The summer has been a cold one for the labor market in the United States. Not only were just 22,000 new net jobs added in August, but for the first time since December 2020, jobs were lost in June. The onset of the winter of employment had been a reality for some time in some sectors of the economy, such as manufacturing and the mining and oil sectors. It also happened in construction, where job losses over the past three months were confirmed on Friday. This is an area of the economy where around 34% of workers are foreign-born, and the onslaught of anti-immigration policies is opening a deep rift that affects not only them but also U.S.-born workers, businesses and ongoing projects.
A number of construction industry firms attested to this situation in a late August survey conducted by the Associated Contractors of America and the National Center for Construction, Education and Research (AGCE and NCCER, respectively). Nearly a third of companies reported having been directly or indirectly affected by immigration policies in the past six months, compounding the problem faced by 92% of respondents, who reported difficulty finding workers. Specifically, 5% of respondents said their sites have been raided by immigration agents, and an additional 10% have seen their workers leave due to rumors of possible action by authorities.
The raids don’t just affect individuals without work authorization. AGCE Chief Economist Ken Simonson explains that many immigrants with work authorization also fear Immigration and Customs Enforcement (ICE) because of how a raid could affect their family members or other nearby communities at risk if they were dragged in by a mass arrest. Twenty percent of respondents say their subcontractors have also lost employees. The most affected states are Georgia, Virginia, Alabama, Nebraska and South Carolina.
The Federal Reserve has also acknowledged the complication arising from ICE’s actions. Last week, the monetary authority published its latest report on regional economic conditions, the so-called Beige Book, in which it referred more than a dozen times to the problems that anti-immigration action is creating in the labor market in the twelve Fed districts.
“Half of the Districts noted that contacts reported a reduction in the availability of immigrant labor, with New York, Richmond, St. Louis, and San Francisco highlighting its impact on the construction industry,” the report reads. Specifically, in the case of the New York Federal Reserve, it noted that the drop in immigrant workers has led to project delays. Solutions are being sought. Some employers are opting to offer four-day workweeks to retain workers, according to the report.
In the case of the Richmond Fed (which includes North and South Carolina, Virginia, Maryland, Washington, D.C., and most of West Virginia), difficulties in finding workers among immigrants in this sector have increased. “Multiple construction contacts encountered increased difficulties finding workers due to the available immigrant labor pool, and they were not optimistic about future labor availability,” the Beige Book states.
The lack of immigrant labor not only fails to open doors to American-born workers, it also negatively impacts them, says Ben Zipperer, an economist at the Economic Policy Institute (EPI), a progressive think tank. In a recent report he explained that deportations also affect national workers in several ways. One of the most notable is the breakdown of the complementary ties that exist in jobs involving both foreign and native-born labor. The labor chain is broken. “when there are fewer immigrant roofers and framers to build the basic structure of homes, there will be less work available for U.S.-born electricians and plumbers,” he explains, providing an example that can be applied to other industries and cuts across several sectors. The reduction in the immigrant population and its activities also reduces consumption and investment, which reduces job creation.
Official figures on job demand and openings, hires, and resignations compiled by the Bureau of Labor Statistics (BLS) complete the employment picture. The so-called JOLTS report for July reflects how job openings across the country are declining overall, but, counterintuitively, they have grown in the construction sector. Specifically, they rose from 242,000 in June to 306,000 a month later. This is 77,000 more job openings than in the same month last year.
Industry economists acknowledge that these are highly volatile data, but Anirban Basal, chief economist at Associated Contractors and Constructors (ABC), explained in a note that bids have risen to the highest level in more than a year. “Given the continued decline in nonresidential construction spending, this increase in bids is attributable to immigration policy and its effects on the labor force, rather than to increased demand for construction workers.”
AGCE’s Simonson says these job postings often contain many anticipated jobs that need to be filled for other phases of construction, but other data from the JOLTS report also shows a deterioration for the sector, such as those referring to people leaving their jobs because they have a better option. Job turnover for these employees is the lowest in the last nine years, suggesting concerns about job security in a difficult labor environment and pressure from tariff costs. “There are no opportunities,” Simonson says.
This economist says the current labor shortage is the main reason why projects of all kinds are experiencing delays because there aren’t enough qualified workers to hire. Seventy-eight percent of firms surveyed by AGCE and NCCER say they have at least one project that has been delayed in the last 12 months, and 45% attribute the cause to a shortage of workers and the shortage of their subcontractors.
Sign up for our weekly newsletter to get more English-language news coverage from EL PAÍS USA Edition