals who hire these workers. In addition, the pliability of this labour force to undertake tasks not easily or willingly performed by other workers, including illicit activities, is a major attraction. Contrary to popular perceptions, day labour is more than just a desperate attempt at securing employment in a public setting. There are of course certain elements to this market that suggest this perception, and of course some workers are indeed frantically seeking work with few or no alternatives to employment. But to characterise day labour as a ‘no-option’ job ignores the many day labourers who toil in this occupation for reasons of autonomy, wages and choice. For many workers, day labour serves as a viable alternative to wage employment that pays poorly and requires legal documentation. And, as I show later in this paper, for a significant number of workers, day labour is a full-time enterprise encompassing entrepreneurial activities and traits that gives agency to this market and challenges popular perceptions of who day labourers are and why they work in this occupation. In the sections that follow, I discuss the major theoretical arguments and definitions pertaining to immigrant entrepreneurship, paying particular attention to why immigrants, particularly the ‘marginally’ self-employed or contingent workers partake in this enterprise. I then briefly discuss the methods used in the collection of data for this paper. In the third section, I present evidence and make the case that day labour is entrepreneurial through three lines of argument. In the first, I discuss the day labour market’s connection to the regional economy and its demand and supply interactions. Second, I discuss the regulatory regime of the day labour enterprise. I show how the structure and processes of this market link day labourers to entrepreneurship activities and provide them with autonomy in their work lives. Third, I discuss key demographic and earnings data about day labourers and their work which suggest that a significant number fit the definition described in the literature as survivalist entrepreneurs – exhibiting characteristics and market processes described as either value or disadvantaged entrepreneurs (Light and Rosenstein 1995:213–15).

Making sense of immigrant entrepreneurship For researchers, the literature on entrepreneurship is vast, fragmented, and at times confusing due to the mixed use of terminology and the various disciplines that study the topic. Economists are perhaps the most conservative when it comes to defining enterprise activity, arguing that only medium and large size firms comprise entrepreneurship. Others claim that only innovators, or the elite entrepreneurs, belong to this class (Kilby 1971; Wilken 1979). On the basis of a study of Detroit, Archer (1991) provides a tiered definition with the top representing an ‘industrial/merchant elite’ that comprises 21 per cent of all self-employed. This elite is followed by two other categories, the general merchants and proprietors (51 per cent of all self-employed) and petty merchants (28 per cent). Light and Rosenstein (1995) challenge many of these narrow and conceptually problematic definitions by

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arguing that the self-employed include non-traditional types of entrepreneurs such as domestic workers, street vendors, flea market sellers, and day labourers. They argue that definitions of entrepreneurship are elitist with attention focusing on small and medium sized businesses, innovation, firm location and physical presence, and other traditional concepts not realised among marginalised self-employed workers. The market activities of marginalised self-employed workers are often labelled as informal and underground, or have been dismissed as a pseudo-economy comprised of the poorest, most unqualified and desperate pool of recently-arrived illegal immigrants (Waldinger 1996). Scholars of entrepreneurship are concerned with many different issues including defining and understanding terms that describe, differentiate, and give agency to economic activity outside of the general wage economy. Thornton (1999) in her review essay describes the entrepreneurial literature dichotomously. On the one hand, the supply-side focuses its bulk of research on the individual participants and their traits as entrepreneurs. The demand-side, generally less researched, analyses the context – the influence of firms, markets, and policies on how, where and why new enterprises are founded – under which entreprenuership occurs. Knowing why immigrants partake in self-employed entrepreneurial work is useful to understanding why day labourers partake in temporary, selfemployed day work. Several theoretical frameworks help us understand why individuals, and immigrants in particular, participate in entrepreneurial activities. These frameworks have considerable overlap and are by no means mutually exclusive when thinking about why immigrants or any other group would participate in entrepreneurship. Nevertheless, these frameworks set the stage for grasping the broad literature on this topic and for arguing the ‘fit’ of day labour in them. These frameworks are summarily categorised below as: 1) class and ethnicity, 2) supply and demand, 3) disadvantage, 4) informalisation, and 5) survival. Class and ethnic resources, including ethnic strategies, distinguish ethnic entrepreneurs from mainstream businesses. Ethnic entrepreneurs possess unique advantages (and disadvantages) due to their ethnicity. As a result, ethnic entrepreneurs benefit from co-ethnic loyalty (from buyers and sellers), co-ethnic employment, ethnic socialisation, ethnic values, attitudes, traditions, and economic strategies (e.g. familial or communal loans). Immigrant and ethnic participation in ethnic enterprises bestows an advantage over non-ethnics and therefore leads to higher rates of participation (Portes and Bach 1985; Portes and Zhou 1992; Waldinger 1986). As I show later in this paper, day labourers benefit from their ethnicity; and likewise, ethnicity serves some type of exclusionary mechanism for others seeking this type of work. As Waldinger et al. (1985) demonstrate, supply and demand, and the interactions between them, are key factors of entrepreneurship. Supply and demand factors need to be distinguished when considering the development of ethnic economies, particularly as they regard entrepreneurs. Waldinger and his colleagues made a significant finding when they observed that an ‘interaction’ effect allowed for congruence between the demands of the economic environment and the informal resources of the ethnic population (supply). As a result, ethnic entrepreneurs emerge from the interaction of supply and demand – the entrepreneurial performance of groups, be they ethnics or immigrants, depends upon the fit between what they have to offer and what a market requires (Light and Gold 1999). As I show later, the day labour market beckons employers who seek reliable, hardworking temporary workers, and day labourers meet this demand because they have a reputation for working hard, making themselves readily available, and charging below-market rates for their services. Disadvantage theory (Aurand 1983) explains higher entrepreneurial participation rates for some groups relative to other groups. This theory asserts that disadvantage (i.e. unemployment, underemployment, business cycles, unauthorised status) in the general labour market encourages self-employment independent of the resources of those disadvantaged. That is, high unemployment or underemployment would be sufficient enough to cause people to seek alternative incomegenerating activities, particularly those activities involving entrepreneurship. As a result, we can think of varied forms of disadvantage for explaining uneven entrepreneurial activities among different groups. As I show later in this paper, day labourers are disadvantaged in several ways; a large number are unauthorized, speak limited English, and have limited levels of human and work-based (cultural) capital. The informal economy and its relationship to entrepreneurship are usually discussed as a consequence of labour market disadvantage (Light and Rosenstein 1995). That is, to the extent that

