Background on the Construction Workforce Crisis
The RAND study Construction Apprenticeships Will Fail to Meet Projected Needs, Exacerbating Housing Crisis describes a significant mismatch between the United States’ booming construction demand and its available workforce. After the COVID-19 pandemic, construction spending surged, fueled by delayed residential projects, rising housing demand, and major federal legislation such as the CHIPS Act and Inflation Reduction Act. These acts channeled billions into domestic manufacturing and clean energy projects, substantially increasing the need for skilled construction labor.
Despite strong economic incentives, the study found that the construction industry would face a shortfall of over 300,000 workers in 2024 alone, even after accounting for immigration, high school graduates, and apprenticeships. Apprenticeships, often seen as a solution, are not expanding quickly enough, and completion rates remain low. The construction labor market is operating under historically tight conditions, with unemployment rates at record lows and wage growth exceeding national averages.
The Apprenticeship System’s Limitations
Registered apprenticeship programs (RAPs) in the United States, particularly in construction, have grown in number and enrollment over the past decade. However, RAND’s study revealed that growth has been uneven and insufficient. Most apprenticeship programs are extremely small; 10 percent of programs account for 82 percent of apprentices, and around a third of programs have only one active apprentice.
Completion rates pose another significant hurdle. Only about 60 percent of apprentices complete their programs, with women and Black apprentices experiencing even lower completion rates. This undercuts the potential of apprenticeships to rapidly and reliably supply the skilled workers needed for the ongoing construction boom.
State-level disparities exacerbate the problem. States like Texas and Florida, which are important to national construction activity, have lower-than-average apprenticeship utilization relative to their working-age populations. The apprenticeship model also remains concentrated on a few traditional trades, such as electricians and plumbers, leaving emerging high-demand fields like solar installation underdeveloped.
Trade Policy and Workforce Needs
Donald Trump’s second term trade policies are heavily oriented toward economic nationalism and reindustrialization, much like his first term but on a larger and more aggressive scale. The emphasis on reshoring manufacturing, bolstering domestic energy production, and investing in infrastructure directly depends on an expanded and skilled construction workforce.
However, the findings of the RAND report highlight a serious structural gap between political ambitions and economic realities. Major manufacturing construction projects, often intended to reduce reliance on foreign imports, cannot proceed on schedule without enough workers to build the factories, plants, and associated housing developments. The resulting labor shortages will likely lead to slower project completion times, higher costs, and reduced competitiveness for U.S. industries.
Trump’s trade war strategies rely on the assumption that the U.S. economy can absorb manufacturing shifts without long delays. In practice, however, workforce shortages in construction will constrain efforts to replace imported goods with domestically produced ones. Factories take longer to build, clean energy facilities encounter bottlenecks, and public works projects that could support economic resilience are delayed.
Impact on Housing, Manufacturing, and Inflation
Housing markets will also suffer under the twin pressures of rising construction costs and labor shortages. Fewer homes built at a time of high demand will continue to drive up housing prices, straining working-class and middle-class families. In turn, high housing costs will reduce the flexibility of the American workforce, hampering the relocation of workers to where new manufacturing jobs might arise.
Manufacturing projects intended to be signature achievements of Trump’s economic policy could face spiraling budgets and delays. As skilled construction workers command increasingly higher wages, the costs of building new semiconductor plants, battery factories, and other strategic infrastructure will rise. These cost pressures could either be absorbed by businesses, reducing their competitiveness, or passed along to consumers, fueling inflation.
Persistent inflation, driven in part by construction labor constraints, could undermine the broader economic narrative that Trump seeks to establish. Higher costs across housing, energy, and manufactured goods could erode public support for the trade war and related policies if they are perceived to deliver fewer benefits than promised.
Immigration Restrictions and Labor Shortages
Another important link between the RAND study and Trump’s trade war strategy lies in immigration policy. Trump’s second term platform emphasizes more restrictive immigration measures. Yet, the RAND study underscores that immigrants are a vital source of construction labor, with one in five construction workers being foreign-born.
Tightening immigration could remove one of the few available relief valves for the construction labor shortage. If immigration is restricted without compensating domestic workforce expansion, the shortage will worsen, undermining key infrastructure and manufacturing goals. This contradiction presents a strategic challenge: achieving reindustrialization goals while curtailing a critical labor source.
Implications for Strategic Industries and National Security
Several strategic industries tied to national security—such as semiconductors, defense manufacturing, and clean energy—depend heavily on timely construction of new facilities. Labor shortages threaten these timelines. Delays could leave the United States vulnerable to continued foreign dependency in critical sectors, weakening the intended impact of Trump’s second-term trade strategy.
If construction bottlenecks prevent new production capacity from coming online, efforts to reduce reliance on China and other foreign suppliers will falter. Moreover, any large-scale public works projects, including modernizations of ports, highways, or military infrastructure, will compete for the same limited pool of construction labor, potentially leading to further project delays and cost escalations.
Potential Policy Responses
Addressing these workforce challenges would require a broader, more aggressive workforce development strategy than has so far been proposed. Potential solutions include:
- Expanding apprenticeship program capacity by encouraging larger apprenticeship cohorts and increasing funding for programs.
- Improving completion rates through better candidate screening, enhanced mentorship, and support services.
- Diversifying apprenticeship occupations to include more trades aligned with emerging industries.
- Reconsidering immigration restrictions for construction-related occupations.
- Investing in alternative training pipelines, such as trade schools and unregistered apprenticeships, to supplement RAPs.
- Streamlining regulatory barriers that slow down apprenticeship program registration and expansion.
However, without a coordinated national effort to expand and stabilize the construction workforce, the trade war’s broader economic goals risk being compromised.
Summary
The RAND study Construction Apprenticeships Will Fail to Meet Projected Needs, Exacerbating Housing Crisis provides a clear warning: America’s construction workforce is not growing fast enough to meet the surge in demand driven by major policy initiatives. Donald Trump’s second-term trade strategy, heavily dependent on infrastructure development, reshoring manufacturing, and energy expansion, will collide with these workforce limitations. If unaddressed, labor shortages will slow project delivery, increase inflation, limit reindustrialization, and erode the strategic advantages sought through a second-term trade war.
