Panama Construction vs. US Consruction: A Study Comparing Odebrecht to Hensel Phelps
Joshua Sanford
ABSTRACT:
Panama’s location has played an important part of its history as a center of trade in the Americas. With Panama’s dollar-based economy, they offer low inflation compared to other countries. In this paper, an examination of a Panamanian construction company will be conducted. The paper will primarily emphasize Odebrecht, Panama’s largest infrastructure company. I will be visiting Odebrect personally to gather information about this company, along with internet research to support my case study. My case study will focus on the use of foreign employees of the two companies. I do expect that the use of foreign employees will differ between the two companies. As a construction management student, I saw first hand how a foreign construction company operates and uses these employees.
INTRODUCTION:
By definition, construction is “the way in which something is built or put together.” (construction). The construction industry is very important to economies everywhere. More construction is a natural outgrowth of a strong economy, as people with more disposable income build nicer and newer dwellings for themselves or their businesses, or the government builds or renovates public buildings. Additionally, the construction sector of the economy uses materials from so many other economic sectors that it has ripple effects across the greater economy.
The construction industry in the United States has long been separated by public versus private interests. Government contracts make up a large portion of the construction industry’s works. From roads and bridges to sewer systems, local county offices, and public schools, American taxpayers fund huge construction projects every year. Private construction projects consist almost wholly homes and businesses.
The United States and Panama, as well as nations across the globe, have issues between citizen and non-citizen workers. Foreign workers are especially prevalent in the construction industry (Labor Force Characteristics…). In the United States, there is a significant population of undocumented workers, many who come from Mexico and Central America. It is estimated that about 11 million undocumented workers currently reside in the United States (By the Numbers: How America tallies…). These are more likely to work in the construction industry than most others (Labor Force Characteristics…).
Panama has foreign workers law which caps the percentage of workers that can be foreigners. These foreigners do not include undocumented workers, which—if there are any at all—would not be counted for government purposes. Instead, the foreigners are in Panama legally.
Figure 2
INFORMATION/DATA COLLECTION APPROACH
For this research paper, information was primarily obtained through the internet or learned while on location in Panama. Topics searched and discussed include the foreign and native employees. Table 1 below displays the keywords used in internet searches.
Table 1
KeywordsOdebrecht
Hensel Phelps
Construction in Panama
Construction in US
Business in Panama
Business in US
Foreign Employees in Panama
Foreign Employees in US
Illegal Workers in US
For the interview segment of the research, I went to Odebrecht Infrastructure in Panama to interview Mario, an Odebrecht Project Engineer, and I also toured Casco Viejo. I used my iPhone to take both pictures and video of the interview and tour. Table 2 is a list of question that was asked.
Table 2
Interview Questions1. What percent of Odebrecht are foreign employees?
2. Do you feel that the foreign labor percentage is putting Panamanians out of work?
3. What is the benefit of hiring foreign employees in Panama?
Figure 3 shows the tool used to gather information and data in Panama.
Figure 3
Figure 4 and Figure 5 show some of the restoration work being conducted in Casco Viejo.
Figure 4
Figure 5
CASE STUDY:
Odebrecht is a Brazilian company that operates in numerous countries around the world, one of their offices in Panama. Figure 6 shows the location of the Odebrecht office in Panama (Google Maps.)
Figure 6
Odebrecht is located in Panama City. It has 159,036 employees. A Brazil-based company, Odebrecht does business in the markets of construction, engineering, chemical, and petro-chemical.
Based on information obtained during the interview, Odebrecht, by law, is able to hire up to twelve percent foreign employees. The purpose of that is to draw foreign companies to Panama and, thus, provide jobs for natives. Some Panamanians see the growth of foreign workers adversely. In one survey, eighty percent of natives opposed bringing in foreign workers. Panamanians see this as stealing jobs from locals (Americans in Panama).
The headquarters for Hensel Phelps Construction is located in Greeley, Colorado. Figure 7 shows the location of the Hensel Phelps Construction headquarters (Google Maps.)
Figure 7
Hensel Phelps employs 2,727 people as of 2008 (Hensel Phelps Construction). Of these, none would be considered illegal immigrants, though some may be aliens with legal status. The bulk of Hensel Phelps’ construction is contracted out to sub-contractors.
As opposed to Odebrecht, Hensel Phelps may hire as many and whatever percentage of foreign workers it chooses, as long as they are legally in the United States. The U.S. has no law limiting the hiring of legally foreign workers.
Many construction companies in the U.S. hire undocumented workers because they are less expensive to pay, and a company wouldn’t have to pay taxes on them(Illegal Aliens Taking U.S. Jobs). From internet research, the reason for U.S. construction companies being able to hire an unlimited percentage of foreign labor is probably a legal one, though this has not been litigated because such a law has not been passed, according to Noah Sanford, a law student (Personal Interview).
RESULTS/RESULTS IMPACT:
Similarities & Differences
Both Odebrecht and Hensel Phelps are able to hire foreign workers. They are each forced to conform their practices to their government’s regulations. In Panama, these regulations include a cap of twelve percent on foreign workers. In the United States, however, no cap exists. Many construction companies hire undocumented workers. But because it is a crime to hire these, companies do no report these, and thus, no reliable data exists.
Table 3
Differences between Odebrecht and Hensel PhelpsCriteria / Hensel Phelps (US) / Odebrecht (Panama)
Countries of Operations / 0 / 60
SUMMARY
Odebrecht and Hensel Phelps are two similar construction companies, although they are situated in two very different nations. Their countries’ laws dictate how they run their businesses, though, including what types of workers may be hired. Data was collected through internet sources and by a personal trip to Panama. Both companies likely rely upon foreign laborers to enhance their work operations. Odebrecht hires foreign employees, to draw foreigners and foreign companies to Panama. In the case that Hensel Phelps would hire undocumented workers, it would be for cheaper labor. In both of these cases, natives are being put out of job by foreigners. I believe that my research will benefit the companies in the construction market. I enjoyed my experience traveling to Panama, and learning about the different kinds of foreign businesses.
WORKS CITED
“Google Maps.” www.maps.google.com
Noah Sanford. Personal Interview. July 2013. Collins, Mississippi.
“Illegal Aliens Taking U.S. Jobs.” http://www.fairus.org/issue/illegal-aliens-taking-u-s-jobs
“By the numbers: How America tallies its 11.1 million undocumented immigrants.” <http://nbcpolitics.nbcnews.com/_news/2013/04/11/17691515-by-the-numbers-how-america-tallies-its-111-million-undocumented-immigrants?lite
“Labor Force Characteristics of Foreign-Born Workers Summary.” http://www.bls.gov/news.release/forbrn.nr0.htm
“Americans in Panama.” http://www.panama-guide.com/jobs/s
“Hensel Phelps Construction.” http://en.wikipedia.org/wiki/Hensel_Phelps
“Odebrecht.” http://en.wikipedia.org/wiki/Odebrecht
“construction.” http://www.thefreedictionary.com/construction
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