A look at foreign labor in construction

A look at foreign labor in construction

by ALEXIS CHASTAIN  |  November 29, 2016

President-elect Donald Trump’s controversial campaign statements on immigration have left people questioning the future for immigrant workers in the U.S. But the deep-rooted opinions on the matter have long caused conflict in this nation of immigrants. While some embrace the fact that foreign laborers offer a service at a price that can’t be matched, others still condemn it as exploitation.

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Sources: Share of Unauthorized Immigrant Workers in Production, Construction, Pew Research, 2015; International Migration and the United Kingdom, Prof. John Salt, 2012; Office for National Statistics, July 2016; International Labour Organization, 2014

This issue is no stranger to the construction industry. In a report produced by the Pew Research Center in 2015 — Share of Unauthorized Immigrant Workers in Production, Construction — it was estimated that nearly 15 percent of unauthorized immigrants living in the US work in construction and extraction. That’s more than 1.2 million people, or the total population of Dallas. This also means they make up 14% of the construction industry’s workforce.

Conflicts around immigrants in the workforce disturb the UK, too. There, 13% of the construction industry is made up of foreign nationals, or people who are nationals in another country. 

The “levels of immigration the UK [has experienced]” was one of the core reasons the UK decided to make a break with the EU in June 2016, said Ros Kellaway, a partner at international law firm Eversheds. Many natives felt foreigners, especially EU workers who enjoyed free movement among EU countries, took their jobs and drove wages down. 

George Borjas, a Harvard University economist specializing in immigration, also believes immigrants hurt the economic prospects of the natives they compete with. In the 2016 edition of his textbook Labor Economics, Borjas writes that the more workers we have from abroad, the lower the wages for Americans, which means fewer natives are able to take those jobs. 

An economist at UC-Berkeley, David Card, came to a different conclusion. Since publishing The Impact of the Mariel Boatlift on the Miami Labor Market in 1990, his research has continued to ask the question “how is the US able to absorb immigration so easily?” In other words, Card has found that the level of immigration surprisingly doesn’t affect unemployment or natives’ wages — it simply shifts the curve out. 

Dr. Matthew Foulkes, a geography professor at University of Missouri who teaches on migration and population geography, said it’s his impression “that the majority of economists are on the side of Card and not Borjas.” 

Studying works of scholars who’ve written on the economics of migration, Foulkes has found that “immigrants don’t exactly replace native workers.” Instead, in immigrant-heavy sectors, the labor structure changes. “A good example of this is in the construction sector,” he said. When firms hire more foreign workers who don’t speak English or have driver’s licenses, they’re inclined to bring on more “native-born middle-level managers, foremen, drivers, and other staff to manage their immigrant labor pools.”

English economist John Philpott agrees. “As long as the economy is growing, increased migration actually increases employment,” Philpott said. “Migrants fill vacancies that might not otherwise be filled and encourage businesses to create jobs that might not otherwise exist.”

The trend in US unemployment seems to also support the idea that immigrants in the workforce positively affect the employment rate. 

In the mid- to late- 2000s, unauthorized immigration in the US was at its highest, as found in Share of Unauthorized Workers in Production, Construction. During this time, the number of construction jobs was also at its highest. 

Over the next five years, the amount of foreign immigrants decreased by 23%. US construction employment fell by 15%, losing more than 1.4 million members in the workforce. 

The decline in foreign labor couldn’t solely be the cause for a decrease in jobs. In the late 2000s, the US experienced the worse economic crisis since the Great Depression. One of the largest industries hit — construction. 

Since 2012, employment in the industry has dramatically increased. The Bureau of Labor and Statistics found the number of people employed in construction is at its highest since December 2008. 

Although opportunity is high, general contractors have continuously seen a shortage in labor. In a 2016 market study by the Associated General Contractors of America (AGC), over two-thirds of construction firms found it difficult to fill jobs.

So… is it possible to continue growing the economy and building without help from outside neighbors? The International Labour Organization (ILO) in 2014 found that migrant workers make up 95% of construction and domestic work in the Gulf States (Iraq, Saudi Arabia, Oman, UAE, Qatar, Bahrain, Kuwait). Therefore, it would seem as though Dubai and the surrounding areas wouldn’t exist without the help of foreign labor. 

“The demand gets met by low-skill immigrant labor.”

— Dr. Matthew Foulkes, University of Missouri

But what about the UK? What about the US? The percentage of foreign construction workers in those two regions doesn’t compare to the amount working in the Gulf States. Still, could — or would — native-borns fill the jobs if all the migrant workers left? 

Foulkes leans towards no. 

“Post-industrial nations, such as the United States and the UK, have bifurcated economies that feature high paying jobs that require lots of training and education and low paying jobs that are more unstable,” he said. “As education levels rise for native-borns, these countries develop a chronic need for low-skill labor that is not met by the shrinking pool of lower skill native-born workers. The demand gets met by low-skill immigrant labor.” 

Subsequently, once this happens, Foulkes explained, the industries become reliant on foreign labor, and the jobs “get stigmatized and known as ‘immigrant jobs.’” As a result, natives avoid these positions because of their social status. 

There are still many communities out there who believe the contrary. The Federation of American Immigration Reform, FAIR, has a page dedicated to “Illegal Aliens Taking U.S. Jobs.” In the text, the unlisted author called the assertion that immigrant workers only take jobs unwanted by U.S. workers “patently false because they are working in jobs U.S. workers are also employed."

Richard L. Trumka, AFL-CIO president, speaking on labor reform at the White House in 2013.

For its part, organized labor has taken a different approach. Instead of dwelling on whether or not immigrants take the jobs of natives, the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), which represents the North American Building Trades Unions (NABTU), now is pushing for an easier work-visa and path-to-citizenship processes. "For America to work, hard work must be fairly rewarded," said AFL-CIO president Richard L. Trumka. "We don’t want a bunch of useless hurdles to citizenship.  We want a simple system that works, a wide path that leaves nobody behind."

Less than 24 hours after the recent US election, AFL-CIO's Building Trades Unions issued this statement: “[We] stand ready to work with President-elect Trump, as well as with the leadership and lawmakers of both political parties to cast away left-over animosities from this past election cycle, and to begin anew in fashioning a productive and prosperous path forward for all Americans.”

That path, of course, is one that we all want to pursue. But it now remains to be seen how many of our neighbors will be able to join, and in what capacity, if any, will they still be allowed to contribute.