As cars and trucks zoom by, Rurick Palomino points to the underside of the Theodore Roosevelt Bridge that spans the Potomac River in Washington, D.C., where his crew of about 30 workers is doing demolition work and pouring concrete as part of a $128 million federally-funded refurbishment.

A Peruvian immigrant who came to the United States 25 years ago, Palomino — a U.S. citizen — built his construction firm from scratch after earning an engineering degree and learning the trade firsthand. He once employed 45 workers but has since scaled back. "There's plenty of work — a lot of mega-projects coming — but I'm afraid to take more because I don't have the manpower," he says.

For years, the construction industry — in which on average one in three workers is foreign-born — has struggled wi

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