Features: Issues & Trends — March/April 2006

Industry Facing a Labor Crisis

Immigration Reform

As Hispanic workers fill voids, AGC supports a verification system administered by government, not employers

By Mary Buckner Powers

About 20% of the overall U.S. construction work force is foreign born. About 17% of foreign born Hispanics work in the construction industry. Photo © Jim Brady

During construction of the $2.7-billion international terminal and train system at the Dallas-Fort Worth International Airport, 54% of the 14,272 workers on the job were Hispanic, and 6,000 of them did not speak English.

Depending on the part of the country they represent, general contractors commenting on the number of Hispanic workers on the north Texas job said, "that's astonishing," or "I'm surprised there weren't more."

No doubt, Texas is on the leading edge of the concentration of immigrant workers in construction, but it is a dramatic illustration of how the industry is changing. "That wave won't wash up on every state," says Ken Simonson, AGC's chief economist. "But it's what many parts of the country will be experiencing."

About 20% of the overall U.S. construction work force is foreign born, with Hispanic immigrants filling about 40% of the new construction jobs created in 2004. "Most of the recent influx of Hispanics are in the construction industry," says Rakesh Kochhar, associate director of research for the Pew Hispanic Center in Washington, D.C.

Of the 2 million foreign-born workers in the construction industry, more than half are unauthorized. About 17% of all unauthorized workers in the country are in the construction industry. That's 1.1 million workers in a total work force of 10 million, Kochhar says.

"We have something here that 's very appealing to people in Third World countries-jobs," says Steve Sandherr, AGC's CEO.

What's overlooked in the debate is that Hispanic workers are not a drain on society, he says. They do what's necessary to succeed in this industry. They show up on time and are drug free. "They do it consistently, they support their families and they pay taxes," he says.

In Texas, a reduction in the number of Hispanic construction workers would either slow jobs down or increase the cost immensely, says Jack Dysart, president of Lyda Swinerton Builders, San Antonio.

"We would have to pay a large wage to attract people into the business," says Dysart, whose craft work force is majority Hispanic. "We're just not creating the craft workers here like we used to."

Dysart and others in the industry say the best way to look at immigration reform is to develop a way to bring in skilled workers and give them the opportunity to become citizens or legal aliens.

Border security and enforcement are only two of the many components of reform, says Kelly Knott, director of AGC's congressional relations for human resources and labor.

A bill calling for penalties against employers who employ illegal workers, which passed the U.S. House of Representatives in December, was strictly a border enforcement and security bill, says Knott. "It includes a $25,000 fine for a paperwork violation," she adds. It also makes employers the enforcers by requiring them to verify the status of all new hires and current employees.

"We need some level of enforcement, but we can't do that without addressing labor needs," Knott says. As Knott sees it, the bill passed because a vote against it was seen as a vote against border security.

Now, AGC and other associations that represent the construction industry are working with the U.S. Senate to develop a more comprehensive reform measure. One of the most important issues is to find a legal channel for workers to come to the U.S. and fill jobs not filled by native-born Americans.

Seeking Answers

The construction industry has many programs for young people to promote interest in construction jobs. In Texas, the Construction Education Foundation of North Texas, a partnership of AGC, American Builders and Contractors and the American Subcontractors Association, had 3,300 students enroll in craft classes in the 2004-2005 school year.

Nearly 50% of the students were Hispanic, says Jim Jordan, former chairman of the foundation's board. "Every year the percentage of Hispanics gets bigger," he says.

That's because Hispanics are helping to fill the labor void in many trades where the average age of craft workers who are U.S. citizens is getting older. Add to that the fact that construction employment was up 5% in 2005, and already there is a projected work force shortage in some areas of the country.

Contractors in San Antonio began to feel the squeeze last year. The availability of skilled and unskilled workers dropped after hurricanes Katrina and Rita hit in August and September.

"The issue is the need for additional labor," says Rene Garcia, director of the commercial building division for Zachry Construction Corp., San Antonio. "Should we get it from Mexico and who's [going to be] responsible to see that the workers are legal and tracked."

Worker Visas

AGC wants to see a new worker visa that would allow people from other countries to come to the U.S. to fill skilled and unskilled jobs that citizens are not taking.

"Our critics accuse us of only wanting cheap labor," Knott says. "Construction workers are earning $19.65 an hour. We're not looking for cheap labor."

The new visa program should include 400,000 new visas the first year with a three-year authorization and an option to extend it to six years, Knott says. During that time the worker could apply for citizenship. The visa status would terminate if a worker were not employed for 45 days.

The most politically challenging part of the issue is dealing with the undocumented workers who are already here. "The round-them-up-and-ship-them-out policy hasn't worked," Knott adds. "But we need to get them out of the shadows for national security reasons."

AGC does not advocate amnesty, but it does want to allow the workers who have jobs to stay. "They should pay a fine and develop citizenship skills," Knott says. "Otherwise, taking 11 million people out of our economy will put it into a tailspin."

Construction, an important part of the economy, represented 9% of last year's gross domestic product," Knott says. "It's a hot-button issue, but we need to start thinking about the consequences."

Contractors want a temporary worker program to bring in labor from foreign countries. Photo courtesy of Barnhart

AGC agrees there should be a good verification system in place that puts the responsibility on the government, not employers. A federal verification system has been demonstrated using a small number of employers, but AGC would like to see it phased in over a longer period of time to implement it properly.

Companies in border states are 10 years ahead of others in their development of methods to verifying workers, says Douglas Barnhart, CEO of Barnhart Construction Co., San Diego. Barnhart's company does background checks on the employees it hires.

"There are a lot of counterfeit documents, and unless you're an expert you won't catch them," he says.
Some in Congress may think the industry isn't checking documents, but Barnhart adds, "That's false, but it is possible that some slip through the cracks."

The issue is how to get skilled workers into the country legally. "We understand the security issues, but there has to be a way to facilitate allowing skilled workers to cross the border," says Doug McMurry, executive vice president of the San Antonio chapter of AGC. "Mexican brick masons are not terrorists. Mexican carpenters are not al-Qaeda operatives."