Reshaping the Construction Industry

There’s almost nothing partisan or ideological about trying to stop companies from cheating taxpayers and their workers, which is exactly what happens when some firms misclassify their employees. As our readers know, worker misclassification happens when a company pretends its employees are subcontractors with the intent of avoiding payroll taxes and benefits like health insurance. Unions call it “payroll fraud.” Many of us just call it cheating, plain and simple.The fact that this is a bipartisan issue became extra clear this past week following our report on new efforts in the Texas Legislature to try to rein in the practice, which has rightly been called “a scourge” and “a cancer” in the construction industry. It happens in other industries as well but it is especially rampant in construction.Previous legislative attempts to deal with this in Texas have had mixed success. Now, a new bill has been filed in the Texas House.   

The reason contractors in the Houston area need comprehensive immigration reform immediately is straightforward: to have legal access to immigrant workers so that they can help build all the projects that are planned or are already under construction in this market, which is coming on like gangbusters.  The market is projected to keep booming for at least the next three to five years.There is no doubt in my mind that the greater Houston area is in the midst of an unprecedented building boom.  In my 31 years of closely monitoring this construction marketplace, I have never seen the conditions that exist now.  And it’s projected to continue going forward.  All major market sectors – residential, heavy industrial, highway and civil, and commercial – are on fire and so is every segment within those sectors.In residential, both single-family and multi-family units are being built at record levels.  In heavy industrial, it is both power and chemical plants – driven by natural gas as both a power and feedstock source – that are being built here in Texas and next door in Louisiana.  In highway and civil construction, the Texas Department of Transportation as well as cities and counties all have projects underway, and more projects are on the drawing board.  And in commercial, it is the medical segment, the K-12 school segment, the colleges and universities segment, the warehouse segment, and general purpose office space segments that continue to all see building at near record levels.  

Construction employment hits 5½ year high in November; spending climbs in OctoberEditor’s note:  Construction Citizen is proud to partner with AGC America to bring you AGC Chief Economist Ken Simonson's Data DIGest. Check back each week to get Ken's expert analysis of what's happening in our industry.Nonfarm payroll employment increased by 321,000 in December, seasonally adjusted, and by 2,734,000 (2.0%) over 12 months, the Bureau of Labor Statistics (BLS) reported on Friday. Construction employment rose by 20,000 for the month and 213,000 (3.6%) over the year to 6,109,000, the highest total since April 2009. Residential construction employment (residential building and specialty trade contractors) climbed by 16,700 for the month and 122,800 (5.6%) for the year. Nonresidential employment (building, specialty trades, and heavy and civil engineering construction) increased by 3,600 in November and 90,100 (2.4%) year-over-year. Average hourly earnings for all employees in construction rose 2.7% from November 2013 to November 2014, the largest year-over-year increase since September 2009 and double the 1.3% increase recorded a year earlier. The number of jobseekers who last worked in construction hit an eight-year low of 629,000 and their unemployment rate fell to the lowest November level in seven years:  

ImmigrationWorks USA held a national conference call to discuss President Obama's announcement of an executive action that will grant work permits to up to 4 million unauthorized immigrants – primarily parents of U.S. citizens and permanent residents – who will now be allowed to remain in the U.S. legally.Joining the call were members of the IW legal advisory team to discuss the policy and what it means for you.