Will the Trump Administration’s Immigration Policy Worsen the Construction Labor Shortage?

Conrad Lazo, shareholder with Becker & Poliakoff Legal and Business Strategists

Conrad Lazo, shareholder with Becker & Poliakoff Legal and Business Strategists

During the Great Recession, many construction workers across the U.S. lost their jobs and, ultimately, found other employment that did not require long, laborious days under the hot sun or being laid off because of inclement winter weather. “The fact that construction labor rates have not risen commensurate with other industries is yet another detriment to those who may have considered a return to the construction industry. They will not have an incentive to return until construction wages increase,” says Conrad Lazo, a shareholder with Becker & Poliakoff Legal and Business Strategists, Tampa, Fla. “The industry is plagued with manpower shortages and a lack of skilled labor.”

Potentially compounding this issue is President Donald Trump’s immigration policy. If the construction industry already is struggling to find workers, what will happen as construction demand continues to increase? And how might Trump’s immigration policy affect construction costs? retrofit recently spoke with Lazo, who has practiced for 35 years primarily in areas of construction law, surety law and general commercial litigation, about Trump’s immigration policy and its potential effects on the construction industry.

r: What’s the impact of the Trump administration’s immigration policy on available manpower?

Lazo: The administration’s immigration policy is having a negative impact on available construction labor. The construction industry is having a difficult time finding U.S. citizens to perform the less desirable of the construction trades. For example, U.S. construction companies have relied on immigrant labor for performing roofing, landscaping, earthwork and road paving. With immigrant labor on the decline, U.S. construction companies will have to pay U.S. citizens higher wages to get the same performance as that obtained through immigrant labor. As higher wages are paid to U.S. citizens, the costs of construction also increase. Eventually, projects may price themselves out of the market. Ultimately, construction projects may be scrapped because of excessive costs.

r: What are some effects of less immigration on the workforce?

Lazo: The construction industry relies on a certain amount of immigrant labor to supplement certain work trades. Compound that with a robust construction industry and the Trump administration’s policies on immigration and an already tight construction labor pool will worsen. The current administration’s intent to close the borders and resist the influx of cheap labor is a double-edged sword. The construction industry is constantly dealing with increased material costs and pressure to increase labor rates. In the coming years, those companies riding the wave of the construction boom will need to reach deeper into their pockets to pay more to lure workers for vital positions on construction projects. As those labor dollars increase, so do project costs—some construction projects may become out of economic reach.

r: What is happening regarding labor in the construction industry right now?

Lazo: Recently, I began including a variety of provisions in construction contracts on behalf of the owners of prospective projects to protect against increased costs and delays associated with manpower shortages, including:

  • A representation by the contractor that it has secured sufficient skilled and trained labor to construct the project in the timeframe required by the contract.
  • The contractor’s representation of sufficient manpower to timely construct the project was a material inducement upon the owner in agreeing to enter into the construction contract.
  • A provision requiring the contractor to provide manpower projections, by trades, for the life of the construction project. This provision also requires the contractor to monitor and report manpower numbers on a daily or weekly basis and compare such numbers against the contractor’s original manpower projections. If the projected manpower is not complied with, the contractor is required to provide a written explanation for the reduced workforce and provide a plan on how to recover lost time and increase manpower. The idea is to stay ahead of the manpower problems and ensure corrections are made as soon as the size of the workforce begins falling below what was planned.

About the Author

Christina A. Koch
Christina A. Koch is editorial director and associate publisher of retrofit.

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