Trump's Deportation Plan 'Would be Devastating' for U.S. BuildersBy
Home construction hobbled by lack of skilled workers
Deporting millions “would be devastating” to the industry
Donald Trump’s throw-the-illegal-immigrants-out stance is stirring angst in many corners of corporate America these days, and nowhere are the jitters more acute than in the homebuilding business. Not only is it heavily dependent on foreign-born workers, it’s already four years into a shortage of framers, roofers, drywallers and painters.
The squeeze has sent costs up and slowed construction, particularly in states such as California, Arizona and Nevada, where land for subdivisions is plentiful and demand for houses strong. A key reason: Mexicans have stopped pouring over the border in droves. In fact, according to the Pew Research Center, more have returned home since 2009 than have migrated to the U.S., and illegal immigration peaked in 2007.
Deporting millions of those who remain “would be devastating,” said Mark Boud, chief economist at the Washington-based research company Hanley Wood. It would translate into “fewer homes built in an industry already short in terms of housing supply.”
Of course, employers who hire the undocumented can face federal fines, and homebuilding companies are adamant that they’re vigilant about hiring only legal workers. But it seems not everyone is careful, or able to check crews supplied by subcontractors that have long relied on experienced Mexicans. Conservative estimates put the proportion of construction jobs now held by undocumented workers at 14 percent.
If they were out of the picture, all builders would suffer, according to David Weekley, whose Houston-based David Weekley Homes is the largest privately held homebuilder and who said he checks the residency status of all his workers. “Clearly we need to secure our borders, but it’s reactionary to send everybody home. The reality is without these laborers in our country, we would be in bad shape in all kinds of industries.”
That’s hardly a universal position. In Phoenix, Don Matthews, a framing contractor and self-described “right-wing extremist,” said a Trump presidency would be good for his business: Fewer undocumented workers would mean fewer rival framers underbidding him with their cheaper illegal-worker squads.
Immigrants willing to work for relatively little may also depress wages across the board, exacerbating the shortage because others don’t think the jobs pay enough. Matthews said he runs up against that looking for Americans to toil in 100-degree heat for $16 to $17 an hour. Still, he said he’d only turn to the undocumented as a last resort. “I don’t want to hire illegals unless I have to.”
$11.10 Versus $14.22
Homebuilders could simply pay more and any shortage would quickly be a problem of the past, said Eric Ruark, director of research at Numbers USA, a group that advocates for a sharp reduction in immigration of all kinds. “We want the U.S. economy first and foremost to benefit American workers.”
Wages actually have been rising for several years. After adjusting for inflation, hourly pay in the residential-building sector was up 16.9 percent in July from the same month in 2011, according to data from the Bureau of Labor Statistics.
In Texas, undocumented construction laborers make an average of $11.10 an hour, compared with $14.22 for those born in the U.S., according to a 2013 study by the Austin-based Workers Defense Project and the University of Texas. In that state, the study found, about 50 percent of people in such jobs were illegal residents, even with the decline in immigration from Mexico.
Nationwide, the sector is third in unauthorized labor, behind farming, fishing and forestry, which is No. 1, and a group that includes landscapers, housekeepers, janitors and pesticide handlers, according to a 2015 Pew study. But in all sectors, the occupation with the highest share of undocumented workers is a category Pew classifies as including drywallers, ceiling tile installers and tapers -- at 34 percent of the total.
Weekley said projects are delayed by searches for workers. Now it can take six months to finish a house, compared with four in the late 2000s. Still, U.S. home construction accelerated in July to its fastest pace in five months, and sales surged to their highest level in more than nine years.
The National Association of Home Builders has been lobbying for a new guest-worker program; foreign nationals would be allowed into the U.S. for temporary stretches for jobs building houses, obtaining special visas at embassies in their home countries. “Trump talks about a wall but we need doors in the wall so you know who is here and have control of who is here,” said Suzanne Beall, federal legislative director for NAHB.
Persuading politicians “is an uphill battle,” said Jerry Howard, the trade group’s chief executive officer. “A steady supply of legal immigrant labor is important for us.”
The Trump campaign doesn’t see it that way. There’s a “massive pool” of out-of-work Americans with the necessary skills and experience, “more than enough to fill the labor-supply needs,” according to a senior aide to the Republican nominee who declined to be identified.
There were 454,000 unemployed U.S. construction workers in August, the lowest number for the month in 16 years, BLS data show.
In a speech two weeks ago, Trump reiterated his promise to immediately deport criminal aliens and institute biometric tracking to find people who overstay their visas. He ruled out amnesty for the undocumented and vowed to triple the number of Immigration and Customs Enforcement agents, as well as to expand the E-Verify system that allows businesses to determine the status of employees. “You can call it deported if you want,” he said. “You can call it whatever the hell you want. They’re gone.”
Trump also returned to a favorite theme of building an “impenetrable, physical, tall, powerful, beautiful” wall across the Mexican border. That would worsen the labor shortage. Moody’s Analytics Inc. ran the numbers and concluded it would take three years to erect such a structure, and require 40,000 workers.
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.