February 27, 2024

Immigrants help make up for the labor shortage which has plagued the construction industry since the beginning of the pandemicaccording to a new analysis from the National Association of Home Builders (NAHB). Foreign-born American workers composed a record 25% of the construction workforce last year, when the sector attracted the most new immigrant workers since the housing boom of 2005-06.

Immigrants also work more, period. Labor force participation among foreign-born workers has surpassed pre-pandemic levels, while non-immigrant workers are still catching up.

Why are more immigrants working in construction?

A hot job market in 2022 and 2023 likely meant that nonimmigrant workers were drawn to other industries that are less physically demanding, according to Erica Groshen, senior economic adviser at Cornell University’s Institute for Compensation Studies and former commissioner of the U.S. Bureau of Labor Statistics (BLS).

“So [if] people get more opportunities elsewhere, then you have fewer native people applying for those jobs,” Groshen said. “[US-born] people have opportunities that will earn them more money or be less dangerous.” This means more jobs are available for immigrants to fill.

Hazards for Foreign-Born Construction Workers

Immigrants are more likely to be injured or die on the job. In 2021, for example, immigrant Latino workers—both documented and undocumented—made up 8% of the US labor force, but 14% of work-related deaths and 27% of construction-related deathsaccording to the BLS.

That’s partly because immigrant workers have less access to union-run construction apprenticeships, which offer more training and education, said Ligia Guallpa, executive director of the Worker’s Justice Project in New York City. Instead, most find their way into construction as gig workers or day laborers.

“Being the least trained workforce, most of them are more vulnerable to accepting the most dangerous conditions on the job sites,” Guallpa said.

What the construction labor shortage means for the economy

While more immigrants worked in construction last year, the industry has yet to fully recover from its persistent labor shortage. The employment rate remains slightly higher than its 2019 level.

“Compared to peak employment levels of 2006, construction is short 525,000 native-born workers [as of 2022] and new immigrants only partially close the gap,” wrote Natalia Siniavskaia, a researcher and economist for the NAHB.

The sector’s labor shortage has widespread implications. A pressure on labor in the industry will make it harder for the US to complete projects funded by the Bipartisan Infrastructure Act passed in 2021. With fewer workers, projects are delayed and employers fill positions with less qualified workers to close the gap, reduce quality of the finished product.

But the tightening labor market is good news for workers’ wages and bargaining power. Average US construction worker wages increased by 5% in 2022-about one percentage point more than for the overall workforce, according to the Association of General Contractors. Wages are expected to rise by 4.4% by year-end in 2023.

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