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Contractors cry for immigration reform to ease labor shortage

August 30, 2018

A prolonged shortage of construction workers has the Associated General Contractors of America calling for immigration reform.

“We recognize it’s important to have safe borders,” said Kenneth D. Simonson, the Associated General Contractors of America’s chief economist. “But it’s also really important for the growth of the U.S. economy to make sure that we have a large enough workforce.”

A workforce survey that the contractor’s grou[ released Wednesday showed that 78 percent of construction firms in Texas report difficulty finding qualified construction workers. That difficulty persists despite some growth in the labor market.

Houston leads the nation in a recent analysis of construction employment growth, with the industry booming in the year following Hurricane Harvey, according to Simonson. The metro area - including Houston, the Woodlands and Sugar Land - has added 25,500 construction jobs between July of 2017 and 2018 - a 12-percent increase.

Still, local construction firms are scrambling for workers.

Mike Holland, the chief operating officer of building company Marek, which worked on Lakewood Church and the Texas Medical Center, agreed with Simonson that immigration reform is key.

“Our economic viability is based on access to skilled labor and of course … we have a problem,” Holland said. The solution to that problem, he explained, would be to face the reality that the construction industry has a large immigrant workforce. “We can’t solve the problem with subtraction.”

Simonson also argued that the theory that immigrant workers depress wages is a myth. “Construction has long had a much higher percentage of foreign-born workers than other industries, and yet average hourly pay in construction is now more than 10 percent higher than the entire private sector average.”

Already, building companies are feeling the pinch as they compete for workers.

In response to the shortages, 69 percent of Texas firms say they’ve increased pay rates, and many said they were increasing in-house training and overtime.

The changes are reflected in construction costs and completion times. Over half of the surveyed construction firms in the state said the shortages have led to higher bid prices, 45 percent said that already-underway projects are costing more than originally anticipated, and 44 percent said that projects are taking longer than originally scheduled.

Daniel M. Gilbane, head of the Gilbane Building Co.’s Houston office, said that he has had at least one development put on hold because of the increased labor costs resulting from the shortage.

“People have been driving costs in our industry,” he said. “Really, the lack of people.”

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