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labour force disadvantage and lack of resources (e.g. underemployment) exist for a worker, they turn to self-employment, which at times might involve economic activities in the informal economy. A typical firm in the informal economy requires few resources. For example, street vendors, day labourers and individuals selling fruit require little if any capital resources. Street prostitution and other illicit activities in the informal economy also require little to modest start-up and maintenance capital. In addition, the skill requirements are minimal, certainly unknown to potential employers, and the knowledge base of these enterprises is not sophisticated. In essence, anyone with the right motive, character and gumption can be a fruit seller or day labourer. Lack of resources and labour market disadvantage are key to self-employment in the general economy and likewise in informal enterprises. The corollary is, of course, that those with resources normally avoid the informal economy since their resources permit entry into the mainstream (Light and Rosenstein 1995). Day labour require little if any start-up resources, is unregulated compared to the formal labour market, and is paid ‘under-thetable’ similar to other informal labour market activities. Finally, theories of disadvantage also help explain self-employment as either a mobility ladder or as a survivalist strategy. I argue later in this paper that it is within this context – survival – that we can best discuss the ‘fit’ of day labour work in the theoretical literature of entrepreneurship. This body of literature asks whether certain ethnic groups pursue entrepreneurship as a better alternative (higher income returns on human capital or better lifestyle) to wages or salaries in the general labour market. Or do immigrants use self-employment as a survivalist strategy, as an alternative to unemployment and underemployment (Jones 1988)? Light and Rosenstein (1995) divide survivalist entrepreneurs into two useful types: value entrepreneurs and disadvantaged entrepreneurs. Value entrepreneurs choose self-employment rather than low-wage jobs for a number of reasons having in part to do with values such as flexibility, independence or autonomy, and the social status of being your own worker. To be clear, the general wage economy has not provided sufficient returns to employment for these workers. As a result, they partake in occupations that, while not much better than the wage economy, provide workers with certain value traits. Low returns to work in the wage economy and to selfemployment (e.g. day labour) being equal, some prefer to toil as survival entrepreneurs for reasons related to the flexibility, autonomy and diversity of tasks afforded in this line of work – values important to all classes of workers. On the other hand, disadvantaged (survivalist) entrepreneurs undertake selfemployment (e.g. day labour) because, as a result of labour market disadvantage, they earn higher returns on their human capital in self-employment than in wage and salary employment or because they have no other employment options (Light 1979; Min 1988). Day labourers, having to toil under extreme hardship in the general wage economy under minimum wages and constant supervision with few options for mobility, may prefer day labour work for reasons of value. Returns to earnings being equal in the wage economy and day labour market, immigrant workers may opt for the latter. It is an option, perhaps not viable in the sense that it is a path out of destitution, but one of survival. In Los Angeles, we see this often where street vendors, day labourers, domestic workers and food cart merchants abound. At the very least, survivalist entrepreneurs produce goods and services that enhance them and their community’s wealth (Light and Rosenstein 1995).

Research description The primary data source for this paper is the Day Labour Survey (DLS), carried out in 1999. The DLS is a face-to-face random survey of 481 day labourers administered at 87 different hiring sites throughout Southern California.3 All but 10 interviews were administered in Spanish. Our refusal rate (day labourers unwilling to take part in the survey) was very low, (6 per cent), remarkably so given the difficulties of approaching and convincing a population of mostly unauthorised immigrants to participate. Most respondents (84 per cent) were unauthorised to be in the United States. To convince day labourers to participate in our study, we promised them their anonymity, did not request any personal information that could link them to their responses, and convinced them that we were legitimate university researchers rather than a government office such as the Immigration and Naturalization Service (INS). Because the possibility of missing work for the day as a result of partaking in our survey was real, and because we hoped to convince the workers at these hiring sites to participate in our study, we offered an incentive of $25 for each respondent’s completed survey. Twenty-five dollars for a little more than an hour of their time, even if they were not hired for the day,

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was a reasonable payment. In many instances, we observed that those who participated in our study were still able to secure employment for the day. In addition to the DLS, we undertook semi-structured, open-ended, in-depth interviews of day labourers (n=46) and their employers (n=29). Each day labour interview lasted approximately four to six hours, while the employer interviews were much shorter, between one and two hours. Most of the day labour interviews were completed during the early morning and were recruited from day labour hiring sites and in some instances via snowball referrals (Biernacki and Waldorf 1981; Van Meter 1990; Watters and Beirnaki 1989). Most interviews were conducted in Spanish and all were audiorecorded, translated into English and transcribed. Employer interviews were similarly audio-recorded and transcribed for analysis. The sample for the in-depth interviews was selected by non-randomly approaching workers and employers at different hiring sites, speaking to them about their work in general, and then asking them to participate in the study. Finally, during a 5-month period, we spent significant time at 10 different hiring sites. We treated each site as a case study from which to learn the day-to-day activities, interactions, and processes of day labour work and life. Each case study involved direct observation, informal interviews, field note gathering, conversations with local merchants, residents, police officers, employers, and the day labourers themselves. These data inform my analysis that a significant segment of the day labour population is an entrepreneurial class.

