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Claude Sonnet 5Nov 1, 2026anthropic/claude-sonnet-5-20260630

Will stopping immigration cause labor shortages?

Yes — most economic evidence, including a large amount of recent real-world data, indicates that sharply restricting immigration tends to produce labor shortages, particularly in specific sectors, though the effects aren't uniform across the whole economy.

Why this happens

Immigrants are heavily concentrated in certain occupations that native-born workers are often reluctant to fill. In the U.S., immigrant workers account for 43 percent of farm workers, 30 percent of food production and processing workers, 28 percent of construction workers, 22 percent of workers in personal services, and 20 percent of workers in the leisure and hospitality sector. Many of these roles are filled by undocumented workers specifically because limits on the H2A temporary visa program for farm workers and the lack of interest by U.S.-born workers leave gaps that need filling.

When that supply of workers suddenly shrinks, economists expect — and have observed — a disruption in the availability of undocumented migrant workers will tend to raise costs and create supply shortages.

Real-world evidence from 2025–2026 (U.S.)

The second Trump administration's immigration crackdown provides a live case study. Economists broadly agree the effect has been negative for labor supply:

•The downward shift in the immigrant labor force in recent months is "definitive," said Mark Zandi, chief economist at Moody's. "There's no debate what's going on there."
•Job growth has stalled specifically in immigrant-dependent sectors: job growth among industries that rely more heavily on undocumented immigrants has been "significantly weaker" than in the rest of the private sector... Job growth in those industries — such as hotels, restaurants, construction and home health aides — has been flat since the start of 2025... In July, jobs grew at a 0% rate in immigrant-heavy industries, compared with modest growth elsewhere.
•Construction has been hit especially hard: In construction and extraction occupations, the foreign-born share of employment rose from about 22% in 2003 to almost 36% in 2024, and industry leaders report the Trump administration's crackdown has made labor shortages more acute in residential construction... he's heard of several instances in recent months in which job sites were temporarily shuttered following immigration enforcement actions, because workers stopped showing up out of fear.
•Agriculture is projected to be especially vulnerable: Timothy J. Richards provides evidence of chronic farm labor shortages in California and estimates that if all unauthorized immigrants were removed from the California agricultural sector, farm wages would rise by 42 percent, causing many farms to go out of business.
•Even the aggregate labor force has been affected: net migration may have been negative in 2025 for the first time in at least 50 years, according to estimates from researchers at AEI and Brookings... That squeeze coincided with a rise in joblessness among the native-born — meaning the shortages haven't simply converted into jobs for U.S.-born workers.

Does it just push up wages for native workers instead?

This is the central counterargument from immigration restriction advocates — that fewer immigrants means more opportunities and higher pay for native workers. The evidence so far mostly doesn't support this:

Economists say the disconnect reflects a structural mismatch: In many labor-intensive roles that rely heavily on immigrants, employers can't easily replace them with American workers. A small-business owner trying to raise wages to attract native workers found it didn't solve the shortage, noting she's skeptical higher wages can fix the problem because immigrants are often the only ones willing to take temporary positions, in her experience.

Instead of simply boosting employment for native workers, the shortage has tended to show up as higher prices and slower output. In construction, for instance, the construction industry, which already suffers from labor shortages, is at risk of wage inflation... Average wage growth in July approached 8% in the construction industry, nearly double the national average — wage growth concentrated in a shrinking workforce rather than broad new hiring.

Historical precedent

This isn't unique to 2025. During the COVID-era immigration pause, the number of working-age foreign-born people in the United States was still somewhat smaller than it was in early 2019, and relative to the pre-pandemic trend, there was a shortfall of about 2 million people, and sectors that are especially reliant on immigrant workers had significantly higher rates of unfilled jobs in 2021.

The nuance

•Not all economists agree on magnitude. There's genuine debate about wage effects on low-skilled native workers — Harvard's George Borjas has raised concerns about immigration's negative impact on the low-skilled labor pool, while economist Giovanni Peri has found that immigration has only a minimal effect on the wages of U.S.-born workers.
•Shortages can spur automation. In agriculture specifically, reduced labor availability can accelerate mechanization over time: reducing the availability of immigrants for agricultural work will increase labor costs and eventually lead to new technological innovations that improve farm labor efficiency, though in the short term, higher production costs for fresh fruits, vegetables, and other commodities will lead to reduced domestic production, higher levels of imports, less selection for consumers, and higher food prices.
•Demographics matter long-term. With an aging native population, immigration is the driving force behind America's labor supply growth, accounting for about half of labor force growth each year for the past three decades... The U.S. population is aging, with deaths expected to exceed births by 2030, making immigration increasingly important for offsetting a shrinking native-born working-age population.

Bottom line: Stopping or sharply curtailing immigration doesn't tend to simply "free up" jobs for native workers in a one-to-one way. Instead, the weight of recent evidence — both historical and from the 2025–2026 U.S. experience — shows it creates real, measurable labor shortages concentrated in specific sectors (agriculture, construction, hospitality, caregiving), which tend to show up as higher prices, slower output, and project delays rather than significant gains in native employment.

