This column by Walter Fritz, CEO of Nuera Group and board chairman of Associated Builders and Contractors, San Diego, first appeared in the San Diego Transcript on January 23, 2018.
The construction industry heads into 2018 with a “good problem to have” compared with the lean years of a decade ago during the Great Recession. Construction in the United States reached a record number of spending in the most recent report for November 2017. Two to three percent growth is projected in 2018 with wage growth of four percent.
Business friendly regulatory rollbacks and the passage of tax reform set the table for a successful year for the member contractors of the Associated Builders and Contractor in San Diego. It gives companies like mine more efficiencies and allows us to lower costs. Construction CEOs like me have more confidence in our business climate.
If Congress passes a wide-ranging, trillion-dollar bill addressing the dire need to replace our country’s aging infrastructure as pledged, positive growth in the construction industry could reach unprecedented levels in the modern era.
A good problem is still a problem, and problems need to be solved. If an infrastructure bill passes, the construction industry’s current skilled labor shortage of 500,000 workers could more than double to a 1.2 million worker shortage according to ABC National CEO Michael Bellaman.
It takes multiple tools to build a solid, systematic approach to turn this situation around. First and foremost, we need to increase training capacity. Competency-based vocational education programs such as the ABC San Diego Training Academy for skilled construction professionals need support in the form of funding and expanded outreach to high school students, military veterans, and underserved populations including women to ensure a full education pipeline. The Trump Administration’s executive order expanding apprenticeship training is a start.
Expanding apprenticeship training must also go hand in hand with immigration reform. Immigrant workers play a critically important role in the construction industry, and are vital to our economy. The influence of immigration on construction has a long, proud history in the United States back to the 19th Century, when German, Irish, and Italian immigrant laborers organized themselves in New York.
Today, one-quarter of the American construction workforce is foreign-born, a total of 2.2 million construction workers. It is a larger number overall than in agriculture or manufacturing.
Construction work provides opportunity to immigrants as a source of income, in building employment skills, and even in building entrepreneurial skills. The share of foreign-born workers in the U.S. construction workforce has remained consistently high for the last decade despite the construction downturn during the Great Recession and its subsequent recovery.
Contrast this to surveys which show only three percent of 18 to 25 year old American born citizens are interested in construction careers. While we need to work to change perceptions about the construction industry among American-born students and their families, our immediate workforce problem demands that immigration reform be addressed now.
First, the construction industry would like to see an expansion of the H2B visa program, which the construction industry relies on to fill skilled jobs. The industry would like to see an increase in the visa period and in the overall cap to help fill current labor gaps and stimulate employment sufficient to meet our current needs.
Next, the Deferred Action for Childhood Arrivals (DACA) program as well as the Temporary Protected Status (TPS) situation must be addressed. While nothing had been decided at the time of publication, these programs cannot continue to twist in the wind creating uncertainty for individuals and employers alike. The DACA program is a pipeline providing some of our most skilled and dedicated members of the workforce. To leave them in limbo produces an unfair burden hurting them as individuals and our industry as a whole. Imagine a major infrastructure project critical to San Diego coming to a screeching halt when the immigration status of key members of our workforce might change overnight.
For every million dollars of infrastructure spending, 6.7 jobs are created. Foreign-born workers make up a significant percentage of the construction industry workforce. This isn’t going to change anytime soon. Business has long wanted these key components of immigration reform – legalizing the current workforce and creating an adequate pipeline for new workers.
Career construction offers limitless opportunities from learning skills to becoming entrepreneurs to running a business and creating new jobs. Immigrants have literally built America.
Walter Fritz is President and CEO of Nuera Group LP, and chairman of the Associated Builders and Contractors San Diego board of directors. For more information visit www.abcsd.org