We all pay the price for immigration failings

Policies curb Texas' building boom all over the state

Sometimes it’s worth taking a look at an old subject through a new lens. For example, to understand why there’s a chronic construction labor shortage in Texas, think one word: immigration.

Immigrants make up about 41 percent of the construction trades in Texas, or close to twice the share of immigrants in the U.S. construction labor force, making this region heavily dependent on foreign-born tradesmen. Factor in the perfect storm of slowed immigration from Mexico, Hurricane Harvey reconstruction and the white-hot construction market in Texas, and the outcome is predictable. Demand continues to outpace supply, and we all are paying a price.

Now before you say that’s business nirvana, think again. Tighter labor markets pose a risk to overall economic growth. Building a house anywhere in the state costs at least $4,000 more and takes two or three months longer than a year ago, and the impact of high costs disproportionately affects buyers at the low end.

We’re in this conundrum largely due to flawed immigration policy. Immigrant workers have replaced U.S.-born workers who either retired or bailed out of the construction industry and retrained for other work after the Great Recession. Chaotic immigration policy has reduced the supply of workers in relation to construction demands.

In 2004 and 2005, over 130,000 new immigrants nationwide joined the construction labor force annually, peaking at about 11.7 million jobs in 2005. The housing crisis trimmed that to about 10.8 million in 2008 and 10.2 million even after the housing market’s recovery.

Texas is at the epicenter of this decline, experiencing major shortages of skilled drywall installers, painters, carpenters, electricians, bricklayers, roofers and a host of other construction occupations. Builders estimate that Texas needs at least 100,000 more workers statewide just to meet the demand for new construction.

Let’s be clear. We aren’t advocating illegal immigration or a return to the industry’s unspoken “don’t ask, don’t tell” policy that allowed builders to exploit unauthorized immigrants. But here’s the economic reality: Uncertain immigration policy is hurting you in the pocketbook. The Real Estate Center at Texas A&M University estimates that a $1,000 increase in costs quickly prices thousands of would-be homebuyers out of the market. And houses that should be built but aren’t act “as a drag on new starts,” said Robert Kramp, director of research and analysis for commercial real estate firm CBRE.

Markets work best when supply and demand are near equilibrium. Our economy needs a vibrant construction industry and a functioning immigration policy that meets the demands of the marketplace. – Dallas Morning News

 

By the numbers

41 percent — Share of immigrants in construction trades in Texas, the second-highest percentage behind California.  

24 percent — Share of immigrants in construction trades nationwide, up from 19 percent in 2004.

100,000 — Workforce shortage in construction trades statewide.

 

SOURCES: National Association of Home Builders, American Community Survey

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