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Forbes
15 hours ago
- Business
- Forbes
Immigration Raids Deepen Construction's $10.8 Billion Labor Crisis
Building walls breaks industry. Protests erupt over President Trump's immigration crackdowns. (AP Photo/Damian Dovarganes) President Trump's fortune rose from building glitzy towers brandishing his name. His political star ascended by railing against illegal immigration. But construction, his original cash cow, leans on those immigrants' labor, whether they are documented, or not. Immigrants make up 34% of the construction workforce, according to the Associated General Contractors of America. In states like California, Texas, New Jersey, Florida, Georgia and New York, they account for about half. Construction drives 4.5% of U.S. gross domestic product, making it the country's tenth largest industry. Broaden the view and the impact grows. Residential housing, once you include rent and utility payments, fuels 15 to 18% of GDP, according to the National Association of Home Builders. Add commercial building to the mix and construction rises to the top of the chart. That reliance on foreign born workers is now a growing risk. The trades were already short on workers, with too few young people entering the field to meet demand. Immigration and Customs Enforcement (ICE) raids are making the gap worse. Builders across the country are bracing for deeper shortages, higher costs and delayed projects. The pain will not be spread evenly. Big firms with market clout will find ways to adapt. Small builders and contractors may not. The roots of the construction labor shortage run deep. 'We lost about a million and a half workers during the Great Recession,' says Robert Dietz, chief economist at the National Association of Home Builders (NAHB), a trade group that represents builders of single-family and multi-family housing. Many of those workers left the industry and never came back. Since then, fewer young people have entered the trades, with more choosing college instead. Competition from other industries, including a fracking boom in the mid-2010s, pulled more workers away. Meanwhile, productivity growth in construction has lagged far behind the rest of the economy, leaving builders trying to do more with fewer hands. What we've ended up with is 'a persistent shortage of workers,' Dietz says, and longer build times that are, according to a recent Home Builders Institute study, already adding $10.8 billion in costs to the market each year while reducing single family home construction by 19,000 units in 2024 alone. Yet, even as the industry struggles to attract enough workers, construction offers wages that outpace many comparable fields. 'Construction is not low paying compared to other jobs that require the same education or training level,' says Ken Simonson, chief economist at the Associated General Contractors of America. On average, construction workers earn about 19% more than other production and non-supervisory workers, Simonson says, a gap that has widened in recent years as firms compete for scarce labor. High wages, however, do little to ease the disruption caused by worksite ICE raids. Small builders are already feeling the strain. David Knott and Saul Alvarez, co-owners of San Francisco Remodel, said the crackdown has shaken their workforce. Three workers they had hired in the past were recently deported. The fear has spread across their job sites. Some workers now avoid certain tasks or stay home. Knott and Alvarez say they do their best to check paperwork and keep everything above board. But even workers in good standing during the Biden administration are getting swept up. The result is fewer available workers, higher prices and growing delays. 'Mexico is the backbone of construction throughout the U.S.,' Knott says. 'It's impossible to do what we used to do, there's a scarcity in terms of finding guys.' One reason the industry leans so hard on undocumented labor is that there are few legal pathways to bring in foreign workers. But unlike agriculture, which has a well-established visa system for seasonal labor, construction lacks a comparable program. That gap has left the industry exposed. When enforcement ramps up, there are few options for replacing the workers who disappear. This is why the National Association of Home Builders is pushing for immigration reform. The group wants a new visa program for construction workers, with limits set by market demand, not fixed caps. It also supports pathways to legal status for workers already on the job and opposes rules that would make builders liable for the immigration status of their subcontractors' employees. The goal is to secure the border without gutting the workforce needed to build the country's housing. But until then, homeowners and builders alike will be left competing for fewer workers. Some of the trades most likely to show up on your job site rely heavily on immigrant labor. According to the Associated General Contractors of America, 61% of plasterers and stucco masons, 61% of drywall installers and 52% of roofers are foreign born. More than half of painters are too. The numbers drop in more regulated trades. Just 16% of electricians and 18% of plumbers are immigrants, in part because these jobs require licenses. But for much of the work that gives