Findings: more than meets the eye Three important factors point to day labour as more than a chaotic, desperate measure for employment. To be sure, for many, day labour work is an attempt at labour market survival. But to paint all day labourers as desperate job-seekers at the bottom of the barrel with few employment options ignores the complex processes of this market and the varied traits and characteristics of the workers themselves. Not all participants of this market are recent arrivals, desperately seeking work. As I show later, a significant number are relatively well educated, have been in the United States for many years and, when queried, respond that they partake in this market for different reasons having to do with their personal choices related to their work and lifestyle. In addition, the structure of this market and the processes involved in the labour exchange point to entrepreneurship. To make my point that day labour is entrepreneurial, I look firstly at the regional impacts and supply and demand function of this market; secondly at the rules, regulations, and practices of day labour; and thirdly at the demographic and earnings characteristics of these workers. The first point addresses that part of the literature that emphasises the role of interactionism between supply and demand for the development of entrepreneurship. In this section I similarly show the importance of supply, demand, and the regional impact of the day labour market in Los Angeles. The second section describes the rules and regulations of this market, paying particular attention to ease of entry into this market, and other important traits such as networking and camaraderie. When relevant, I make important links between these traits and characteristics typically found in entrepreneurial work. Finally, in the third section, I highlight key demographic data that suggest day labourers are undertaking this occupation for reasons of choice rather than as a desperate, no-choice option. As a result of this choice, and other key characteristics of this market such as relative earnings, non-payment of taxes, and the ability to wage negotiate, I conclude that day labourers are survivalist entrepreneurs of two types: value and disadvantaged.

Day labour: regional impacts and supply and demand The horizontal mobility and, to a lesser extent, the vertical mobility of day labour work is the result of the spatial, industrial and occupational distribution of day labour work. As a result, day labourers have many opportunities to shift in and out of regular employment. They are also able to move within the self-employed day labour market quite easily. The day labour market provides an important supply and demand function for the regional economy of Los Angeles. It also fills a specific demand niche for the general and subcontractor segments of the population. The easy nature in hiring a day labourer, almost instantaneously, to help with household improvement, job or repair activity is an important attraction for homeowners and other individuals. For similar reasons, this market is also extremely attractive to construction subcontractors who aim to

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add a worker or replace a regular employee who has called in sick or has been fired. Besides basic supply and demand factors, day labourers are a pliable labour force that can be used to undertake tasks not easily or willingly performed by workers in the general economy. Finally, the cost of hiring day labourers makes this market extremely attractive and suits employers hoping to cut labour costs. Hiring day labour however is not risk-free. First-time employers risk hiring a worker who may have exaggerated his skill for the sake of securing work. Prospective employers are unable to verify the work experience or ability of individuals participating in this market. If a worker fails to perform to the employer’s expectation, employers have little legal recourse. They can demand that the job be performed adequately or in a timely manner or they can refuse to hire that worker for a future job. Some employers, after disagreeing with the outcome of their temporary employees, withhold their wages or pay an amount less than previously agreed. Day labour work has come to occupy an important sector of local urban and regional economies. Although day labourers do not exist everywhere, they are increasingly found in suburban fringes of large urban centres. Their unique attributes—ease of entry and easy accessibility—provide for optimal opportunities where, as a result of a boom economy, employers and workers are plentiful. As a result of an expanded economy, construction work is growing, home refurbishing and improvement projects are increasing, and related jobs (i.e. moving, painting, demolition, landscaping) are in demand. This in turn sparks demand for day labour work. Finally, the growth of the day labour market in Los Angeles and Orange County is also related to the recent increase in small immigrant businesses that have developed in the area. These businesses have grown in part as a response to increased immigration to the region and thus, pent-up demand. Most of these businesses do not have the necessary resources to support a large employee base, but can hire cheap temporary labour when labour shortages occur or when extra workers are needed. To adjust to different business cycles and an unstable workforce, small businesses use the day labour pool. In Southern California, opportunities to work as a day labourer are plentiful. Over 95 hiring sites exist and range in type, size, and location. In the course of my research, I catalogued three types of hiring sites (Table 1). The first type is connected, which represents those sites ‘connected’ to some specific industry such as painting (Dunn Edwards, Standard Brands), landscaping or gardening (nurseries), moving (U-haul, Ryder), and home improvement (Home Base, Home Depot). Forty-five connected sites were identified throughout Los Angeles and Orange County. Day labourers who convene at connected sights do so to work in a particular industry or trade. They either have a skill in that trade or are attempting to gain experience. One measure of opportunity in the day labour market is the size of the site, both in terms of potential employers and the workers. The larger the site, the greater the work opportunity. Alternatively, a larger site with many workers means a higher level of competition as workers vie for different and an unknown daily fluctuation of jobs. Connected sites, without distinguishing by trade, on average have 24 men seeking employment on any given morning. This average masks very considerable variations, however, with a few sites hosting well over a hundred. TABLE 1 ABOUT HERE The second type of hiring site is unconnected. This site type seemingly does not have any connection to a specific industry but may very well exist for other reasons such as foot or vehicular traffic, police co-operation, or historical reasons (i.e. a site that has existed for many years). Just under a third (31 per cent) of our sample was drawn from the 34 unconnected sites we identified in Southern California. Despite the lack of a direct connection to a particular industry or trade, such sites nevertheless provide an important link to the regional economy. On average, 16 men convene at unconnected sites – the smallest of the three hiring site types identified in this study. The workers at this site are hired by an assortment of employers to undertake a variety of tasks, mostly related to the construction trade, but many are hired for jobs outside of this industry. The third site type is regulated. Regulated sites are formal hiring sites either financially sponsored by a city or municipality, a community-based organisation, or a private entity such as a home improvement store.4 Regulated hiring sites offer prospective employers a variety of day labourers from which to choose. On average, more men convene at this site type than connected or unconnected hiring sites, probably because workers are provided with shelter, bathrooms, modest

