Short of Workers, U.S. Builders and Farmers Crave More Immigrants

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Nationwide, the average wage of nonsupervisory workers in residential construction hit $25.34 an hour in January. That’s over 6 percent more than a year earlier, close to the steepest annual increase since the government started keeping track almost 30 years ago. {snip}

The gains are part of a broader trend. The tightest labor market in more than half a century is finally lifting the wages of the least-skilled workers on the bottom rung of the labor force, bucking years of stagnation.

But to hear builders tell it, the rising cost of their crews reflects a demographic reality that could hamstring industries besides their own: Their labor force is shrinking. President Trump’s threat to close the Mexican border, a move that would cause damage to both economies, only adds to the pressure.

Immigration — often illegal — has long acted as a supply line for low-skilled workers. Even before Mr. Trump ratcheted up border enforcement, economic growth in Mexico and the aging of the country’s population were reducing the flow of Mexican workers into the United States. The number of undocumented immigrants in America declined to 10.7 million at the end of 2017 from a peak of over 12 million at the height of the housing bubble in 2008, according to the Center for Migration Studies.

The problem for builders is that the recovery in home building has outpaced the growth of the construction labor force. {snip}

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Were it not for immigrants, the labor crunch would be even more intense. In 2016, immigrants accounted for one in four construction workers, according to a study by Natalia Siniavskaia of the home builders’ association, up from about one in five in 2004. In some of the least-skilled jobs — like plastering, roofing and hanging drywall, for which workers rarely have more than a high school education — the share of immigrants hovers around half.

The need for labor has set off a scramble for bodies that is spilling across industries and driving up wages. “A lot of our landscape companies are upset because their guys are coming into construction because they can earn more,” said Alan Hoffmann, who builds energy-efficient homes in Dallas.

For all the fears of robots taking over jobs, some economists are worrying about the broader economic fallout from a lack of low-skilled workers. And businesses across the economy are complaining that without immigration they will be left without a work force.

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The labor crunch is likely to persist for some time. The Pew Research Center projects very little growth in the working-age population over the next two decades. If the United States were to cut off the flow of new immigrants, Pew noted, its working population would shrink to 166 million in 2035 from 173 million in 2015.

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But the share of immigrants over 25 with less than a bachelor’s degree — the most likely to seek a job hanging drywall or spreading plaster — has steadily shrunk, to 70 percent in 2016 from 76 percent in 2000, according to the Pew Research Center.

Although the Trump administration has tried to shift immigration policy to limit the entry of less-educated immigrants and draw more workers with advanced degrees, businesses are still hungry for immigrants with lesser skills.

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Businesses scrambling for low-skilled workers provide a glimpse into the kind of strains a future of low immigration might bring.

Consider agriculture, where seven in 10 workers were born in Mexico, and only one in four was born in the United States. Last year, the United States issued nearly 200,000 H-2A visas for agricultural workers, three times as many as in 2012, as farmers tried to make up for the decline in the undocumented work force. Growers complain about the bureaucracy and costs associated with the visa program and worry that a government hostile toward immigrant work might decide to curtail it.

Some growers are resorting to other tactics, too. “We’re seeing a large transition of growing from California down to Mexico,” said Larry Cox, who farms in California’s Imperial Valley as well as in Sinaloa and Guanajuato in Mexico.

Builders would love to have some of those options. For now, the H-2B visa seems to be their only one. Though it wasn’t really designed for them, but rather to fill seasonal jobs outside of agriculture, builders are now scrambling to file H-2B applications, and they are lobbying Congress and the administration to get the Department of Homeland Security to double the allocation. The cap for the 2019 fiscal year was exhausted in February.

But builders know the H-2B visa won’t solve their problems. Many of the high school students who would replenish the pipeline of carpenters, plumbers and electricians are undocumented immigrants.

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