Builders are beginning to feel the crunch of a labor force — fueled by immigration, often illegal — that’s shrinking, The New York Times reported.
According to the Times, economic growth in Mexico and the aging of the country’s population have reduced the flow of Mexican workers into the United States, with the number of illegal immigrants in America declining to 10.7 million at the end of 2017 from a peak of over 12 million at the height of the housing bubble in 2008.
For builders, the recovery in home building has outpaced the growth of the construction labor force, the Times reported.
“The recent shortage of immigrant workers is impacting housing and housing affordability,” Jerry Howard, chief executive of the National Association of Home Builders, told the Times.
And the bottleneck is adding to the cost of every home built in Dallas, Phil Crone, who runs the association’s Dallas chapter, told the Times.
Were it not for immigrants, the labor crunch would be even more intense. In 2016, immigrants accounted for one in four construction workers, the Times reported, citing one study.
“It is good for wages to go up, but if labor is at a point where employers can’t hire, it is reducing growth,” Pia Orrenius, an economist with the Federal Reserve Bank of Dallas, told the Times. “There’s also considerable wage pressure in small towns and cities that are depopulating, but that is a sign of distress, not of rising productivity.”
The Pew Research Center projects very little growth in the working-age population over the next two decades; if the United States were to cut off the flow of new immigrants, its working population would shrink to 166 million in 2035 from 173 million in 2015.
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