Construction Industry Needs Workers. How about Hiring Immigrants?

Dec 14, 2012

Photographer: Eddie Seal/Bloomberg.

Companies in the construction industry are in a conundrum. Just when things are picking up, they’re having trouble finding workers. USA Today reports:

Nationally, building-permit applications for homes and apartments this year are up 31% over 2011, though they're still well below average and the mid-2000s peak, according to the Census Bureau. Builders are finally responding to record low new-home inventories, historically low interest rates and a modestly improving job market. All construction spending, including commercial and government, in September was up 14% from the market bottom in February 2011.

Construction payrolls are virtually unchanged from two years ago at 5.5 million. Contractors are coping with the added workload in part by paying employees more overtime, says Ken Simonson, chief economist of Associated General Contractors of America.  Some companies are being cautious following a brutal slump, but others report that they can't find workers in some critical skills, especially in the commercial construction sector.

For North Carolina's Wayne Bros, job openings “stay open three to six months, forcing the company to accept about 25% fewer jobs than it can handle.” And in five years, “there could be a shortage of 2 million commercial construction workers, according to the Construction Users Roundtable, a trade group.”

It’s a strange situation to hear reports of unfilled jobs in an economy with national unemployment at 7.7%.  For construction overall, there are about a million recent workers in the industry who are unemployed, but construction work is varied in terms of both trades and locales.  Training new workers in some trades requires months or years, and the temporary nature of construction projects can be a barrier to geographic mobility for workers with families. 

During the construction boom that peaked around 2006, immigrant workers helped fill the job gaps for many skilled trades.  In October 2006, non-citizen foreign born workers comprised 19.1 percent of total employment in construction, according to data compiled from the monthly Current Population Survey conducted by the Census and Bureau of Labor Statistics. 

As construction work declined during the recession, employment of these foreign workers fell faster than employment of citizens, and today (October 2012), foreign non-citizens account for just 16.7 percent of the total employment in construction.  Over the past six years, 765,000 non-citizens disappeared from the construction industry employment count.  These foreign workers accounted for 26.9 percent of the post-boom loss of construction industry employment between October 2006 and October 2012. 

Anecdotal evidence suggests that many citizens with critical skills, who were laid off from construction after 2006, have settled into new jobs in other industries and they may be reluctant to return to the ups and downs of construction project work now, even if openings are growing and pay is improving.  For the hundreds of thousands of foreign workers who left construction employment, it can be suggested that many who brought their construction skills here for temporary opportunities may have gone back to their home countries. 

One way of easing some of the labor shortage in critical construction trades could be a temporary worker program to allow foreign-born workers to return to the United States to fill openings. Immigrant workers make sense because they already have desired skills and can fill critical needs more rapidly than local workers can be trained; and when projects end, and demand eases, they can return to their home countries.

Just when construction appears to be coming out of its doldrums it could be held back because of a lack of workers. Immigration reform that includes a temporary worker program for construction work would help support an industry that’s trying to climb out of the deep economic hole it fell in.

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