My guess is you run an honest business and don't knowlingly hire illegals and pay cash with no questions asked. Not every business is run like that. As a caller to a local radio station said last week, the $2.00 per hour (not square foot) is a very livable wage for him because they have 20 people living in one house and pool their money. He said it is a lot more than they could ever make in Mexico. Now, admittedly, I don't know this guy. He could be lying for all I know, but the host of the show knows him and believed he was telling the truth.
I've also had people I know personally, tell me they have lost construction jobs because they won't work for below minimum wage.
The radio caller could have been confused on the issue then.