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US immigration: Workers wanted

Construction sector fights to retain foreign-born employees with citizenship schemes and other incentives

Contractors secure a wall section on a home under construction at the Toll Brothers Inc. Cantera at Gale Ranch housing development in San Ramon, California, U.S., on Wednesday, Jan. 20, 2016. The U.S. Census Bureau reported a drop in new-home construction for December which probably reflects little more than a pause in a steady uptrend, as housing starts closed out the strongest year since 2007. Photographer: David Paul Morris/Bloomberg©Bloomberg

Thomas Williams is a man on an unlikely mission. A white retired US naval officer living in Texas, he spends much of his time these days chasing after young Mexican-born workers and peppering them with questions about American history and government.

As odd as this might seem, it comes with his current job. Mr Williams, 58, works for KPost, a Dallas roofing company that has topped off such local landmarks as the Perot Museum and AT&T Stadium, home of the Cowboys, the American football club. Like construction groups across the US, KPost relies heavily on immigrants, mostly from nearby Mexico, to do lower-wage physical jobs, and is struggling to find enough workers to keep up with demand.

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Mr Williams is part of the KPost solution. To help reduce labour turnover, he is working to make US citizens out of his immigrant colleagues. The company lends employees who are US residents the money to apply for citizenship, about $900, and forgives the debt if they remain at KPost another year. Mr Williams, an imposing barrel-chested man, fills out the forms and drills applicants on the civics questions asked on naturalisation tests — paying particular attention to confusing north-of-the-border names.

“Every time I see them, I say, ‘Hey, who’s the chief justice of the Supreme Court?” he says. “They’ll remember [Barack] Obama and they might remember the vice-president. But when you had John Roberts as chief justice of the Supreme Court and you had another John as Speaker of the House, Boehner, that messed them up.”

Mr Williams’ persistence is paying off. So far, 22 KPost workers have become US citizens under his tutelage in four years. “Step by step, he was right there,” says Enrique Rodriguez, 29, the first worker to emerge from the Thomas Williams school of citizenship. “He would quiz me at work, on the phone — any chance he had. He would randomly call me and just say, ‘Hey, let me ask you three quick questions.’”

Labour shortages

The KPost conversations are a far cry from the rhetoric on the presidential campaign trail this year as Republican candidates, led by Donald Trump, try to outdo each other in tapping anti-immigrant sentiment. But the requirements of the construction trade are different. US builders do not suffer from too many Mexican workers, but too few; they stand to gain from immigration reform, not lose. The joke in Texas is that if Mr Trump really wants to put up a wall between the US and Mexico, he will have to open the border first to find enough workers to finish the job.

Across the US, the construction sector — which contributes 4 per cent to US gross domestic product — is suffering from chronic shortages of workers that are pushing up wages and slowing down activity. Of the 1,358 companies surveyed last year by the Associated General Contractors of America, 86 per cent had trouble filling positions, up three percentage points from 2014. More than seven out of 10 contractors reported difficulty finding carpenters, 60 per cent for electricians and 56 per cent for roofers. In 2014, a builder called Camden Property Trust installed security guards at sites in Denver, Colorado, and Austin, Texas, to prevent competitors from poaching workers.

“I could be twice the size in terms of revenue if we had the flow of labour that we could be training,” says Chad Collins, owner of Bone Dry Roofing in Athens, Georgia. “We are handcuffed by the lack of a willing and skilled work force.”

The impact is particularly dramatic in Dallas. Even as US recession fears grow, the city and its suburbs are thriving as companies such as Toyota, Facebook and JPMorgan Chase build facilities. “There is a workforce issue,” says Keith Post, KPost chief executive. “People are stealing and overpaying [workers].” Steve Little, the company’s president, says labour costs have risen 15 per cent in the past two years.

Homebuilder Bruno Pasquinelli, president and founder of CB JENI Homes in Dallas, says delays are mounting. “It’s very difficult to predict when a house is going to get finished,” he says. “Houses that we used to build in 22 weeks are now taking upwards of 30 and bad ones could be 40.”

The labour shortages are counterintuitive. US construction employment fell from 7.7m to 5.4m during the downturn, and it was assumed there would be plenty of workers once business recovered. But some industry veterans retired. Others headed to the oilfields as the shale boom gathered pace. And many went home to Mexico — creating a problem, given the sector’s dependence on immigrants.

In the US, foreign-born workers account for 49 per cent of drywall installers and 44 per cent of roofers, according to the National Association of Home Builders.

US-contruction-workers chart

At KPost, 90 per cent of the 270 field workers are Latino, Mr Little says. An informal survey conducted by the FT on top of the Cowboys headquarters being built in Frisco, Texas, revealed that the overwhelming majority of KPost workers installing the roof were Mexican — the rest Guatemalan.

The difficulty for employers is that what comes north can also go south. Using census data, John Burns Real Estate Consultants estimates the number of Mexican-born construction workers in the US fell from 1.89m in 2007 to 1.32m by 2014. A study by the Pew Research Center found the number of Mexicans living in the US illegally fell by about 1m between 2007 and 2014.

The declines came amid a US border crackdown that resulted in nearly 2.9m people being deported between 2008 and 2015. At the same time, attempts at reaching a compromise on immigration reform — supported by the construction industry and hundreds of other US executives — fizzled out in Washington.

