Phil Crone: Labor Problem Easy to See, Hard to Solve

 

By Phil Crone
Executive Officer, Dallas Builders Association

“The guest worker program unnecessarily lowers construction worker wages.”

“Put simply, there is no construction labor shortage.”

“It’s five o’clock somewhere. And maybe there’s a construction worker shortage, too, somewhere. But it’s not significant in the U.S., and it’s not very widespread.”

Would you believe that all of these are recent quotes from organizations involved in the construction industry? Believe it or not, they were recently published in Illinois and Michigan. I share them because I want to illustrate the labor demand difference between the laggers and leaders of our nation’s economy. It also demonstrates the uphill battle that looms for any type of legislative fix for immigration and long-term cure to our labor shortage.

As I have mentioned before, the construction industry in the Dallas area is under supplied by 10,000 to 20,000 workers. Our members are reporting that, on average, the labor shortage is adding two months and $4,000 on to each home they build. As a result of the supply and demand, total hourly wages have increased substantially more in the construction industry than in other sectors. Put simply, our industry in our area has plenty of well-paying jobs available and there simply are not enough workers to fill them.

The labor shortage requires solutions from within and without. Our association has made great strides this year building partnerships with Dallas ISD, Grand Prairie ISD, and local community colleges. Over time, these efforts to “bring back shop class” are going to result in tremendous opportunities for hundreds of students. But thousands more are still needed.

The construction work force has and will continue to rely on immigrant labor. The lack of it is the largest contributor to the aforementioned figures. Many left the industry during the recession and did not return. According to the National Association of Home Builders (NAHB), there are around 2.3 million foreign born workers in construction nationwide, which is still almost a half-million fewer than in 2007.

As you can see, this issue predates President Trump, so blaming him for the current shortage is a bit misguided. He is, however, part of the problem and potentially part of the solution going forward. His enforcement actions and talk of walls and deportation are most certainly part of the problem. Creating fear in the communities our industry and our economy relies on for continued prosperity is hardly an incentive for them to confidently step out of the shadows.

It is time for a viable guest worker program that enables non-U.S. citizens to work legally in this country for multi-year renewable terms. Undocumented workers currently living in the U.S. should be provided with an opportunity to register for this program, which should be tailored to the areas and industries with the greatest needs. We have beaten our heads against the wall (no pun intended) on this issue for far too long with our Congressional delegation. They tell us that the guest worker issue cannot be addressed until the border is secured as if they are unable to walk and chew gum at the same time.

A provision in President Trump’s budget proposal could be a small part of the solution. It calls for an expansion of the H-2B guest worker visa program. The program provides American businesses the ability to bring in workers for non-agricultural industries. Current law limits the number of such visas to 66,000 a year.

The number could double under the budget bill being considered. Before you get too excited, know that the visa is shared among several industries including landscaping, forestry and housekeepers. In 2014, there were only around 2,400 visas issued for construction workers nationwide. Doubling that number only fills a quarter of the need in Dallas alone. Additionally, the program needs several improvements and simplification before it can be a truly useful tool for the industry.

The Trump budget at least recognizes the problem. However, even a “drop in the bucket” solution was immediately met with hostility from trade unions who claim the proposal runs directly counter to his “buy American, hire American” agenda. Mind you, these are the same people whose views were shared at the top of the article. While they are completely out of touch with realities faced in economies driving our nation’s recovery, they are impossible for the President to ignore because they largely come from the places that put him in the Oval Office.

Identifying and understanding the problem is the easy part. Some even struggle with that reality, which leaves me pessimistic that we will find a truly effective legislative solution any time soon.