Will stopping immigration cause labor shortages?
The St. Louis Fed study finds no evidence immigration shortfalls caused tight labor markets, while other sources (CFR, Washington Post, Immigration Forum) link immigration curbs to shortages.
Short answer: It depends on the sector, but in several key industries, yes — and there's real-world evidence of this happening now.
Where labor shortages are most likely
Immigrants make up a disproportionate share of workers in certain physically demanding, low-wage sectors that many U.S.-born workers avoid. Foreign workers make a particular contribution in low-wage, manual labor sectors where U.S. citizens typically prefer not to work, accounting for 43% of farm workers, 30% of food production and processing workers, 28% of construction workers, and 20% of leisure and hospitality workers. In agriculture specifically, experts say the industry could suffer as immigration crackdowns continue, since 68% of farm laborers in fiscal year 2021–22 were foreign-born.
Current evidence (2025 U.S. immigration crackdown)
The Trump administration's recent enforcement actions provide a real-time test case:
The counterargument
Not all economists agree this is inevitable. A St. Louis Fed study of COVID-era immigration restrictions found the opposite pattern: no evidence that immigration shortfalls caused the tight post-pandemic labor market — the immigration deficit had largely recovered before labor tightness increased, and hardest-hit states/industries didn't see larger tightness increases. This suggests other factors (retirements, demand shifts, savings buffers) can also drive shortages, and immigration's role isn't always the dominant one.
Underlying structural pressure
Even without policy changes, demographics are working against labor supply: the U.S. birth rate has been declining since 2007, a long-term trend showing no signs of reversing, and for years this has been offset by steady in-migration. Many economists note that immigration is one of the most effective tools for maintaining a stable ratio of workers to retirees and supporting long-term economic competitiveness.
Bottom line
Stopping or sharply cutting immigration doesn't cause shortages everywhere equally — but in sectors like agriculture, construction, hospitality, and eldercare, where immigrants fill a large share of physically demanding roles domestic workers are reluctant to take, curbing immigration has already coincided with measurable staffing gaps, rising wages, and higher consumer prices in 2025. Whether this qualifies as a "shortage" long-term also depends on wage adjustments, automation, and whether native-born workers eventually fill the gap — economists disagree on how completely that substitution happens.
Citations (11)
- How Tighter Curbs on Immigration Impact the U.S. Economy | Econofact
Source excerpt: “Beyond the aggregate numbers, foreign workers make a particular contribution in low-wage, manual labor sectors of the economy where U.S. citizens typi...”
statistic, article, points to yes. Claim: Foreign workers are 43% of farm workers, 30% of food production, 28% of construction, and 20% of leisure and hospitality workers.
- How Does Immigration Affect the U.S. Economy? | Council on Foreign Relations
Source excerpt: “Experts say the agricultural industry in particular—in which 68 percent [PDF] of farm laborers for fiscal year 2021–22 were foreign-born—could suffer ...”
statistic, article, points to yes. Claim: 68% of farm laborers in fiscal 2021–22 were foreign-born, so agriculture could suffer from crackdowns.
- Opinion | Immigration crackdown causes massive shortages of unskilled labor - The Washington Post
Source excerpt: “Nearly 3 million left the U.S. in 2025, according to the Department of Homeland Security. The agency says that 2.2 million “self-deported” while some ...”
statistic, article, points to yes. Claim: Nearly 3 million left the U.S. in 2025 per DHS: 2.2 million self-deported and about 675,000 removed.
- How Does Immigration Affect the U.S. Economy? | Council on Foreign Relations
Source excerpt: “Nationwide, the number of foreign-born workers declined by more than one million between January and August 2025, BLS data shows.”
statistic, article, points to yes. Claim: Foreign-born workers declined by more than one million between January and August 2025, per BLS.
- How Does Immigration Affect the U.S. Economy? | Council on Foreign Relations
Source excerpt: “Since returning to office in 2025, President Donald Trump has reversed many of his predecessor’s policies and followed through on a campaign promise t...”
evidence, article, points to yes. Claim: Job growth in industries reliant on undocumented labor has been weaker than the rest of the private sector since 2025 began.
- How Does Immigration Affect the U.S. Economy? | Council on Foreign Relations
Source excerpt: “The Labor Department warned in October 2025 that the Trump administration’s immigration policies risk creating a labor shortage in the sector. ”
attribution, article, points to yes. Claim: The Labor Department warned in October 2025 that immigration policies risk creating an agricultural labor shortage.
- U.S. Workforce Challenges: How Immigration Enforcement Is Impacting the American Economy - National Immigration Forum
Source excerpt: “Hotels and restaurants in major tourist destinations have long relied on immigrant labor, and the combined effects of increased deportations and reduc...”
evidence, article, points to yes. Claim: Hotels and restaurants in tourist destinations struggle with staffing, reducing capacity and raising operating costs.
- U.S. Workforce Challenges: How Immigration Enforcement Is Impacting the American Economy - National Immigration Forum
Source excerpt: “Although many factors contribute to higher price As a consequence, the cost of food in restaurants increased 3% between December 2024 and September 2...”
statistic, article, points to yes. Claim: Restaurant food costs rose 3% and hotel prices 2.6% between December 2024 and September 2025.
- The Effect of COVID-19 Immigration Restrictions on Post-Pandemic Labor Market Tightness
Source excerpt: “We find no evidence to support the hypothesis that the immigration shortfalls caused the tight labor market, for two main reasons. First, while the im...”
evidence, article, points to no. Claim: St. Louis Fed found no evidence that COVID-era immigration shortfalls caused the tight post-pandemic labor market.
- US employers face labor-shortage headaches amid declining fertility rate, immigration crackdown
Source excerpt: “The US birth rate has been declining since 2007, when an average 2.12 babies were born to women of a childbearing age. And that’s been a long-term tr...”
evidence, article, points to yes. Claim: U.S. birth rate has declined since 2007, a long-term trend, adding structural labor supply pressure.
- U.S. Workforce Challenges: How Immigration Enforcement Is Impacting the American Economy - National Immigration Forum
Source excerpt: “Many economists note that immigration is one of the most effective tools for maintaining a stable ratio of workers to retirees and supporting long-ter...”
attribution, article, points to yes. Claim: Many economists say immigration is an effective tool for maintaining the worker-to-retiree ratio and long-term competitiveness.