Thread: Labor Shortages In Construction

Labor Shortages In Construction

VOXXI | By Susana G. Baumann Posted: 02/21/2013 2:33 pm EST

Every morning, Maximo Pena stands on the curb across Saint Mary’s Church in Lakewood, New Jersey, where contractors pick up construction laborers. He came from Tamaulipas, Mexico in 2001 and became a construction carpenter and framer OTJ (on the job).

At $12 to $15 dollars, Pena knows he is behind his documented and unionized peers, who are now receiving over $25 an hour. His angst is also related to a lack of transportation because only 10 miles away, on the Jersey Shore, contractors are desperate to find skilled construction workers.

New Jersey is not the only state where the construction industry is recovering while struggling with labor shortages. In the area, “Superstorm Sandy” has created—slowly but steady—increasing opportunities for construction workers and contractors.

But the Associated General Constructors of America (AGC) also reported that last year, 24 states and the District of Columbia added construction jobs, according to U.S. Department of Labor data. Construction employment rose for the eighth consecutive month in January, raising employment in construction firms’ jobs to 5.731 million. Unemployment in the industry fell from 17.7 to 16.1 from January 2012 to a year later.

Among the states where most new constructions jobs were created in the last 12 months, Texas is followed by California, Washington and Arizona

but Illinois, Pennsylvania and Florida are among states that lost jobs, the report says.

Some of these states, largely populated by Latinos, are reporting difficulties in finding new hires and contractors required by the frail but consistent recovery in the industry.

Depending on each state, a combination of factors including the real estate blow, generational gaps, stricter state immigration laws or high levels of deportation of undocumented immigrants forced Latinos out of the industry. Some—many of which were skilled construction workers—returned to their countries of origin. On the other hand, the economic turndown wrecked many Latino small contractors in the sector. Are these hires and contractors coming back?

Worst states where construction was hit the hardest

Historically, Latino unemployment rate has been higher than White’s but lower than African American’s. In December 2007, the Latinos unemployment rate was 6.3 percent compared to 4.4 percent for Whites and 9.0 percent for African Americans, according to a report from the U.S. Department of Labor (DOL). It peaked nationally at 11.7 percent in 2010.

Latinos represent almost 24 percent of the labor force employed in construction nationally, with higher percentages in states such as Nevada, Illinois, Colorado, Arizona, Florida and California, where the pop of the “real estate bubble” hit the industry the hardest.

Ken Simonson, chief economist for Washington, D.C.-based AGC affirmed recovery in the construction industry is “fragmentary and fragile.”

According to the analyst, Nevada has lost nearly 100,000 construction jobs since June 2006, when construction employment peaked at 146,400. The state’s construction employment was down to 48,200 in September of 2012, he said.

One of the nation’s largest foreclosure crises, the housing market crash dragged Nevada’s construction workforce, especially to Latinos. Unemployment rate for this population peaked in 2009 at over 19 percent and is still one of the highest in the nation at 15 percent last year.

However, other states are recovering at a faster pace and with different outcomes. Jorge Perez, Executive Director of the Hispanic American Construction Industry Association (H.A.C.I.A.) of Illinois told VOXXI that trained Latino labor is lacking in their state due in part to a generational gap that has allowed Latinos and Latinas of Illinois a path to the middle class.

“You can find trained workers in the population of 55 and older, or the 21 to 25-year-olds that are now coming in with less skills but ready to be trained. Many Latinos in the intermediate generation are children of construction workers who accessed a college education and became architects, engineers and project managers. College has been the silver bullet that allowed them to reach the path to the middle class,” Perez said.

Also, a bit of a gap in craftsmanship skills among non-union Latino labor is evident compared to union workers, Perez shares. “Our organization represents contractors mostly working in the public sector. Because federal funds are limited, our state made a big push with a mixture of fees, bonds and state funds to increase public work. Many companies moving from residential to the public sector where heavy infrastructure is being developed are encountering this problem,” Perez said.

Colorado’s construction industry was decimated but it is picking up greatly, especially in the public sector, said Helga Grunerud, Executive Director of the Hispanic Contractors of Colorado (HCC).

Between 2008 and 2011, the Colorado construction industry lost 60,000 jobs or more than a third of its jobs. “Our organization had around 140 members in the Colorado Front Range region,” Grunerud told VOXXI. “However, we lost many of the smaller Hispanic-owned companies during the economic turndown because they were not prepared to face the demands of public works—weekly or bi-weekly labor and vendors’ compensation—while waiting for public entities to remit funds.”

Fortunately, she added, all major projects in the public sector are now setting higher inclusion goals. “The DOT Disadvantaged Business Enterprise program (DBE) implemented by recipients of DOT Federal Financial Assistance are setting goals of 20 to up to 51 percent of minority business inclusion in projects as important as the expansion of the Denver airport, Denver public schools or the FasTracks Project to stimulate minority business recovery,” she shared.

In Arizona, David Jones, President of the Arizona Construction Association (ACA) affirms the state lost almost 210,000 construction workers during the recession. Many left the state because of the housing crash but also due to SB1070, the toughest immigration law in the nation.

During 2007, Arizona was employing 40 percent of Latinos in the construction industry with a large number of undocumented foreign-born workers. After SB1070 was upheld by the U.S. Supreme Court, the Department of Homeland Security reported that 100,000 undocumented immigrants left the state, many of which were construction workers.

Now, new construction is booming in the state, according to a study by the Arizona State University. In May of last year, permits issued for construction of new single family homes in Maricopa and Pinal counties increased 85 percent from one year before, the highest seen since June 2008.

But some of those workers returned to their countries of origin and some looked for employment in other industries. Despite high compensation many contractors are offering, Latino workers still doubt that Arizona represent a tempting opportunity.

Each state is dealing with different reasons why Latino labor is scarce. Meanwhile, workers such as Maximo Pena, who are eager to work, are waiting for an immigration reform that would allow them to pair up with the native-born

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