Citations (18)

  1. 1econofact.orgAcademic
    How Tighter Curbs on Immigration Impact the U.S. Economy | Econofact

    Source excerpt: “Immigrant workers account for 43 percent of farm workers, 30 percent of food production and processing workers, 28 percent of construction workers, 22...”

  2. 2econofact.orgAcademic
    How Tighter Curbs on Immigration Impact the U.S. Economy | Econofact

    Source excerpt: “A substantial portion of these jobs are filled by undocumented workers — for example, 42 percent of crop workers are undocumented because of limits on...”

  3. 3econofact.orgAcademic
    How Tighter Curbs on Immigration Impact the U.S. Economy | Econofact

    Source excerpt: “A disruption in the availability of undocumented migrant workers will tend to raise costs and create supply shortages. ”

  4. 4cnbc.comNews and mediaquality 0.85
    Trump immigration policy may be shrinking labor force, economists say

    Source excerpt: “The downward shift in the immigrant labor force in recent months is "definitive," said Mark Zandi, chief economist at Moody's. "There's no debate what...”

  5. 5cnbc.comNews and mediaquality 0.85
    Trump immigration policy may be shrinking labor force, economists say

    Source excerpt: “For example, job growth among industries that rely more heavily on undocumented immigrants has been "significantly weaker" than in the rest of the pri...”

  6. 6bloomberglaw.comNews and media
    Immigration Crackdown Fails to Deliver Jobs for US-Born Workers

    Source excerpt: “In construction and extraction occupations, the foreign-born share of employment rose from about 22% in 2003 to almost 36% in 2024, according to data ...”

  7. 7bloomberglaw.comNews and media
    Immigration Crackdown Fails to Deliver Jobs for US-Born Workers

    Source excerpt: “Ed Brady, chief executive of the Home Builders Institute, said the Trump administration’s crackdown has made labor shortages more acute in residential...”

  8. 8aei.orgNonprofits and think tanks
    Immigration Enforcement and the US Agricultural Sector in 2025 | American Enterprise Institute - AEI

    Source excerpt: “Timothy J. Richards provides evidence of chronic farm labor shortages in California and estimates that if all unauthorized immigrants were removed fro...”

  9. 9bloomberglaw.comNews and media
    Immigration Crackdown Fails to Deliver Jobs for US-Born Workers

    Source excerpt: “... may have been negative in 2025 for the first time in at least 50 years, according to estimates from researchers at the center-right American Enter...”

  10. 10bloomberglaw.comNews and media
    Immigration Crackdown Fails to Deliver Jobs for US-Born Workers

    Source excerpt: “Economists say the disconnect reflects a structural mismatch: In many labor-intensive roles that rely heavily on immigrants, employers can’t easily re...”

  11. 11bloomberglaw.comNews and media
    Immigration Crackdown Fails to Deliver Jobs for US-Born Workers

    Source excerpt: “But she’s skeptical higher wages can fix the problem because immigrants are often the only ones willing to take temporary positions, in her experience...”

  12. 12cnbc.comNews and mediaquality 0.85
    Trump immigration policy may be shrinking labor force, economists say

    Source excerpt: “The construction industry, which already suffers from labor shortages, is at risk of wage inflation, for example, according to a Bank of America Insti...”

  13. 13econofact.orgAcademic
    Labor Shortages and the Immigration Shortfall | Econofact

    Source excerpt: “As of the end of 2021, the number of working-age foreign-born people in the United States is still somewhat smaller than it was in early 2019. and, re...”

  14. 14econofact.orgAcademic
    Labor Shortages and the Immigration Shortfall | Econofact

    Source excerpt: “Sectors that are especially reliant on immigrant workers had significantly higher rates of unfilled jobs in 2021. ”

  15. 15cfr.orgNonprofits and think tanks
    How Does Immigration Affect the U.S. Economy? | Council on Foreign Relations

    Source excerpt: “Some researchers, such as Harvard University’s George Borjas, have raised concerns about its negative impact on the low-skilled labor pool. Others, su...”

  16. 16aei.orgNonprofits and think tanks
    Immigration Enforcement and the US Agricultural Sector in 2025 | American Enterprise Institute - AEI

    Source excerpt: “Reducing the availability of immigrants for agricultural work will increase labor costs and eventually lead to new technological innovations that impr...”

  17. 17aei.orgNonprofits and think tanks
    Immigration Enforcement and the US Agricultural Sector in 2025 | American Enterprise Institute - AEI

    Source excerpt: “However, in the short term, higher production costs for fresh fruits, vegetables, and other commodities will lead to reduced domestic production, high...”

  18. 18americanprogress.orgNonprofits and think tanks
    Immigrants Make the Labor Market Great - Center for American Progress

    Source excerpt: “Immigration is the driving force behind America’s labor supply growth, accounting for about half of labor force growth each year for the past three de...”