Trump Immigration Enforcement Exacerbates U.S. Construction Labor Shortage
The Trump administration’s aggressive immigration enforcement is intensifying an already severe labor shortage in the U.S. construction industry, threatening project timelines, driving up costs, and complicating the nation’s housing crisis.
Last July, construction superintendent Robby Robertson was overseeing a $20 million recreation center project in Mobile, Alabama, when he encountered a sudden workforce disruption. Following a high-profile ICE raid at a construction site in Florida—more than 230 miles away—roughly half of his crew stopped showing up, fearful of deportation. The resulting three-week delay cost an estimated $84,000, including $4,000 per day in liquidated damages.
New research confirms this is not an isolated incident. A recent National Bureau of Economic Research working paper found that employment among likely undocumented immigrants fell 4% on average in areas with recent ICE activity. Construction was hit hardest, with a 7.5% drop in undocumented worker employment. According to the Associated General Contractors of America (AGC), immigrants make up approximately 35% of the construction workforce.
A Pre-Existing Problem Made Worse
Even before the current immigration crackdown, the construction industry faced chronic labor shortages. Last year, builders broke ground on just 1.36 million new homes—a slight decline from 2024—far below the 3 to 4 million additional units economists say are needed to ease the housing shortage.
The Associated Builders and Contractors estimates the industry must add 349,000 workers in 2026 alone to keep pace with demand. That figure exceeds total U.S. job growth for all sectors in 2025.
Ken Simonson, chief economist at AGC, notes that construction is particularly vulnerable due to demographic headwinds. The workforce is aging rapidly, with Baby Boomers’ share dropping from 20.6% in 2019 to 14.2% by 2023. Meanwhile, Gen Z accounts for only 14% of payroll, and the population of 18-to-22-year-olds has already peaked.
“If the supply of immigrants is cut off,” Simonson said, “it will get much harder for the construction industry to fill positions.”
Broader Economic Ripple Effects
The consequences extend beyond construction sites. Fewer immigrants not only reduce direct labor supply but also slow overall population growth, dampening future demand for housing, schools, retail, and infrastructure.
Elizabeth Cox, co-author of the NBER study, points to both direct removals and “chilling effects.” Heightened fear of enforcement has caused many immigrants—documented and undocumented—to withdraw from the labor market. Because immigrant workers often fill complementary roles, their absence also reduces demand for U.S.-born workers in supervisory, skilled trades, and support positions.
The result: higher project costs, delays, and wage pressures as firms compete for a shrinking pool of available labor. These added expenses are ultimately passed on to consumers in the form of higher home prices and construction costs, according to Rice University’s Tony Payan.
Limited Solutions
The construction industry lacks a dedicated visa program comparable to agriculture’s H-2A. The existing H-2B visa for non-agricultural workers is capped, temporary (often one year), and ill-suited for year-round projects that require trained, reliable crews.
While some firms are turning to automation and AI, these technologies remain expensive and still require human oversight. Raising wages helps attract workers but fuels poaching across an already tight labor market.
Construction executives, Payan said, “are really at a quandary… reaching into the depths to compete for the available labor. It essentially means greater costs.”