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sources of food (e.g. coffee, pastries, fruit), tool exchanges and borrowing, and assistance with wage disputes. Employers can arrive at any time between 6:30 a.m. and 2 p.m. any day of the week (some regulated hiring sites are closed on Sundays – though nearby connected or unconnected sites likely exist). Most of these sites have minimum wage standards and all wages are negotiable between worker and employer. In the Southland, there is no particular pattern to where the eight regulated sites are located. However, six sites are located in six different city council districts and key institutional factors seem to guide their particular location. For example, all of the regulated sites, even though nearby mixed industrial areas and residential neighbourhoods, are located on empty lots, a freeway underpass, storefront or municipal parking lots. Each of the six sites also receives modest financial support from the City of Los Angeles to hire staff to maintain them. The types of job that day labourers undertake are also important for understanding their impact on the local economy. Table 2 provides information on the job specialisation of day labourers in Southern California. These data allow us to speculate which industries day labour work most influences in a regional context and which jobs provide day labourers with mobility possibilities from self-employed work to general wage employment. Almost all of the jobs undertaken by day labourers are related to the broadly defined construction industry. So, to the extent that construction entails home improvement, painting, carpentry, plumbing, roofing, electrical, and masonry, then the day labourer market is predominantly captured in this niche. In fact, when combined, these tasks represent the most frequent responses of day labourers in their description of their job specialisation. Even though each of these occupations warrants its own set of requisite skills, certificates, and expertise, the concentration of day labourers in them is important to supply and demand within the regional construction economy. TABLE 2 ABOUT HERE

Day labour: rules, regulations and practices The regulatory regime of day labour is complex. Here, I provide a discussion of the rules, informal regulations and practices including entry into this line of work, working hours and the role of networks and friendships. These characteristics are meant to highlight the relationship between entrepreneurship traits and day labour work. Entry to entrepreneurship is important for understanding who partakes in this enterprise. It is also fundamental for explaining the role that ethnicity, capital, and other factors play in the uneven participation of different immigrant and non-immigrant groups in entrepreneurship activities. The day labour market is open to anyone wishing to work. There is, however, a noticeable exception to this rule, the absence of women as day labourers. Despite this glaring fact, any able bodied man willing to sell his labour in a public setting is able to do so at most of the sites in Los Angeles. Easy and open access to this market characterises 90 per cent of all hiring sites. A few regulated sites pose some barriers (use fee, restricted hours, quota limit), but even at these sites, access is generally favourable. In practice, two regulated site types exists: those that offer open and unlimited access to anyone seeking work on the streets, and those that limit the number of men who can participate at their sites. Open regulated sites have few restrictions for participation. The rules that do exist are internally developed and serve to maintain order and fairness in securing jobs at the hiring site. The rules maintain order, set times of employment and the order of the hiring queue, and establish other regulations at the hiring site. Failure to abide by the rules results in expulsion or being barred from obtaining work that day at that hiring site.5 Limited regulated sites have restrictions that minimise participation. Private owners (such as home improvement stores) or municipalities usually control these sites. The regulations are varied, but most restrict the number of men (e.g. 40) who are allowed to participate in the hiring site on any given day. In addition, a modest fee, $5–$15 per week or month, is charged for basic upkeep and maintenance of the site (fees are not charged at the open regulated sites described previously). Finally, most of these sites check for legal documentation. Limiting day labourers to those with documents is contrary to the supply of this market which is primarily undocumented (84 per cent). Apart from the eight regulated hiring sites, which comprise about 10 per cent of the day labour market in Los Angeles and Orange Counties, the market is wide open. Informal rules and norms, however, do exist for the other two site types. For example, day labourers often inform each other of

