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Immigration Reform: Good for the Industry, Good for the Economy

BY DEBRA WOOD

Contractors’ hopes were raised early this year when House Republicans presented an immigration reform plan, but as time wears on, the opportunity for serious reform in 2014 remains doubtful, despite a strong business case for a workable visa system.

“Immigration reform will do a lot for our economy and our industry,” says Paul Diederich, president of Industrial Builders in Fargo, N.D., a member of multiple AGC chapters, and immediate past president of AGC of America. “When you have a large workforce need that cannot be met with domestic sources, you have to be able to fill that with some other method.”

Diederich explains that in some places, talented members of the workforce are still looking for work, while other places cannot find enough workers, particularly those with certain skills, such as trades people who pour concrete and place steel.

“There is a lack of willing craft people in certain parts of the country, and as the economy picks up there will be more, and that could be filled with an immigrant workforce,” Diederich says.

“Those workers are in short supply, because there is a sporadic need.”

Clay Gordon, chief development officer at Nabholz Construction Services in Conway, Ark., a member of multiple AGC chapters, agrees that the industry needs more skilled workers.

“As the nation shifts from manufacturing to a knowledge-based society, so has gone funding and support for trade education and training,” Gordon says. “In the meantime, the poor economy over the past several years forced numerous layoffs and many of those craftsmen have simply retired or joined other industries such as oil and gas. These things combined have led us to where we are today in that we have a shortage of skilled craftsmen and a slim pipeline of youth interested in a career in construction.”

Eric Hedlund, building group manager and chief operating officer at Sundt Construction in Tempe, a member of multiple AGC chapters, explains that nearly 2 million construction jobs were lost during the Great Recession.

“We have had in the last five years, people leaving our industry,” Hedlund says. “They are forecasting that only 10 percent of those who left will return. We have an image problem in our industry.”

The perception problem includes people who do not understand construction pays a living wage and offers opportunities for advancement. Many think it’s just hard labor and would rather work in newer technology companies.

“You have a shortage of U.S. citizens interested in filling the jobs,” Hedlund says.

A 2014 outlook survey conducted by AGC found two-thirds of contractors are experiencing difficulty filling key professional and craft positions, and they expect more difficulty in the coming years, reports Jim Young, director of Congressional relations at AGC.

“As the economy and construction industry rebounds, we are concerned about where future workers will come from,” Young says. “Our contractors want to hire Americans first, but when they can’t, we want them to have another avenue to find a workforce.” Low-skilled workers also are in low supply. America has a better-educated workforce than years ago, and those people are less willing to do physically demanding, low-skilled work. AGC reports in 1950 more than half of American workers had dropped out of high school, but now, fewer than 5 percent of students do not finish high school. During the next decade, the United States will need three million workers to fill jobs that do not require a high school degree. But only 1.7 million new workers, skilled or unskilled, will enter the labor force in these years.

“We need to focus on getting immigrants as a source of labor for the industry,” Hedlund says. “Shortages raise concerns about delivering projects at the same cost, because productivity is different. You don’t have enough people.”

For instance, Sundt has pulled experienced workers from Arizona to complete a job in Texas when sufficient local talent was not available. “Immigration could be a boon to the economy, and it could help accelerate our industry,” Hedlund says.

REFORM PRIORITIES
Immigrants represent about 13 percent of the U.S. population and about 22 percent of the construction workforce. They complement U.S. workers and fill niches that would otherwise go vacant. Immigration reform has been an AGC legislative priority for about 15 years, Young says.

AGC supports reform that strengthens national security and the country’s borders, functions efficiently and fairly, and addresses future workforce needs, including a temporary guest worker program for construction, with length of stay long enough to ensure employers’ training investments are not lost, renewable visas, and employers are able to sponsor employees for permanent status. AGC recommends a flexible cap, with no arbitrary restrictions on the construction industry. Additionally, AGC supports expansion of the H-2B visa program.

Other AGC priorities include federal preemption, one set of laws, not a mix of state laws; no racial profiling; easy-to-understand rules; not holding general contractors responsible for actions of subcontractors; debarment not expanding beyond current law; penalties commensurate with violations; an opportunity for undocumented workers to earn legal status; and a reliable mandatory electronic verification system (E-Verify) that should include only new hires and have reasonable deadlines.

Claudia Dodgen, vice president of people development and employee services at Crowder Constructors in Charlotte, N.C., a Carolinas AGC member, uses E-Verify for new hires in all states and for all types of projects, not just federal work, and finds it easy to use, reliable and efficient.

“It didn’t change workflow,” says Dodgen, or the company’s ability to hire craft workers. “The system works.”

In addition to immigration reform, AGC also has developed “Preparing the Next Generation of Skilled Construction Workers: A Workforce Development Plan for the 21st Century,” which outlines measures to make it easier for schools, construction firms and local construction associations to establish career and technical training programs. The plan also calls for increased funding for the Perkins Career & Technical Education Act and the Workforce Investment Act, two federal programs needing reform and clear accountability measures.

RECENT LEGISLATIVE ACTION
The Senate passed an immigration reform bill in 2013 with some bipartisan support. AGC supported the framework but expressed concern about that bill limiting temporary guest workers in construction to 15,000 annually.

“While there were positive provisions, AGC was very concerned about what that would do for the future of our industry,” Young says.

The House will not consider the Senate bill and proposes a more piecemeal approach. Several bills are being discussed or passed in committees. In January the Republican House leadership outlined some broad principles, but less than a month later, Speaker John Boehner backed away from the plan. The president and Senate were not critical of the principles and gave the House members room to advance its plan, Young says.

Young explained that with the mid-term elections coming up in November, the legislative season is shorter, and it will be more difficult to pass controversial legislation. Gordon added that reform appears dead for now.

“While reform efforts looked promising for a while they have quickly vanished as other topics, like healthcare and the overall economy, have taken center stage,” Gordon says.

WHAT CAN CONTRACTORS DO?
“It will be very important in the next several months, as we get into more of the debate, for AGC members to contact their representatives and stress the need for immigration reform,” Young says. “It will be a divisive issue, and there will be opposition from both sides.”

AGC has pulled together background information, talking points and other materials to help members speak accurately and articulately. Hedlund has already visited Capitol Hill to educate members about the immigration issue and how reform will benefit the industry and the business community.

“Get involved,” Gordon advises. “Talk to your elected officials about the need for good immigration reform policy.”

Young calls immigration reform a national issue and emphasized that the problem affects all contractors, not just those in border states. “It’s time for immigration reform,”

Diederich says. “It would be nice to see ALL of the elected officials come together and do something that’s good for the overall country.”