Undocumented workers make up a sizable share of the construction workforce, with over 20% of them represented in skilled trades, such as drywall, roofing, painting, and flooring. Given their role in residential construction, president-elect Donald Trump’s proposed deportation and closed-borders policies have raised questions about potential impacts on the industry.
While it is unclear what exactly the future of the industry will look like, historical data could provide insight into the role policy plays on the workforce, according to John Burns Research and Consulting, a housing market research platform. Data suggest that a major reduction in undocumented labor could lead to short-term labor shortages and increased wage pressures. Labor supply shocks would likely lower construction output, though some industry adaptation could occur over time. However, the extent of these impacts would likely vary widely across firms and regions, with certain areas and sectors facing more significant disruptions.
Some localities will be more impacted than others: Localized enforcement under programs like 287(g) could have targeted impacts on construction-heavy regions. Census data show that areas with high concentrations of undocumented workers include Nevada, Texas, Florida, New Jersey, and California. Such regions are likely to experience the greatest disruptions, with reduced construction output and increased costs for construction services. Long-term impacts depend on how quickly businesses adapt and whether displaced labor can be effectively replaced (and again, evidence from the paper cited above is not promising on this front). Read more
