Labor shortages have the potential to cause delays in home building and add to the cost of construction. In the Builders Economic Council (BEC) surveys conducted monthly by NAHB, builders consistently rate labor availability among their most prominent concerns. This article examines where construction workers come from by analyzing the 2004 American Community Survey (ACS) from the Census Bureau. The results show that immigration provides a large share of the construction industry’s work force.

 

Where Construction Workers Come From
According to the ACS, more than 15 percent of the US workforce was born abroad. The share of immigrant workers is much higher in construction, where 2.4 million, or around 20 percent, of workers are foreign born. The ACS does not report employment data separately for residential and nonresidential construction, but different types of construction can require similar skills and, therefore, often draw workers from the same labor pool. As a result, workers’ movement between the residential and nonresidential is flexible for many trades.

 

Figure 1 illustrates where immigrant construction workers come from. The majority, 54 percent, come from Mexico. An additional 25 percent come from other countries in the Americas. Together, the Western Hemisphere accounts for 80 percent of all immigrant construction workers in the US. Europeans make up 12 percent, and an additional 8 percent come from Asia.

 

 

An informative way to analyze the importance of the immigrant population in home building is by evaluating the shares of the US born and immigrant populations that work in construction. Table 1 details this information. While only 4 percent of native born citizens work in the industry, one out of ten immigrants coming from the Americas and 5 percent of European immigrants go into construction. Only Asian and other (African, Australian, etc) immigrants are less likely than the native born to work in the construction industry.

 

Table 1. Percent of Population Employed in Construction
Place of Birth	Year of Entry					Total
	Prior 1980	1980-1989	1990-1994	1995-1999	2000-2004
Mexico	8.20%	12.76%	12.59%	14.57%	14.90%	12.65%
Americas	3.79%	7.42%	7.96%	7.94%	9.08%	6.86%
Asia	2.23%	2.27%	1.63%	1.42%	1.56%	1.90%
Europe	4.09%	6.82%	5.79%	5.14%	3.85%	4.79%
Other	3.69%	2.19%	2.66%	1.01%	0.89%	1.88%
All Immigrants	4.41%	7.16%	7.15%	7.71%	8.15%	6.67%
Native Born	4.04%

 

The tendency to work in construction is particularly high for immigrants born in Mexico. Remarkably, one out of every eight Mexican immigrants currently works in the industry. This tendency is even more prominent among recently arrived Mexicans, with almost 15 percent of those who arrived after 2000 working in construction. In comparison, the rates of employment in construction are significantly lower for recent immigrants from Europe and Asia. These numbers highlight the increasing reliance of the construction industry on newly arrived immigrants from the Americas in general, and from Mexico in particular.

 

Regional analysis of construction employment provides some additional insights (see Table 2). In four states –California, Nevada, Texas, Arizona- and the District of Columbia, more than a third of all construction workers are immigrants. In New York, Florida, and New Jersey, immigrants account for more than a quarter of all construction workers. Interestingly, reliance on foreign-born labor now spreads outside of these traditional immigrant magnets and is evident in states like Colorado, Georgia, Illinois, and North Carolina. While most states draw their immigrant construction workers from the Americas, Hawaii relies more heavily on Asian immigrants, and European immigrants are a significant source of labor in North East.

 

 

Immigrants in Construction Trades
According to the government’s system for classifying occupations, the construction industry employs workers in over 280 occupations. Out of these, fewer than 30 are construction trade jobs, but these account for more than two-thirds of all jobs in the construction industry. The other third of the jobs are in finance, sales, administration and other off-site activities. Note that managers, heating, ventilation, air conditioning, and refrigeration (NVACR) mechanics and installers are not included in the construction group.

 

The two most prevalent construction trade occupations (see Table 3), carpenters and construction laborers, account for almost 30 percent of overall construction employment. About 22 percent of the carpenters and 32 percent of the construction laborers are immigrant workers. Among painters, masons, and roofers, almost a third of the workers are immigrants. The occupation with the largest immigrant presence is drywall/ceiling tile installers, and tapers, where 40 percent of workers are of foreign born origin.

 

According to the monthly BEC surveys conducted by NAHB, construction trades with the most widespread and severe labor shortages are carpenters and roofers, with more than 50 percent of all builders consistently reporting either severe or some shortage of carpenters and more than 40 percent expressing concerns over availability of roofers. These labor shortages become particularly acute during the summer months of 2005. For example, in July, two thirds of all interviewed builders complained about shortages of carpenters and 42 percent reported shortages of roofers. It is noteworthy that immigrant rates of employment are above average in these high-demand trades.

 

[1] Non-construction occupation, included in Management Occupations.

[2] Non-construction occupation, included in Installation, Maintenance, Repair Occupations.

 

It is interesting to compare immigrant employment by trade with occupational wages. The Occupational Employment Statistics (OES) program conducted by the Bureau of Labor Statistics (BLS) produces wage estimates for various occupations. The BLS reports occupational wages separately for residential and nonresidential building construction. The drawback, however, is that self-employed persons (more than 2 million in residential construction) are not included in the estimates.

 

According to the 2004 OES estimates, average annual pay in residential construction is $40,720 but varies considerably across different occupations. The range extends from $140,630 for chief executives to below $20,000 for grounds maintenance workers. Immigrants are concentrated in the lower wage occupations.  While the overall share of immigrants in construction is 20 percent, their share among chief executives, the single highest paid occupation in construction, is only 7 percent. It goes up just slightly to 9 percent for all management occupations combined, the highest paid group with an average annual pay of $88,820. Even among the lower ranked first line supervisors and managers of construction trades, the share of immigrants is below 12 percent. As mentioned above, the story is different for lower wage occupations. Annual wages for construction laborers, roofers, and helpers are $27,650, $29,260, and below $23,000, respectively. About one-third of the workers in these occupations are foreign born. In the occupation with the highest immigrant concentration, drywall and ceiling tile installers, average annual pay is $39,210. 

 

In summary, analysis of data from the 2004 ACS and additional sources highlights the importance of immigrant workers in residential construction and their significant role in providing housing for all Americans.