Beth Kowitt: Home Depot can't ignore its ICE problem forever

There is no company in the U.S. that has become more closely associated with Immigration and Customs Enforcement raids than Home Depot Inc.

In and around the retailer’s parking lots, masked and armed ICE agents chase and tackle and detain the day laborers who gather there to look for work.

Store employees who are upset by witnessing the grim scenes are allowed to go home for the day with pay — a tacit acknowledgment by Home Depot that the raids are violent and traumatic to watch.

You won’t find the company saying as much publicly. Instead, it’s consistently offered the same answer after each episode, attempting to distance itself from not only the raids but also the workers who are getting hauled off in unmarked vans from its property. When I reached out for this column, I got the usual stock response:

“We aren’t notified that immigration enforcement activities are going to happen, and we aren’t involved in the operations. We’re required to follow all federal and local rules and regulations in every market where we operate.”

The sweeps have put the company in the middle of one of the most polarizing issues in American politics, forcing it to weigh whether to defend the rights of the undocumented immigrants who serve its customer base or to stay quiet to avoid the ire of the Trump administration. It’s an all but impossible position, so it’s perhaps no surprise that, so far, the company has chosen the latter path. But that’s a mistake. And not just a moral mistake, but also a business one.

As the raids have continued, consumers have started to question whether the company’s silence makes it an accomplice to the sweeps rather than merely the backdrop. Demonstrations at Home Depot stores have amped up around the country in recent weeks, and The Bulwark has reported that a national boycott is brewing. The Home Depot raids are piercing the broader national consciousness, too, making their way into an Instagram post by comedian Chelsea Handler and a Saturday Night Live sketch.

All the signs are there: A backlash is coming for the company. But there are actions Home Depot’s management team could take to at least lessen the blow.

The first is simply to recognize the day laborers as an integral part of the Home Depot ecosystem. This would be a marked change in tactics; historically the company has claimed the workers are neither a Home Depot problem nor part of its business model.

There is no denying, however, that the company’s fortunes are tied with those of day laborers — a workforce that its rise helped create. Before Home Depot grew into one of the largest retailers in the country, contractors made much of their money by marking up the supplies they bought at wholesalers. Home Depot removed that profit source by giving everyone access to the same pricing. Labor costs then became the key variable, driving demand for just-in-time, cheap labor.

Home Depot became a place where contractors and homeowners could pick up not only supplies but also the workers who started to congregate at its locations. Whether the company admits it or not, day laborers are now a selling point of its stores — especially for the professional contractors, homebuilders and renovators it aggressively courted, and which now make up half its business.

The construction industry, already facing a labor shortage and chronically behind schedule, cannot function without these workers. Someone needs to paint the houses and install the flooring and the new sinks and tubs that all get bought at Home Depot.

And it’s the day laborers who take on the riskiest and dirtiest jobs that other people don’t want to do, says London School of Economics professor Paul Apostolidis. “They are not criminals or dangerous. They’re poor and lonely and stressed,” Apostolidis, who has closely studied day laborers, told me. “They are the ones who are routinely subjected to danger.” Home Depot, he notes, could simply say that.

After a raid at a Home Depot, employees are required to report the episode, which is recorded in a central database. These reports have not been shared outside the company. Day laborer advocate groups have asked for this data, and tell me that they see it as a way to deflate the climate of misinformation and fear the raids are designed to create. When and where the raids took place are simply facts, and the company should make them public.

Home Depot doesn’t have just data; it also has a lobbying apparatus that it knows how to deploy effectively when it wants to. In April, its Chief Executive Officer Ted Decker went to the White House with other retail CEOs to lobby against tariffs. In the past, it lobbied against the interests of day laborers, fighting an ordinance in Los Angeles that would require new home improvement stores to build centers for the workers.

It’s time now for the company to face reality and recognize that its fate is intertwined with day laborers and to start considering their interests. This doesn’t have to be a moral case. In August, Home Depot reported that sales were up 5% over the prior year period, although it missed analyst expectations. But there are signs it could have problems ahead. The chain does not publicly break out metrics by store, but The Bulwark reported that in Chicago, the site of several raids, sales at some locations are down 20%. We may have a better sense of whether the optics have started to hit the bottom line when the company reports again next week.

In Los Angeles, the company’s silence on the raids has led to pushback against a store it wants to build in Eagle Rock, a location that could be a major sales generator as the city rebuilds after the devastating wildfires. And beyond the financial upside, the store would be a chance for the company to tout its role — and the role of day laborers — in the recovery. That’s a much better association for any brand than ICE.

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This column reflects the personal views of the author and does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Beth Kowitt is a Bloomberg Opinion columnist covering corporate America. She was previously a senior writer and editor at Fortune Magazine.

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