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unscrupulous employers and identify those who pay poorly for difficult or time-consuming work. A minimum wage is usually established at most sites and when workers do not abide by it, they are chastised.6 Other less formal but mostly routine practices provide insight into the day-to-day activities that govern this market. The hiring of day labourers is usually done in small groups (2–3), though hiring single employees is by no means unusual. The selection is often done through referral by one of the day labourers that previously worked with the employer the day before or who was chosen as the ‘foreman’ because of his aggressiveness, ability to speak some English, or by luck. The lead person then selects his friends to join him for that particular job. The lead person usually serves in a liaison role with the employer who communicates work orders and wage information to him, so that he can relay them to the other day labourers. For day labourers, establishing good relationships with employers is also good, for obvious reasons. If an employer knows you, s/he is less prone to abuse you and default on your daily wage, but perhaps most importantly, may hire you on a semi-consistent basis. Cultivating relationships is also important for being able to leave this labour market and secure employment in the wage-based general economy because an employer can recommend a day labourer that has performed well. Last, a good relationship with an employer usually leads to certain ‘benefits’ such as better and timely pay, longer and more regular work breaks, a hot or cold lunch, and regular sun-up to sun-down work days. Friendships among day labourers are important for several reasons. Day labourers often seek each other for companionship, camaraderie, advice and favours. In addition, informal work practices (friendships, co-dependence, ethnic loyalty, and other forms of networking) aid day labourers in securing employment and reciprocal forms of mutual support such as temporary housing, transportation and food. The day labour market has no set time period of operation, although the overwhelming majority of men begin gathering at sites between six and seven in the morning. The Peak hiring of day labourers is in the morning between 6am and 10am, though hiring of workers after this time frame is not uncommon. One can easily find day labourers well into the afternoon, especially at the larger, more popular sites. When hired, most work until nightfall and some, depending on the deadline of the job, perform several eight-hour work shifts. A few key sites begin earlier, such as one adjacent to the flower market and another that caters to landscaping and gardening. Payment for services is due at the end of the workday or task. Most payment is in cash, and day labourers prefer this method to a cheque.7 Taxes are rarely if ever paid by a day labourer or their employer. When injured, day labourers usually have no form of insurance or resources from which to seek care. A few employers pay for their care when injured but not often. The role of ethnicity in securing day labour is unclear but it is a major characteristic of the participants in this market. On the one hand, the overwhelming majority (98 per cent) of day labourers drawn from my random sample are Latino, suggesting that ethnicity may very well play an exclusionary role for participation. On the other hand, during our survey and qualitative data collection efforts, we frequently saw African American and white day labourers participating in this market, albeit at a much smaller rate. They mingled among the Latino workers and apparently seemed comfortable in their environs. There were however many more sites where no Whites or African Americans were present than those sites where they were noticeable. In other parts of the United States such as the South and Midwest, we know that African Americans and Whites have a larger presence in this market (Catholic Legal Immigration Network 2000; Southern Regional Council 1988; Theodore 2000); these are areas with distinctly smaller numbers of Latinos. The large presence of Latinos in Southern California’s day labour market may very well be a function of their enormous demographic concentration in the area. Or, as I suggest above, ethnicity may be playing a larger role – perhaps exclusionary – in this market.

Day labour: key characteristics and earnings A demographic portrait of day labour suggests that a significant number participate in this market for reasons of entrepreneurial survival (Valenzuela 1999). Some day workers participate in this niche because they have no options and/or believe the general wage market is unavailable or inadequate for their survival. Others participate because of attractive labour market values such as flexibility,

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wage options, and diversity of jobs – all key factors that afford a modicum of autonomy for these workers. Several data suggest that day labour may be a disadvantaged survival entrepreneur strategy, as described by Light and Rosenstein (1995). For example, day labourers are predominantly Latino and immigrant, mostly recently arrived, and overwhelmingly unauthorised to be in the country legally (Table 3). More than half have been in the United States for less than five years, and almost 30 per cent immigrated during the previous year. The educational attainment of most day labourers is predictably low and more than half has less than six years of education, with about 5 per cent having none. The high school degree rate for day labourers was woefully below the 1998 national rate for male Hispanics, which was 28.7 per cent and the lowest of any major ethnic/racial group in the United States (US Bureau of the Census 1998). Finally, when queried about what most prevents day labourers from participating in the formal job market, over 40 per cent listed lack of legal documents, followed by lack of English proficiency (21 per cent). These last two findings suggest that specific barriers disadvantage a significant proportion of the day labourer population from seeking work in the formal, wage-based labour market. TABLE 3 ABOUT HERE On the other hand, key interview data suggest that day labour is a strategy employed by workers with labour market values consistent with the traditional self-employed. It provides them with the quality or state of being self-governing or autonomous, without outside control by one employer. A large number of day labourers partake in this market because it affords them certain freedoms, levels of flexibility, a modicum of living standards, and the ability to negotiate a wage or contractual price for their work. In addition, demographic data strongly suggest that a significant number have characteristics inconsistent with desperate job seekers and that they partake in this market by choice. Taken together, these data indicate that day labour is not completely comprised of uneducated, lowskill, recently-arrived, single men frantically seeking work. For example, almost one quarter (23.4 per cent) of day labourers has been in the United States for more than 11 years, with 10 per cent having been in the country longer than 20 years. Even though this labour market is overwhelmingly immigrant, a dichotomy between recent arrivals (less than 1 year) and older immigrants (11+ years) clearly exists. Not all day labourers are uneducated. More than one third has between 9 and 12 years of education – the equivalent of some college education in countries such as Mexico, Guatemala and El Salvador. The relatively high proportion of day labourers with more than nine years of education (38.6 per cent) belies their concentration in this market. When queried as to what prevents them from working in the formal wage-based economy, 18 per cent criticised jobs with low pay, with another 7.4 per cent citing discrimination (race and age) and employer abuses as their primary reasons (Table 4). Clearly, these data strongly suggest that day labourers consider certain values important to them in their choice to partake in this temporary labour exchange. TABLE 4 ABOUT HERE Earnings provide a similarly mixed portrait of day labour motivation for this market (Table 5). On the one hand, the mean yearly income8 is slightly above the poverty threshold for a single family in 1999. On the other hand, the mean hourly rate of $6.91 seems promising, about $1.75 higher than the federal minimum wage and about $1.15 higher than the California State minimum wage.9 At this rate, full-time, year-round employment earns a day labourer about $14,400, almost 175 per cent above the federal poverty threshold for a single person in 1999. However, this calculation is deceiving because it assumes stability in the day labour market. Day labour work is highly unstable, and the mean yearly income of $8,489 more likely reflects actual earnings for this type of work because it captures cyclical variations of employment and hourly rates below and above $6.91. Nevertheless, it is clear that day labour work pays. It is certainly comparable to other types of low-skill and low-paying jobs in the formal market, and the mean yearly income is about $200 above the federal poverty threshold. TABLE 5 ABOUT HERE

