September 27, 2006

Latino Labor Report 2006: Strong Gains in Employment

VII. Employment in Construction

No industry has been as vital to the employment of foreign-born workers—and Latinos in particular—as construction. Since 2003, when the labor market began to recover from the recession, the construction industry has accounted for about 40% of the total growth in employment for Latinos. In that time, Latinos have gained almost 1 million jobs in construction, an increase of 52%.2

In the period from 2003 to 2006, Latino employment in construction increased from 1.9 million to 2.9 million (Table 12). The industry added about 345,000 Latino workers between 2003 and 2004, 256,000 in 2004-05 and 381,000 in 2005-06. The proportion of Hispanic workers employed in the construction industry increased from 11% to 15%.

A Boon for Foreign-Born Hispanics

The beneficiaries of the employment boom in construction have largely been foreign-born Hispanics. Between 2003 and 2006, the employment of foreign-born Latino workers in construction increased by 914,000. This means that more than nine out of every 10 construction jobs (93%) landed by Latinos have been filled by foreign-born Hispanics.

More notably, recently arrived Hispanic workers (those who entered the U.S. in 2000 or later) have streamed into the construction industry in large numbers. The employment of those workers in the construction industry increased 671,000 from 2003 to 2006. As a result, the proportion of foreign-born Hispanics who entered in 2000 or later and are employed in the construction industry increased from 18% in 2003 to 30% in 2006.

Jobs Mostly in South and West

Construction jobs for Latinos have been largely concentrated in the South and West. The two regions accounted for 92% of all new construction industry jobs filled by Latinos between 2003 and 2006.

More than half of the job growth (52%) was in the South, where Latino employment in construction increased by 513,000 between 2003 and 2006, by far the most of any region (Table 13). The South, which includes Texas and Florida, is also home to 1.4 million Latino construction workers, again the most of any region.

In the West, which includes California, Nevada and Arizona, 385,000 new construction jobs were filled by Latinos between 2003 and 2006. That accounted for 39% of all the growth in construction jobs for Hispanics.

By comparison, the construction industry in the Northeast and the Midwest did not attract as many Hispanic workers. Employment in the Northeast increased by 75,000 between 2003 and 2006. In the Midwest, it increased by 8,000.

A Katrina Effect?

The South includes Louisiana and Mississippi, both seriously impacted by Hurricane Katrina. Recent trends by region, however, do not reveal that the hurricane had an impact on construction-sector employment for Hispanic workers.

The growth in construction employment for Hispanic workers in the South was not unusual, given recent trends. Between 2005 and 2006, the South added 176,000 Latino workers in the construction industry, compared with 187,000 between 2004 and 2005 (before Hurricane Katrina) and 149,000 between 2003 and 2004.

The recent pattern in employment does not necessarily mean that Hispanic workers did not show up in relatively large numbers in the hurricane-affected areas. To the extent that this was true, the data suggest that it was more a result of Hispanic construction workers relocating from neighboring areas in the South. There is no clear sign that Hurricane Katrina gave an unusual boost to employment in construction for Latino workers either in the South or in the nation at large between mid-2005 and mid-2006.

A Slowdown?

How long can Latinos count on construction? The Department of Commerce recently reported a sharp decline in residential building permits and in housing starts (August 2005 to August 2006). Latinos have benefited from residential construction in recent years and any slowdown could have a serious impact on overall Hispanic employment. On the other hand, industry economists anticipate that job growth in nonresidential construction might make up for the recent slowdown in residential construction (Associated General Contractors of America, 2006).

  1. The time periods used in this section and the following are the first six months of each year (in contrast with quarterly data in the preceding sections). That boosts the sample size needed to analyze data for newly-arrived foreign-born workers. Annual data could have been used for 2003 through 2005, but only the first six months of data are used for comparability with 2006.