Immigration Crackdowns Shrink Construction Labor Force
Despite high interest rates, tariffs, and growing concern regarding construction project postponements, many contractors continue to indicate that their leading challenge remains securing trained workers. The issue of labor force shortages in construction has been a common feature in recent decades but has become even more prominent recently as many experienced, reliable older workers retire and many younger ones opt for the gig economy.
To address skills and worker shortages, contractors have often turned to immigrants, particularly from Latin America. According to the Urban Institute, despite representing 17% of America’s population, “Latino people make up more than a third of all construction workers...” Indeed, according to the same source, people of Latin American descent are the only major racial or ethnic group overrepresented as workers in the U.S. construction sector.
But as all observers know, immigration policy has shifted in the U.S. With the White House pressuring U.S. Immigration and Customs Enforcement (ICE) to ramp up arrests to 3,000 per day, three times the quota established during the early weeks of the presidency, businesses across multiple sectors are beginning to feel the impact. Farmers, food processors, landscapers, and contractors are among those poised to be most impacted.
While estimates are difficult to generate, it is clear that a substantial proportion of foreign born construction workforce is undocumented, and construction is not alone. According to Pew Research Center estimates from 2020, unauthorized immigrants comprised 14% of agriculture’s workforce. In leisure and hospitality, which includes segments like restaurants and hotels, the analogous figure was 8%; in manufacturing, it is 6%; and in construction, it is 12%.
In other words, approximately 1 in 12 construction workers is undocumented, which translates into approximately one million workers. More recent data indicate that in recent years, the proportion of construction workers who are undocumented has continued to rise. According to Goldman Sachs data, between 15-20% of the workforce in construction-related industries may be undocumented.
The undocumented workforce (and their employers) is justifiably nervous. Law enforcement has begun cracking down on workplaces, with one such raid in Tallahassee resulting in more than 100 arrests. That raid transpired at a construction site near Florida State University. According to the Tallahassee Democrat (May 29, 2025), once “word got out about the raid... other construction sites in town stopped for the day and workers went home.”
There is a regional element to such things. According to the Tallahassee Democrat, Governor Ron DeSantis and the Florida Legislature “have pushed the state go become the ‘toughest’ on illegal immigration in the country this year, enacting laws and directing hundreds of millions of dollars to state and local law enforcement to expand the state’s authority to detain and house undocumented immigrants to comply with President Donald Trump’s mass deportation mandate.”
This article is not intended to offer any value judgments regarding such policymaking. The sanctity of America’s southern border has and remains a significant concern to many Americans. But contractors may embrace a more nuanced view on such matters, perhaps conflicted by competing considerations such as national security on the one hand and the need to improve the nation’s built environment on the other, including by revamping the nation’s infrastructure, constructing data centers to support next generation technology, and adding to the country’s stock of housing.
The current wave of immigration enforcement is unfolding at a time when the U.S. labor market continues to display signs of tightness. The national unemployment rate remains low by historical standards (4.2% in May 2025), hovering near levels associated with full employment. At the same time, job openings outnumber available workers in several sectors, a condition that has persisted since the post-pandemic economic recovery began. This imbalance has elevated the role of immigrant labor in sustaining economic momentum, particularly in physically demanding occupations.
In 2023, the construction industry established a new benchmark with one out of every four workers foreign-born, the highest share on record. Within fields such as masonry, carpentry, and roofing, one in three workers were born outside the U.S. Meanwhile, the number of native-born workers in construction remains more than 500,000 below its pre-Great Recession peak. That gap persists despite ongoing public and private efforts to attract younger Americans into the skilled construction trades.
Compounding the issue is the economic behavior associated immigration itself. The number of newly arrived immigrants in construction tends to rise alongside housing starts and broader construction activity. Yet in 2022, nearly 130,000 new immigrants joined the industry despite a downturn in single-family housing starts, suggesting a decoupling of labor inflows from construction demand. Such behavior helped to relax structural shortfalls in construction workers. But whatever the demand for construction services will be going forward, that influx of talent stands to be dramatically truncated in the future. In other words, the arrival of immigrant workers will no longer necessarily correspond to any increase in economy-wide demand for construction services.
Construction Industry Voices
As federal immigration authorities intensify their worksite enforcement operations, the construction industry is emerging as one of the most vocal stakeholders. Some industry leaders have been especially blunt in their assessment. Patrick Murphy, CFO of Coastal Construction, indicated that “When there are sudden crackdowns or raids, it slows timelines, drives up costs, and makes it harder to plan ahead.” This would be less of a concern if construction were known for its ability to routinely deliver projects on time and on budget.
Such challenges will be even more difficult to meet going forward. Moreover, despite the influx of immigrant workers, the cost of delivering construction services has skyrocketed since the onset of the pandemic. Delivering and purchasing construction services stands to become even more expensive going forward, driving up the cost of housing, limiting new school construction, and further impacting America’s already beleaguered infrastructure.
In both San Antonio and New Orleans, enforcement actions have affected university and infrastructure projects, contributing to sudden labor shortages and delayed timelines. In Nashville, contractors report a climate of fear that extends beyond the raids themselves. One contractor noted that workers were hesitant to approach even local permit offices, concerned that routine inspections might trigger immigration enforcement.
Beyond organized work sites, federal agents have also targeted day laborers, including those who gather at Home Depot parking lots. These informal hiring zones are a staple of small-scale residential and commercial construction, especially in regions facing acute housing pressures. In southern California, one such raid left workers running in fear, including Junior Ortega, who recounted ICE agents arriving with firearms and demanding identification. He escaped detention only by presenting his green card.
Industry associations have also begun calling for structural reform. Michael Bellaman, CEO of Associated Builders and Contractors, advocates for a market-based merit visa system that would allow foreign-born laborers to legally support industries experiencing workforce shortfalls. In the absence of such reforms, the reliance on undocumented workers will continue even as enforcement efforts become increasingly prevalent, placing employees, their employers, and the quality of America’s built environment at risk.