In circling back to a previous article, I’ve been flogging myself over the issues surrounding the topic of labor, how it relates to the building industry and, more pointedly, to the impact it has on construction estimating. As previously stated, the current climate is about as murky as a London fog on a new moon. Of course, the usual suspects—hourly rate vs. productivity—are predictably muddying the waters. But an additionally crippling factor, an increasing shortage of manpower, has made matters even worse.
In briefly recapping, I established that the growing shortfall of help (anticipated to be 500,000 bodies in 2024) has been historically plagued by a combination of poor compensation, expectation of retirement in large numbers and weak recruitment, among others. Can the gloom and doom get much worse? Apparently so.
Runaway inflation, which had once seemed to ease a bit, appears to have reared its ugly head once again. In fact, if the current conditions run their course as expected, estimators will likely have to increase already inflated rates in order to meet the deficit, a move that is likely to exacerbate an impending economic downturn.
But never being one to revel in the depths of despair, I have been teasing at a potential remedy that may turn the entire plight around. This prospective resolution relates to a parallel concern that has churned the economic tides for decades, if not longer. Of course I am referring to the issue of immigration, a subject of extreme controversy among many of us, to say the least. But while some serious merit must be placed with a strong opposition against allowing anything like open border policy (after all, illegal immigration is illegal, regardless of what euphemism you dress it up with), neither does mass deportation seem to be a feasible response to the reality we are currently presented with.
Regardless, mine is an economic argument and not a political one. That is to say, with a little wit and a lot of wisdom, one might easily recognize opportunity over opposition. Consider the circumstance: We have a building industry that is bemoaning a critical labor deficit, and a mass influx of people who are presumably unemployed. What could possibly be wrong with an amiable marriage of those problems?
There are always problems to be overcome with any marriage, this economic one being no exception. There will be administrative problems, the wage vs. productivity issue, skill development and cultural concerns (language barrier), to name a few. While these concerns are of relative significance, none are insurmountable.
Administrative problems. As of January 2022 an estimated 11.3 million undocumented immigrants were living within the borders of the United States. Current surges in those numbers make it difficult if not impossible to determine more recent numbers with any accuracy. And while debates may continue over specific programs, it seems imperative that legislative obstacles be immediately eased to greater allow programs like relative-sponsors, temporary employment and guest worker agendas to flourish, if only to alleviate the impending unemployment debacle that is about to unfold.
Skills development. Among several rather disturbing revelations in my previous piece regarding labor shortfalls, was my disclosure that apprenticeship programs make up a mere fraction of the total workforce, and that one of every four trades persons is currently reaching retirement age. But those gloomy predictions contradict some more positive developments. According to the U.S. Department of Labor, “Registered apprenticeship is a proven solution for recruiting, training and retaining world class construction talent in good quality jobs. In 2023, there were over 340,000 registered apprentices in the construction industry—a 28% increase over the past five years.” Clearly, training is key to development of a skilled workforce, and the fact that the vast majority of recent immigrants have come here to better themselves economically indicates a positive step toward fulfillment of that training.
Wage vs. Productivity. Another positive aspect of an expanding immigrant workforce is a stabilization of wage levels. This will be a big plus for the construction industry in general, and in particular for construction estimators, who have historically seen wage levels as a big question mark.
While immigration may continue to be a hot-button issue for many (and perhaps rightfully so), I tend to be a bit cooler in my outlook on the matter. I see it as a potential resolution to the critical shortage of manpower that we are currently experiencing in construction. After all, when a deficiency meets with an opportunity, the two should naturally cancel each other out of mutual necessity. That’s just common sense.
