Immigrants have become an increasingly crucial component of the US construction labor force, addressing the persistent labor shortage that has plagued the industry since the onset of the pandemic, as indicated by a recent analysis by the National Association of Home Builders (NAHB). In the past year, foreign-born US workers accounted for a historic 25% of the construction labor force, marking a significant surge in immigrant involvement not seen since the housing boom of 2005-06.
Moreover, immigrants are putting in more hours on the job. Labor force participation among foreign-born workers has exceeded pre-pandemic levels, while their non-immigrant counterparts are still catching up.
One contributing factor to this trend, according to Erica Groshen, a senior economic advisor at Cornell University’s Institute for Compensation Studies and former commissioner of the US Bureau of Labor Statistics (BLS), is the robust labor market in 2022 and 2023. Non-immigrant workers were enticed by less physically demanding opportunities in other industries, leading to a reduced pool of native-born applicants for construction jobs. This shift in employment choices has left more positions available for immigrants to fill.
However, it is important to acknowledge the challenges faced by foreign-born construction employees. Statistics from 2021 reveal that immigrant Latino workers, including both documented and undocumented individuals, constituted 8% of the US labor force but accounted for 14% of job-related fatalities and 27% of construction-related deaths, as reported by the BLS. Part of this disparity can be attributed to immigrant workers having limited access to construction apprenticeships administered by unions, which provide more comprehensive training and education. Instead, many immigrants enter the construction sector as gig workers or day laborers, often exposed to hazardous working conditions.
While the presence of immigrants in the construction industry has increased, the sector has not yet fully rebounded from its persistent workforce deficit. The job openings rate remains slightly higher than the 2019 level.
Natalia Siniavskaia, a researcher and economist for the NAHB, highlights that when compared to the peak employment levels of 2006, construction is still short of 525,000 native-born workers as of 2022, and new immigrants can only partially fill this gap.
The workforce shortage in the construction sector has far-reaching implications, affecting the completion of projects funded by the Bipartisan Infrastructure Law passed in 2021. The shortage leads to project delays and employers resorting to hiring less-qualified workers to bridge the gap, ultimately compromising the quality of the final output.
On the bright side, the tightened labor market has positive implications for worker pay and bargaining power. The average wages for US construction workers saw a 5% increase in 2022, approximately one percentage point higher than the overall workforce, according to the Association of General Contractors. Wages are expected to continue rising, with a projected 4.4% increase by the end of 2023.
