The damage done to the Houston metro area may reach $50 billion in destruction and lost economic output, according to Greater Houston Partnership and Moody’s Analytics. For the entire southeast portion of Texas, the number may be as much as $75 billion. 

Opportunities for business and labor will abound, once the floodwaters subside in the region. Workers will be needed in the construction industry in order to rebuild homes, businesses, and infrastructure. A former president of the Federal Reserve Bank of Dallas, Richard Fisher, said in the aftermath that “Mexican labor” will be needed in rebuilding efforts. Fisher told The Wall Street Journal, “All these business will have to be reconstructed.” He continued, saying “That’s an enormous opportunity, but you can’t rebuild Houston without Mexican labor.”

Indeed, there are some pressure groups that believe that there are not enough immigrant workers across the United States to fill the jobs being opened by the Texas reconstruction project. The National Association of Home Builders (NAHB) reported in July that most of its members are coping with labor shortages in 11 of 15 construction sub-fields. It is in fields related to carpentry where the need is most acute: approximately three-fourths of all NAHB members reported shortages in framing, rough and finished carpentry.

In Texas, the construction industry has relied on illegal immigrant workers. According to a November 2016 Pew Research study, more than 25 percent of the construction workers in Texas are illegal immigrants. About 440,000 of the nearly 1.7  million illegal immigrants living in Texas are in the building trades.

During the housing and mortgage crisis of 2008, many construction workers went into other industries or they simply left for their home countries. While some building firms and immigrant advocates have decried President Trump’s immigration policies for a shortage in Texas, there is evidence that construction labor shortage in Texas may be exaggerated. According to the Center for Economic and Policy Research (CEPR), a report released in July shows there there is significant supply of workers in the construction labor market, despite declining unemployment in the economy as a whole. CEPR found that there are 3.3 unemployed construction workers for every 2.5 job openings: this is a much wider gap than the all-sector average, which has 1.2 unemployed workers for every 1.3 job openings.

The may explain why CEPR’s analysis of Bureau of Labor Statistics data, which shows that  construction industry wages are growing more slowly than wages across all economic sectors. Inflation-adjusted wage growth in June was 0.61 percent for the construction sector, as compared to 0.8 percent for all jobs, according to CEPR. This may also mean that there are construction workers in Texas available to rebuild Houston if higher wages can be expected.
 



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Martin Barillas is a former US diplomat and the editor of Spero News.

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