They are not the same issue. But in our business they're issues it's hard to separate from one another, especially in the places in the country where home building volume is highest, where construction cycles are the hardest to predict, and where costs to complete parts of those cycles are practically impossible to nail down.
Construction labor. Immigration.
As the fate of the Deferred Action for Childhood Arrivals program remains in the throes of a high-drama, politicized, precarious limbo of debate in court, Capitol Hill, and the White House, and as workplace raids by federal agents become more commonplace around the nation, the relationship between construction labor capacity and immigration becomes more tenuous by the day.
At the same time comes new evidence of why this matters from National Association of Home Builders assistant VP for Policy Research Natalia Siniavskaia, Ph.D., who this week shows analysis that almost one in four US construction laborers in the workforce is an immigrant. Dr. Siniavskaia notes, citing American Community Survey data that the percentage of immigrant workers is rising--not falling--and rising because non-immigrant "native-born" workers' share is declining.
The data show that during the Great Recession, almost 1.7 million native-born workers left the construction workforce, and since the recovery began, a net gain of just 200,000 native-born workers have re-upped in construction jobs.
Meanwhile, there are also fewer immigrants among construction workers in the US--200,000 or 5% less--than there were in 2007, their total number today exceeds 2.5 million, and they represent a greater share than ever before. Siniavskaia notes:
The flow of new immigrants into the construction work force is also significantly slower compared to the housing boom years. Less than 60,000 new immigrants entered the construction industry in 2015. In comparison, over 130,000 new immigrants were joining the construction labor force annually in 2004 and 2005.
At the same time, here from another NAHB senior economist Ashok Chaluvadi, is a ranking of 10 pain points--worst to least-worst--builders say they face as 2018 gets underway. Caluvadi writes:
Topping the list of problems builders faced in 2017 and expect to face in 2018 is the Cost/Availability of Labor, a significant issue for 82% of builders in 2017 and one that has significantly grown in importance since 2011. That year, 13% of builders rated labor as a significant problem, followed by 30% in 2012, 53% in 2013, 61% in 2014, 71% in 2015 and 78% in 2016.
So, on the one hand we see data that fewer "native-born" workers are returning to the construction workforce, intensifying the industry's dependence on immigrant labor, and on the other--as bigger and bigger questions and risks loom over the fate of immigrants in the United States--worries over the ability to meet labor capacity needs at predictable costs spiral upward.
The NAHB has a position on this issue, and it was expressed by then-chair Granger MacDonald last Fall, when the Trump administration called for the end of the DACA program, and asked Congress to replace it with a new one for immigrant "Dreamers."
“President Trump’s call to Congress to find a permanent legislative solution to protect the ‘Dreamers’ underscores the urgent need for lawmakers to pass comprehensive immigration reform. Given the chronic shortage of residential construction workers, there has never been a more critical time for Congress to enact effective reforms that would help revitalize the economy and boost the housing sector.
“NAHB believes that any comprehensive reform should protect our nation’s borders; include a new, market-based visa program that would fill labor gaps to ensure that the nation has a workforce that is sufficient to meet its housing construction and restoration needs; and provide a workable employment verification system. A successful guest worker program will help alleviate the current labor shortage in the residential construction sector, quicken the rebuilding efforts in Texas and support the overall economic growth of this nation."
Executives at some of the larger home building organizations don't hold out much hope for progress on a "guest worker program," but they sure would like to see steps in the right direction on the issue. Not the wrong direction.