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Other wage-related and autonomy reasons also push day labourers to this type of work. First, day labourers are usually paid daily and in cash. There are, of course, exceptions, but the expectation is that a day labourer is paid at the end of the workday (they are also usually provided with lunch). Collecting your pay at the end of the workday is especially beneficial to working-class and poor people who often have to survive on a daily basis. Having to wait for payroll processing or a similarly bureaucratic payment often takes weeks after a job is completed. Cash also circumvents having to open a bank account, a key attraction to many unauthorised immigrants who shy away from such institutions for lack of proper documents or general mistrust. Second, day labour work is paid tax-free, or ‘under the table’, further increasing the gap between the state and federal and day labour reservation wage rates. In tax-free terms, $6.91 is significantly higher than the federal minimum rate of $5.15, about $2.50 higher assuming a 15 per cent tax rate. Similarly, the estimated mean yearly income for day labourers ($8,489) is about $1,300 higher when tax-free. For a recently-arrived immigrant or someone who has worked for minimum wages for many years, this difference is not insignificant. Third, most day labourers negotiate their wages for all of their jobs. Being able to walk away from a job should not be underestimated, especially if the job pays poorly, is dangerous, or is particularly filthy or difficult to do. Knowing the market value of skilled and unskilled jobs provides day labourers with a keen advantage over their employers and non-day labourers. It allows day labourers to undercut the market rate at a significant discount, while earning a rate significantly higher than similar work in Mexico or Central America and higher than the US minimum wage. Being able to negotiate a day’s labour well is key to successful day labouring and a trait not lost to Latino immigrants who come from countries where bartering is commonplace.

Conclusion: day labourers as survivalist entrepreneurs The key to successful entrepreneurship is human capital. However, other traits can also aid participation in self-employment – such as the factors that disadvantage or prevent workers from participating in the general wage economy. Indeed, the premise of disadvantage theory rests on resource disadvantage or labour market disadvantage. Faced with either of these two disadvantages, workers have few options. One strategy available to a worker faced with labour disadvantage is to undertake self-employed entrepreneurial activities to survive. We have seen that at least two types of survivalist entrepreneurs exist, value and disadvantaged. Value entrepreneurs choose selfemployment rather than low-wage jobs for a number of reasons having to do with their values. For example, Bates (1987) argues that women comprise a large number of value entrepreneurs because many of them are attracted to the benefits of self-employment such as the ability to juggle home and work more flexibly than through wage employment. Others prefer the entrepreneur’s independence, social status, life-style or self-concept compared to what a low wage job offers them (Light and Rosenstein 1995). Gold (1992) documents that some of the attraction of entrepreneurship for Vietnamese is the ‘ability to provide them with a level of independence, prestige, and flexibility unavailable under other conditions of employment.’ Thus, value entrepreneurs select self-employment for reasons that include non-monetary considerations. Disadvantaged (survivalist) entrepreneurs primarily undertake self-employment because, as a result of labour market disadvantage, they earn higher returns on their human capital in self-employment than in wage and salary employment (Lee 1999; Light 1979; Min 1988). As a result of labour force disadvantages such as physical disability, ethno-racial discrimination, unrecognised educational credentials, exclusion from referral networks, undocumented status, little to no work experience, or other unfair labour market attributes, disadvantaged entrepreneurs prefer self-employment to regular wage work. In this article, I have shown that a significant number of day labourers undertake these forms of selfemployment consistent with survivalist entrepreneurs – exhibiting characteristics and market processes described as either value or disadvantage entrepreneurs. The data presented here suggest that a large number of day labourers fall under the ‘disadvantage’ rubric of survivalist entrepreneurs, while another significant number undertake this form of employment for reasons of choice congruent with their labour market and personal values. Additional data not systematically covered in this article similarly suggest that day labour is entrepreneurial. For example, ethnographic participation at hiring sites reveals the development of

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other entrepreneurial services and forms of advertising. For instance, at one particular connected site, approximately ten day labourers advertised their access to or ownership of a truck, enabling them to specialise in moving type jobs. Many day labourers make it well known that they have their own tools and or specific skills to market. Finally, many day labourers have their own business cards listing cellular and home phone numbers, including a few with email addresses. Most day labourers, given their few options in the low-wage formal labour market, resort to this type of work merely to survive – they are desperate and have run out of employment options. On the other hand, a significant number of workers, who likewise have few options in the low-wage labour market, seem to be driven to day labour by values and attributes not exclusively related to wages. Thus, in the larger scheme of disadvantaged and low-skill work, day labour offers options and attributes not easily obtained in the poorly paid wage-based market. Day labour, while hardly a panacea to low-wage employment does offer important attributes that, when earnings are equal between the two, affords workers with traits and labour market processes attractive to their sense of being. In some instances, day labour may be more attractive than low-wage work because of the better pay it affords and the opportunity for securing steady employment in the well-paid construction industry. Analysing this market as more than just a frantic, bottom-of-the barrel, job acquisition strategy challenges the traditional literature on marginalised employment and confronts popular notions of contingent, openair employment markets. More importantly, it allows us to analyse day labour as a self-employed entrepreneurial enterprise.

