And Then There Were None...

Immigration Policy Impacts on Construction

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Introduction

A cornerstone of the recent presidential election was to reduce illegal immigration. There are many issues, political and ethical, pro and con, that arise from that policy. For this article, let’s put those concerns aside and focus only on the impact these policies imply for labor market conditions facing the construction industry.

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Construction Worker Shortfall

The construction industry is amid an ongoing labor shortage. The shortfall challenges project timelines, budgets, overall efficiency, and the level of overall construction activity. Tight supply becomes more acute during May through September, when the building season is at its peak. Last year, during these months unemployment in the construction industry ran 50 basis points lower than national unemployment (3.6% construction versus 4.1% national).  

Adequate supplies of skilled tradesmen are among the scarcest. This includes electricians, plumbers and carpenters. While these areas are most scarce, the construction industry is multi-skilled dependent. Lacking adequate supply of labor in one area, even the least skilled, can holdup an entire construction project. Because undocumented workers account for a large portion of the workforce in some lesser skilled trades, immigration policies hold the potential of broadening the shortage of construction workers to include the so-called “unskilled.”

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