Emerging Immigration Policies Reshape Construction
The functioning of labor markets does not care about ideology. Ultimately, it responds to fundamental laws of supply and demand, incentives, and constraints. Few industries live this reality more intensely than construction, wherein the availability of labor and associated skillsets shape project costs, delivery timelines, and bottom-lines.
While available data often do not neatly differentiate between documented and undocumented workers, statistics supplied by the U.S. Bureau of Labor Statistics indicate that approximately 24% of America’s construction workforce is foreign-born. In California and Texas, America’s two most populous states, immigrants comprise more than 40% of the construction workforce, including in essential specialties like concrete, roofing, and drywall. These workers, both documented and undocumented alike, have long functioned as a stabilizing force in an industry consistently challenged by skilled worker shortages.
It is important to note that more than contractor margins and operational fluidity are at stake. America is in a battle for economic and diplomatic dominion, particularly with China. The Chinese, of course, have demonstrated a capacity to build entire cities quickly, including power plants, roads, bridges, and other forms of civil support. By contrast, America is beset with red tape, frequent community opposition to change, and structural workforce shortages. The upshot is that America faces greater challenge to improve its built environment, thereby bolstering community productivity, quality of life, the absolute size of its economy, and its ability to support defense and other critical expenditures. To the extent that worker shortages become more severe, America’s capacity to change as quickly as required by geopolitics becomes all the more constrained.
On January 20, America inaugurated both a new and a former president. The new administration has swept into office offering an array of reforms taking the form of massive federal government layoffs, far-reaching tariffs, and, of course, far more visible and aggressive enforcement of immigration laws. Many stakeholders are delighted by news that border crossings are dramatically lower. As reported by Axios, the number of migrants illegally crossing America’s southern border declined in February to its lowest level in decades. In February 2025, Border Patrol registered approximately 8,300 apprehensions of migrants who attempted to unlawfully cross the border. There were more than 130,000 encounters in both February 2023 and February 2024.
But based on history, some of those people who otherwise would have entered America would likely have ended up working in construction. That is not to imply that the U.S. should simply open its borders. America is sovereign and should have absolute control over it lets into the nation. That being said, there are projects that need to be built, and potentially far fewer people available to deliver them today and tomorrow.
The Current Reality
Labor scarcity has emerged as a defining characteristic of the construction industry in recent decades. According to the U.S. Chamber of Commerce Commercial Construction Index, 85% of contractors report moderate to high difficulty securing skilled workers. Nearly 70% anticipate that challenge will persist or intensify in coming months.
This is not simply a temporary disequilibrium motivated by cyclical forces. Interest rates are higher than they were in 2022. Architectural billings and other leading indicators of construction activity have been in retreat. As measured by the Job Openings and Labor Turnover Survey, the number of unfilled construction job openings has declined from more than 450,000 at 2023’s end to less than 240,000 more recently. If anything, cyclical forces have helped close the skilled construction worker gap recently. But what plagues America is a structural shortfall that stands to intensify as many of the nation’s most skilled and experienced construction workers hurtle towards retirement or are lured away by other industries searching for talent, including energy production and distribution, manufacturing, and logistics.
The average American construction worker is more than 42 years of age. Retirements consistently outpace new entrants into the trades, and that was occurring during a far more lenient period of immigration enforcement. Immigrant talent has historically served as a mechanism to countervail structural shortfalls. Foreign-born workers constitute 24% of the nation’s construction workforce. These workers do not merely occupy positions; they bolster productivity, moderate labor costs increases, and contribute to contractor profitability.
On the policy front, recent modifications include expanded border enforcement initiatives, increased appropriations for Immigration and Customs Enforcement (ICE) and Customs and Border Protection (CBP) operations, and renewed emphasis on employer compliance. This includes the potential expansion of E-Verify mandates for federal contractors. While these measures are designed to reduce unauthorized employment, they simultaneously risk destabilizing an industry wherein hundreds of thousands of undocumented workers currently perform essential functions.
Expanding enforcement involving employers may ultimately have the greatest impact. According to the Center for American Progress, there are nearly 1.6 million undocumented immigrations working in construction. While many of these are laborers, many are involved in carpentry, painting, and roofing. To the extent that contractors begin to avoid utilizing these workers, labor shortages will expand, perhaps massively, driving up construction delivery costs and delaying project delivery in the process.
Legal pathways for labor market entry have similarly contracted. The annual cap for H-2B visas, those commonly utilized for seasonal and lower-skill positions, remains substantially below market demand, with the U.S. Department of Labor receiving applications exceeding the statutory cap by nearly 300% during recent allocation cycles. To put that into perspective, in FY2024, the statutory ceiling was 66,000 visas, while employers submitted requests for more than 150,000 positions during the initial filing period alone. Particularly concerning for construction stakeholders is that the current immigration framework prioritizes high-skill, high-wage sectors like engineering and information technology. Construction is an industry associated with less accommodation.
At the same time, visa processing inefficiencies and heightened scrutiny of employment-based immigration applications, particularly within the EB-3 category encompassing skilled trades, have rendered circumstances even more challenges for contractors. As of early 2025, green card backlogs for employment-based applicants exceeded 1 million cases according to National Foundation for American Policy analysis.
Looking Ahead
The good news is that the marketplace has begun to adjust. The National Center for Construction Education and Research reports a 15% year-over-year increase in construction training program participation. Growing up during a period associated with the student debt crisis, a higher proportion of Generation Z appears to be interested in alternatives to college, including apprenticeship programs. One can expect a considerable amount of investment in such programs in an environment characterized by stiffer immigration enforcement.
Naturally, the diffusion of technology and emerging processes represents another potential solution. For instance, modular construction methodologies, prefabricating components, and automated systems can reduce costs by approximately 30%, according to a McKinsey analysis. These approaches not only address labor constraints but also improve quality control and can compress project schedules.