Acknowledgement I thank and gratefully acknowledge the research assistance of Janette Kawachi. I am also indebted to Robert Kloosterman, Jan Rath and Elizabeth Gonzalez for their helpful comments and suggestions on an earlier draft. The research on which this paper is based is funded by a grant from the Ford Foundation.

Notes 1 In this paper Los Angeles refers to the five-county region: Orange, San Bernardino, Riverside, Ventura, Los Angeles. This region extends over a vast area encompassing 33,210 square miles, surpassing all the other major metropolitan areas in the United States, including New York City. When comparing Los Angeles with the major immigrant destination ports, the region stands out. For example, contemporary Los Angeles is home to a far larger share of today’s foreign-born population than the immigrant New York of Old. In 1990, Los Angeles was home to 3.9 million immigrants, 400,000 more than New York, which stood in second place. In foreign-born population, its population outranked that of almost every other major US city by a large degree (Waldinger and Bozorgmehr 1996: 13–14). 2 No formal definition of temporary employment exists. In general, however, temporary employment is distinguished by impermanence of the employment; hazards in or undesirability of the work; the absence of fringe benefits; and limited governmental protection. Day labour, a type of temporary employment, is similarly without definition. In the South of the United States, day labour is often in reference to work stemming from employment agencies (e.g. Kelly Company), temporary employment temporary contractors, or temporary ‘help needed’ ads (Southern Regional Council 1988). More recently and especially in the Southwest, day labour is in reference to mostly immigrant, Latino men who gather on street corners to solicit temporary, daily employment. The research on which this article is based uses this latter definition. 3 Site identification was undertaken six months prior to survey implementation. We initially identified 97 different hiring sites. We were prepared to survey at all 97 sites but after the survey began, we discovered that ten of the sites we had previously identified had disappeared in the course of implementing the survey six months later. As a result, our sample is drawn from 87 hiring sites. A team of UCLA graduate, undergraduate and former day labourers undertook data collection for each component of this research project. The author of this article is the principal investigator of this study.

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4 In Los Angeles, two community-based organisations – the Coalition for Humane Immigrant Rights of Los Angeles (CHIRLA) and the Instituto de Educacion Popular del Sur de California (IDEPSCA – Institute of Popular Education of Southern California) – currently facilitate the day-to-day activities of six regulated hiring sites. 5 Community-based organisations that work with day labourers facilitate hiring through a participatory process whereby workers develop and enforce rules of conduct and procedures of hiring, and organisations provide social capital acquisition through English as a Second Language (ESL), citizenship and health-related courses. 6 While difficult to enforce, at least from a legal standpoint, the site minimum wage is strongly encouraged and often strictly enforced by the workers. Accepting a rate below the minimum standard usually results in social and public scorn such as loud whistling, yells, and finger-pointing – similar to what might be witnessed when a strike-breaker attempts to cross a union picket line. 7 Cheques are usually frowned upon for at least three reasons. Giving a cheque to a day labourer for his wages is an easy way to fraud him. Second, many day labourers do not have bank accounts or the proper identification to cash a cheque. Finally, banking hours are inconsistent with day labour work schedules. 8 To determine a monthly and then a yearly income figure, we asked day labourers to recall what they might earn during a ‘good’ month (i.e. summer) and during a ‘bad’ month (i.e. winter). The mean rate of all the responses to this question was then tabulated for each type of month. The mean yearly income is then calculated by adding wages for 4 ‘good’ months, 4 ‘bad’ months and 4 ‘average’ months (average of good and bad months) = 12 months or 1 year. My figure probably underestimates their yearly income because I assumed 4 ‘bad’ months, which in Los Angeles is rare. 9 One way to determine a minimum wage of sorts for day labourers is to ask them information regarding what economists call a reservation wage. A reservation wage is the lowest amount (usually per hour) a person is willing to work for a given task or occupation. The mean reservation wage for day labourers under normal conditions was $6.91 per hour. That is, on average day labourers refused to work at a rate lower than $6.91 per hour. The reservation wage under low demand conditions (i.e. winter/rainy season, and/or consistently bad luck securing jobs) is $6.21 per hour.