US-contruction-workers chart

“It’s pretty clear to me that the illegal immigrant is having a tough time coming back or is not even trying,” says John Burns, the consultant. “I have been telling my clients to prepare for huge cost increases because you are going to have to recruit millenials to stop working at Starbucks and start working in construction.”

Room at the top

The recruiting challenges are particularly daunting up on the roofs where KPost workers ply their trade. Heights pose an obvious hazard, and in Dallas, the heat is off the charts. The average high temperature in July and August is 36C. Reflecting roof materials make it feel like 58C, says Mr Little.

Compounding the retention problem is that roofing, like most construction trades in Texas, apart from areas such as plumbing, is largely non-union. Wages are lower, but mobility tends to be higher. Workers often leave if competitors offer a few dollars more. The lack of union training programmes means they have less incentive to stick with a given line of work.

“Here you can enter and exit construction really easily,” says John Martinez, president of the Regional Hispanic Contractors Association in Dallas.

At KPost, the response has been to forge deeper ties with Hispanic workers. Corporate communications and safety training are conducted in English and Spanish. Tacos and sopaipillas, a Mexican pastry, are served at the company picnic rather than hot dogs and hamburgers. Respect is on the menu, too. “They have a whole different work ethic,” Mr Little says of his Hispanic employees. “I would prefer to have that worker.”

Mr Little, 59, a native of Florida whose business card identifies him as “head coach”, says KPost began to make Hispanic workers feel more at home from 2004. At the time, he says, some construction companies had separate bathrooms for Hispanic field workers and white office staff. At one, he says, “there was a yellow line in the warehouse and a doorway that the Latinos were not allowed to cross”. When he and Mr Post, both white, started KPost, they said there would be “no boundaries. Everybody could use any bathroom. They can use any kitchen. We are all one team.”

Its integration efforts picked up pace after Mr Little met a consultant named Ricardo González of Bilingual America at a conference. Mr González put “our senior management through a Latino culture class and it just opened our eyes”, Mr Little says. One insight involved the turkeys KPost gave out to workers for Thanksgiving. The gesture fell flat with their Mexican workers. As an alternative, KPost distributed $25 phone cards on Mother’s Day so those workers could call home.

“If we were breaking bread and giving thanks, well, they were not breaking bread and giving thanks,” he says. “It’s an American holiday. But Mother’s Day? Everyone in the world has Mother’s Day.”

Now, the labour shortage is pushing KPost in ever-more surprising directions to win the hearts and minds of Hispanic workers. With the flow of Mexican immigrants waning, its focus has shifted to the children of the older immigrants — such as Mr Williams’ student, Mr Rodriguez, the son of a construction worker who has recently returned to Mexico to open a restaurant. Mr Rodriguez, like many younger Hispanics, came to the US as a small child. Others were born north of the border. These young workers want more than a pay cheque. They want careers.

Voting rights

“The big challenge for contractors is making this shift from the first-generation person who came here mainly to work, to survive, and was willing to work 12 to 16 hours a day, to this second-generation Hispanic who is not only looking to survive but to make a life,” says Mr González. “The motivation for the second generation is to show their parents their sacrifice was worth it.”

KPost is embracing compensation structures more commonly found in unionised workplaces. It pays roofers $10 to $26 an hour, depending on their role, and “used to typically give raises based on tenure”, Mr Little says. “Now, we have gone to programmes where you learn certain skills and you can advance accordingly — just like a union.”

Through his work, Mr Williams now finds himself a community organiser, perhaps for the wrong side, as far as he is concerned. Every new citizen at KPost is a potential voter — and probably a Democratic one, given Hispanic tendencies. Mr Williams, a rock-ribbed Republican, who estimates he disagrees with “99.9999 per cent” of everything Mr Obama says, can only shake his head at the implications.

“I tease these guys because now they can vote,” he says. “I tell them, ‘one requirement: I helped you — don’t vote for Democrats.’ But that doesn’t last too long.”

‘Young lions’ — a struggle to entice the next generation
 

Luciano Perez has accomplished a great deal in his life. A schoolteacher from the Mexican state of Durango, he immigrated to the US as a young man, picked up the roofing trade, studied English at night, took courses and eventually obtained credentials to conduct safety training in the construction industry.

But there is one thing the indefatigable Mr Perez, 48, has been unable to do — persuade his US-born son, Alexis, 21, to give up his job in merchandise sales for the Texas Rangers baseball club and follow his father into the roofing business at KPost Company in Dallas, Texas.

“I say, ‘We will give you more money here,’ and he says, ‘I’m OK,’” says the elder Mr Perez, safety manager at KPost. “He’s got a small trophy [as] employee of the month, autographed items by the players, things like that. He’s a millennial. He’s 21 years old. So he’s, ‘No, I’m OK.’”

The conversations in the Perez family highlight one of the big challenges facing the US construction sector. The Mexican immigrants who have done much of the heavy lifting for decades are ageing and finding replacements in the next generation is proving difficult.

“The industry has labelled them ‘the young lions,’” says Steve Little, president of KPost. “Construction is not something that they are necessarily excited about. They want more white-collar jobs or supervisory jobs.”

When they do go into roofing, Mr Little says, the young lions are often looking to become subcontractors rather than employees. “They actually have labour pools of people, crews that they advertise, that will come and do the work for you.” Like other millennials, these subcontractors are adept at using social networks to market themselves. Ryan Little, KPost project management director and nephew of its president, says he receives most pitches on LinkedIn.

Letter in response to this article:

Time to stop begrudging workers a decent wage / From William W Chip

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