a house its character, the labor pool could shrink fast. The big public single-family homebuilders aren't immune. In response to heightened rhetoric about mass deportations during the 2024 presidential election, three of the largest public homebuilders warned investors about the risk. PulteGroup ($20.9 billion market capitalization), Lennar Corporation ($29.5 billion) and Toll Brothers ($10.9 billion) all added language about immigration enforcement to their most recent annual reports (none of the three responded to requests for comment). Each relies heavily on subcontractors for labor. All three said tighter immigration enforcement could shrink the pool of skilled tradespeople, push up labor costs and slow projects. PulteGroup identified it as a 'material risk.' Lennar flagged the potential for 'widespread deportations' and legal exposure tied to subcontractors. Toll Brothers warned that labor shortages could affect the skilled workers it needs for high-end homes. These warnings are new. None of the companies had included them in prior filings. However, some analysts covering the industry don't see an imminent problem. 'Builders don't actually build the homes. They use subcontractors,' says Jay McCanless, senior vice president of equity research at Wedbush, covering homebuilders and building products. Builders expect subs to follow state rules on verifying workers, but can't guarantee it happens every time. Crews have been raided at sites in California, Florida and elsewhere. Even so, McCanless says today's enforcement is nowhere near the scale seen under the Obama administration in 2009 and 2010. Builders weathered that storm, helped by the collapse in housing demand after the Great Financial Crisis. This time, they may catch another break. The slowdown in multi-family construction is freeing up more crews. The risk may grow, and already the stocks of home builders have suffered. Year-to-date, Lennar's stock is off 17%, Toll Brother's is down 14% and Pulte is down 6%. The S&P 500 has gained 3.3% year to date. They may get another break yet. Even President Trump is hearing from business owners about the risks of losing workers. In a June 12 post on his Truth Social account, Trump acknowledged complaints from farmers and hotel operators who say immigration enforcement is taking away long-time workers and leaving jobs hard to fill. He blamed the Biden administration for letting in 'criminals' who are now applying for those roles, and said, 'Changes are coming.' By the end of the weekend, President Trump was seemingly backing down on the worksite raids targeting those industries, saying that they were 'taking very good, long time workers away from them.' A memo was subsequently sent out to ICE field offices to turn their attention away from such raids and to avoid arresting undocumented workers who aren't suspected of engaging in other crimes like drug dealing or human trafficking. For now, it isn't clear what those changes will mean for construction. But the industry, unlike politics, runs on labor, not slogans. Without workers, no one is pouring concrete in Trump developments or anywhere else. More from Forbes
Yahoo
26-03-2025
- Automotive
- Yahoo
Nevada bill proposes traffic cameras at construction sites
LAS VEGAS (KLAS ) – Nevada lawmakers discussed a bill Tuesday that would bring automated traffic enforcement cameras to road construction sites. Red light cameras coming to Las Vegas? Lawmaker wants exception that would allow them People who spoke in favor of the bill emphasized that it would protect the lives of construction workers who witness cars whizzing by at high speeds. People who spoke against it claim surveillance concerns and increased risk of crashes. The bill states that cameras would only be in use while construction workers are present, when the zone closes, the cameras shut off. If caught by one of the cameras, you'd face a citation, but not a moving violation so there would be no points on your license. Citations would be issued to the registered owner of the car. Democratic Assem. Selena Torres-Fossett introduced the bill, speaking before the Nevada State Assembly Committee on Growth and Infrastructure alongside Alexis Motarex with the Nevada chapter of the Associated General Contractors. Motarex says that there have been thousands of crashes in work zones within the past five years. 'These aren't just statistics to us. They represent real people our friends, our family members, our neighbors who deserve to go home safely at the end of the workday,' Motarex said. Erin Breen with UNLV's Road Equity Alliance Project says it is just one of multiple bills aimed at putting traffic enforcement cameras into the Silver State. 'We're going to see several bills introduced this session that will allow, for the first time, the state of Nevada, various entities, and agencies to collaborate to establish a safety camera of some sort or another with the full intent of saving people's lives,' Breen said. For the bill to move forward, lawmakers need to vote it through to a second hearing. That vote will happen at a future meeting of the Nevada State Assembly Committee on Growth and Infrastructure. The cameras would need to go through a testing 'pilot program' that proves their effectiveness before going state-wide. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
