As the housing industry gains momentum and the demand for workers increases, labor shortages top the list of the crucial impediments to robust housing recovery. As native-born workers are slow to return to the construction industry, the role and share of foreign-born workers has been rising since the housing recovery got underway. Immigrant workers now account for close to one in four workers, the highest share recorded by the American Community Survey (ACS). The share of immigrants is even higher in construction trades, reaching 30%.
According to the government’s system for classifying occupations, the construction industry employs workers in over 300 occupations. Out of these, only 31 are construction trades, but they account for two thirds of the construction labor force. The other third of workers are in finance, sales, administration and other off-site activities.
Concentration of immigrants is particularly high in the trades needed to build a home, like carpenters, painters, drywall/ceiling tile installers, brick masons, and construction laborers – trades that require less formal education but consistently register some of the highest labor shortages in the NAHB/Wells Fargo Housing Market Index (HMI) surveys and NAHB Remodeling Market Index (RMI).
The two most prevalent construction occupations, laborers and carpenters, account for about 30% of the construction labor force. More than a third of all construction laborers (37%) and 31% of carpenters are of foreign-born origin.
NAHB research shows that immigrants are concentrated in trades that do not require years of education. Immigrants account for almost half of drywall/ceiling tile installers and tapers, a trade where more than 44% of workers do not have a high school diploma. About 37% of all carpet/floor/tile installers and painters did not finish high school, immigrants account for 46% of workers in these occupations.
The trades with low presence of foreign-born labor, such as construction and building inspectors, boilermakers, elevator installers, electricians, first-line supervisors – tend to recruit better educated workers. Only 3% of construction and building inspectors, less than 4% of elevator installers/repairers and 9% of electricians did not graduate from high school.
The construction occupations with the highest presence of immigrants are plasterers/stucco masons, drywall installers and painters. The share of immigrants in these trades is 54, 49 and 48% respectively. Between 36 and 48% of workers in these occupations do not have high school diploma.
Looking at the most common non-construction trades in the building industry, the majority of them are management, office and sales occupations. These trades seem to recruit workers with more advanced education and higher skills as share of workers with no high school diploma in these trades is minimal (with the exception of drivers, installation/maintenance/repair workers and welding/soldering/brazing workers). The immigrant presence in these trades is less pronounced. While the overall share of immigrants in the construction labor force exceeds 24%, their share among construction and miscellaneous managers – the top two most common non-construction trades in the industry – is 13 and 14%, respectively. The immigrant share is as low as 9% among chief executives, 8% among cost estimators, and 4% among sales representatives.
It turns out the trades that do not require years of education or advanced skills also tend to have more vacancies and labor shortages. According to NAHB’s monthly HMI surveys, construction trades with the most consistent labor shortages are framing crews, carpenters and bricklayers.
About 30% of surveyed builders were reporting some shortages of labor in these trades in June 2012. At this stage of the recovery, the shortages were not nearly as widespread as in the midst of the housing boom. Nine months later, in March 2013, reported labor shortages got worse across all trades, but particularly among framing crews and carpenters. By June of 2014, 63% of builders reported shortages of labor for rough carpentry employed directly by their firms. The most recent (July 2017) survey showed even more acute shortages, with two out of three builders reporting shortages of carpenters and framing crews directly employed by their firms.
Full NAHB report on immigrant workers in construction is available to the public as a courtesy of Housing Economics Online