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Light, I. (1979) ‘Disadvantaged minorities in self-employment’, International Journal of Comparative Sociology, 20(1–2): 31–45. Light, I. and Rosenstein, C. (1995) Race, Ethnicity, and Entrepreneurship in Urban America. New York: Aldine de Gruyter. Light, I. and Gold, S. (1999) Ethnic Economies. San Diego: Academic Press. Marr, M.D. (1997) ‘Maintaining autonomy: the plight of the American Skid Row and the Japanese Yoseba’, Journal of Social Distress and the Homeless, 6(3): 229–50. Min, P.G. (1988) Ethnic Business Enterprise: Korean Small Business in Atlanta. New York: Center for Migration Studies. Portes, A. and Zhou, M. (1992) ‘Gaining the upper hand: economic mobility among immigrant and domestic minorities’, Ethnic and Racial Studies, 15(4): 491–522. Portes, A. and Bach, R. (1985) Latin Journey. Berkeley: University of California Press. Southern Regional Council (1988) Hard Labor: A Report on Day Labor Pools and Temporary Employment. Atlanta, GA: Southern Regional Council. Sassen, S. (1988) The Mobility of Labour and Capital. Cambridge: Cambridge University Press. Sassen, S. (1991) The Global City: New York, London, Tokyo. Princeton, NJ: Princeton University Press. Theodore, N. (2000) A Fair Day’s Pay? Homeless Day Laborers in Chicago. Chicago: Report prepared for the Chicago Coalition for the Homeless, Chicago Interfaith Committee on Worker Issues, and Chicago Jobs with Justice. Thornton, P.H. (1999) ‘The sociology of entrepreneurship’, Annual Review of Sociology, 25(XX): 19– 46. Townsend, C. (1997) ‘Story without words: women and the creation of a Mestizo people in Guayaquil, 1820–1835’, Latin American Perspectives, 24(4): 50–68. US Bureau of the Census (1998) Current Population Survey, March. Washington, DC: US Government Printing Office. Van Meter, K.M. (1990) ‘Methodological and design issues: techniques for assessing the representativeness of snowball samples’ in Lambert, E.Y. (ed.) The Collection and Interpretation of Data from Hidden Populations. Washington, DC: US Government Printing Office, National Institute on Drug Abuse, Research Monograph 98: 31–43. Valenzuela, A., Jr. (1999) Day Labourers in Southern California: Preliminary Findings from the Day Labour Survey. Los Angeles: UCLA, Institute for Social Science Research, Center for the Study of Urban Poverty, Working Paper Series. Vanackere, M. (1988) ‘Conditions of agriculture day-labourers in Mexico’, International Labour Review, 127(1): 91–110. Waldinger, R. (1986) Through the Eye of the Needle: Immigrants and Enterprise in New York’s Garment Trades. New York: New York University Press. Waldinger, R. and Bozorgmehr, M. (1996) ‘The making of a multicultural metropolis’ in Waldinger, R. and Bozorgmehr, M. (eds) Ethnic Los Angeles. New York: Russell Sage Foundation, 3–37. Waldinger, R. (1996) ‘Ethnicity and opportunity in the plural city’ in Waldinger, R. and Bozorgmehr, M. (eds) Ethnic Los Angeles. New York: Russell Sage Foundation, 445–470. Waldinger, R., Ward, R. and Aldrich, H. (1985) ‘Trend report: ethnic business and occupational mobility in advanced societies’, Sociology, 19(4): 586–97. Watters, J.K. and Biernacki, P. (1989) ‘Targeted sampling: options for the study of hidden populations’, Social Problems, 36(4): 416–30. Wilken, J. (1979) Entrepeneurship: A Comparative and Historical Study. Norwood, NJ: Ablex. Wilpert, C. (1998) ‘Migration and informal work in the new Berlin: new forms of work or new sources of labour?’ Journal of Ethnic and Migration Studies, 24(2): 269–94.

Author details Abel Valenzuela Jr. is Assistant Professor in the Department of Urban Planning and the César E. Chávez Center at the University of California in Los Angeles. E-mail: [email protected]

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Table 1. Day labour sites Site types

no.

no. of respondents

Connected Unconnected Regulated Total

45 34 8 87

261 150 71 481

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mean no. of day labourers per site 24 16 33

Table 2. Job specialisations offered by survey respondents Specialisation % Construction 39.2 Painting 29.4 Gardening 27.9 Plumbing 15.8 Carpentry 14.0 Mechanic 5.6 Electricity 3.3 Roofing 3.5 Welding 2.3 Masonry 1.0 Cooking/Baking 1.4 Other 16.8 Note: Each respondent was asked to select those of the above occupations in which they have a specialisation. As might be expected, many circled more than one occupation. As a result, the total percentage does not add to 100 (n = 481).

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Table 3. Immigrant day labourers: key characteristics % Country of origin (n=481) US Mexico Central America Other

1.3 77.5 20.1 1.1

% Nativity and legal status (n=481) Foreign-born Unauthorised

98.7 84.0

Educational attainment (n=481) Recency of arrival (n=479) No education 5.1 Less than 1 year 29.4 1–6 years 51.5 1–5 years 22.9 7–8 years 4.9 6–10 years 24.4 9–12 years 34.4 11–20 years 13.4 13+ years 4.2 20+ years 10.0 Mean 7.0 Notes: Central America comprises day labourers from El Salvador (7.2%), Honduras (2.9%), and Guatemala (10%).

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Table 4. Barriers to employment in the formal job market

Barriers Lack of documents Lack of English proficiency Pay rate is too low Few jobs available No specific job skill to market Lack of transportation/licence Too old Racial discrimination Employer abuses Other

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% 40.3 21.3 9.2 9.0 3.4 1.3 2.6 3.6 1.2 8.0

Table 5. Immigrant day labourers: earnings Estimated yearly income Mean Median Standard deviation

$ 8,489 7,200 5,064

Monthly wages January1999 (mean) Typical ‘good’ month Typical ‘bad’ month

568 1,069 341

Hourly wage Day labour Federal minimum wage State minimum wage Los Angeles LW

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6.91 5.15 5.75 7.25