Immigration and Construction

October 2, 2017

Construction workers onsite

As globalisation gathers pace, so immigration is an increasingly hot topic. The breaking down of national borders is largely business driven, as international companies pick and choose where to base their operations. This decision is often motivated by factors including local labour costs, legal and tax regulations, and proximity to raw materials and consumers — although these last two factors are diminishing in importance as fast transportation and e-commerce become the norm. 

Free movement of labour is also beneficial to business and to some degree this has followed on from globalisation. Just as companies will often move to locations where they can employ skilled or unskilled labour at the lowest cost, so skilled and unskilled workers will head for those territories where they can earn the most money for their toil. This movement is made easier by the expansion of integrated labour markets such as the European Union.

 

"Construction is a naturally itinerant industry, reliant on migrant labour to meet its needs. The work moves around; as a result, so do the workers."

 

A moveable feast

But migrant labour is nothing new, especially within the construction industry. Construction work could be described as a moveable feast, and most of the great construction projects worldwide have historically been built by migrant labour. The great pyramids at Giza are now believed to have been mostly constructed by skilled migrant labour, and certainly the railways, bridges and viaducts of Britain's industrial revolution were largely the work of skilled Irish navvies, though frequently suffering from appalling employment conditions. 

Pace of change

Globalisation and its attendant developments in recent years have exacerbated concerns about unchecked migration, however. Public responses including the UK's Brexit vote and the election of Donald Trump with his promises to "put America first" could be viewed as consequences of these concerns. The rise of nationalist movements around the world can also be seen as vehicles of responding to or exploiting insecurity and concern over globalisation. Finally, the threat of international terrorism is perhaps a consequence of the fear provoked by this pace of change, resulting in a desire among governments and the populace to “clamp down” on unregulated free movement.

 

"In 2015, the UK's Chartered Institute of Building (CIOB) published a report warning that stricter regulation of migration could severely damage construction activity across the nation."

 

Filling the gaps

The implementation of this type of policy could, however, have dire consequences for the construction industry. In 2015, the UK's Chartered Institute of Building (CIOB) published a report warning that stricter regulation of migration could severely damage construction activity across the nation. It pointed out that the global construction industry has always relied on migration to fill gaps in the labour market, and that cutting off this supply could have a detrimental effect on the UK economy as a whole.

The report also emphasised that immigration should not be a substitute for proper training of native workers. Indeed, it identified distinct skills shortages that were causing the UK to become over-reliant on skilled migrant workers, such as bricklayers. An ageing construction labour force among the UK population was also a concern, as not enough young people in Britain are entering the industry — and those that are do not receive sufficient training opportunities in needed skills.

Flexible labour

Of course, immigration works two ways. British workers have benefited from the free movement of labour as much as anyone else, travelling across Europe and elsewhere when the construction sector in the UK experienced downturns, such as in the 1980s and 1990s. The industry as a whole relies on an international labour pool comprising flexible skilled labourers who are prepared to go where the work is. While in most countries the local labour market can take care of day-to-day construction, larger specialised projects will almost always need a large number of migrant workers with specialised skills. Recent examples in the UK include the Olympic stadiums and London's massive Crossrail scheme.

 

"While recognising the benefits of immigration, however, governments should act to protect the rights of workers both at home and from abroad."

 

Boom and bust

More than other sectors, construction suffers from a boom and bust economy, with attendant gluts and shortages of labour that can only be alleviated by the employment of migrant workers. This is caused by what is known as the accelerator effect. Fluctuations in the broader economy are amplified in the construction sector, which is highly sensitive to changes in GDP. 

Migrant workers play an important role by filling significant employment gaps within the industry. A December 2008 report by the Institute for Public Policy Research (IPPR) pointed out that even in periods of economic downturn it was predicted that the industry would require over 40,000 additional workers (from abroad) per year. These were not taking jobs from British workers, as is often feared, nor were they pushing down wages; they were simply occupying necessary job roles that could not be filled by the existing native labour market.

Protecting workers' rights

While recognising the benefits of immigration, however, governments should act to protect the rights of workers both at home and from abroad. Providing appropriate training structures and opportunities will help native workers find jobs, while fair competition can be ensured by tackling exploitative employers rather than by obstructing or penalising those travelling in search of work. Enforcing a minimum wage is another step that governments can take, with unions acting as watchdogs on behalf of their members. There are advantages from the construction sector's point of view to a points-based managed migration system, where points are awarded in line with local labour market needs. However, this must be flexible and adaptive enough to allow for sufficient movement to quickly meet changing requirements.

Construction is a naturally itinerant industry, reliant on migrant labour to meet its needs. The work moves around; as a result, so do the workers. Integrated labour markets and increased mobility have generally been beneficial to the sector. The construction industry in a country with closed borders will suffer as major projects will simply not get off the ground due to the lack of available labour. Obviously this will mean fewer jobs for native workers too. We can see then that if a level playing field is established via the processes outlined above, immigrant labour benefits the interests of native labour, rather than being detrimental to it.

Construction workers must go where the work is, and the industry relies on them doing so. As a result, immigration has kept the sector vibrant and profitable. Hopefully it will continue to do so for generations to come.

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