Will stopping immigration cause labor shortages?
Yes, sharply reducing or stopping immigration would very likely cause or significantly worsen labor shortages in the US (and similarly in other aging developed economies), particularly in key sectors, while slowing overall labor force and economic growth. This follows from demographics, the current composition of the workforce, empirical studies, and recent real-world slowdowns. It is not absolute or uniform across all jobs—effects vary by skill level, sector, and time horizon—and markets can partially adjust via higher wages, automation, or native participation, but evidence shows these adjustments are incomplete, slow, and costly.[1]
Immigrant Role in the Labor Force
Foreign-born workers (immigrants, including naturalized citizens, legal residents, temporary workers, and unauthorized) comprise roughly 18–19% of the US civilian labor force (around 30+ million people in recent years). They have higher labor force participation rates on average and are concentrated in certain industries and occupations:[2]
These are not just “low-skill” jobs; many involve physically demanding work that natives have been less willing or available to fill at prevailing wages and conditions. Immigrants are both complements (enabling native workers in complementary roles or firm expansion) and partial substitutes.[5]
Demographic Backdrop: Native Labor Force Stagnation
The US-born working-age population (roughly 18–65) has slowed dramatically and begun shrinking in recent periods, especially among non-college-educated workers. Baby Boomer retirements, lower fertility (below replacement), and stable-to-stagnant labor force participation rates mean native labor supply growth is weak or negative. Immigration has been the primary driver of labor force growth for decades. Without it, the working-age population would have started contracting earlier, and potential employment growth would be minimal.[1]
Federal Reserve and other analyses project that sharp immigration declines cut “breakeven” monthly job growth (the pace sustainable without shortages or rising unemployment) dramatically—from over 100,000 to potentially under 10,000–70,000 in coming years—while aging intensifies pressures. This constrains GDP growth.[6]
Evidence from Recent Slowdowns and Studies
Recent sharp drops in net migration (from peaks near 2–2.7 million to much lower or near-zero/negative estimates in 2025–2026 amid enforcement and policy changes) have already been linked to:
Economic research consistently finds that immigration inflows help fill vacancies, reduce labor market tightness, moderate wage pressures in tight markets, support firm expansion/investment/profits, and boost overall employment (including for natives via scale and complementarity effects). Low-skill guest worker programs (e.g., H-2B lotteries) show firms expand production when they get more immigrant labor; restrictions cause contraction with little or no (or even negative) benefit to native employment, especially in rural areas—elasticity of substitution is often low.[8]
A post-pandemic high-immigration period (2021–2024) alleviated shortages and dampened wage growth in ways consistent with immigrants filling hard-to-staff roles. Conversely, earlier slowdowns in low-skilled immigration were associated with service-sector shortages.[9]
Historical Precedents
Markets adjust (higher wages attract some natives, automation rises, production relocates or shrinks, prices rise), but adjustments take time, raise costs for consumers (food, housing, care, construction), reduce output/firm formation, and do not eliminate shortages in the interim—especially for seasonal, location-specific, or physically intensive work. Native geographic and occupational mobility has declined.[1]
Caveats, Counterarguments, and Mitigations
In short, given current demographics and workforce composition, stopping or drastically curtailing immigration would cause labor shortages—most acutely in construction, agriculture, hospitality, care, and related trades—constrain growth, and raise costs, without reliably delivering large employment gains for US-born workers. Targeted legal pathways responsive to labor demand, combined with domestic policies (training, automation incentives, participation supports), offer more balanced approaches than abrupt stops. Data and mainstream economic research (Fed banks, academic studies, industry reports) strongly support the shortage risk.
Citations (12)
- https://econofact.org/immigration-and-waning-us-labor-force-growth
Backs: “It is not absolute or uniform across all jobs—effects vary by skill level, sector, and time horizon—and markets can partially adjust via higher wages, automation, or native participation, but evidence shows these adjustments are incomplete, slow, and costly.”
- https://usafacts.org/answers/what-percent-of-the-workforce-in-the-us-are-immigrants/country/united-states/
Backs: “They have higher labor force participation rates on average and are concentrated in certain industries and occupations:”
- http://canada.constructconnect.com/dcn/news/usa/2026/10/immigration-slowdown-threatens-key-source-of-u-s-construction-labour
Backs: “Immigrants have driven nearly all recent net growth in many trades.”
- https://www.kff.org/immigrant-health/the-role-of-immigrants-in-the-u-s-health-care-workforce/
Backs: “Healthcare: ~17% overall, but ~28% of physicians/surgeons and ~30% of long-term direct care workers.”
- https://usafacts.org/articles/which-industries-employ-the-most-immigrant-workers/
Backs: “Immigrants are both complements (enabling native workers in complementary roles or firm expansion) and partial substitutes.”
- https://www.reuters.com/markets/us/us-migrant-halt-may-wipe-potential-job-growth-2025-06-24/
Backs: “Federal Reserve and other analyses project that sharp immigration declines cut “breakeven” monthly job growth (the pace sustainable without shortages or rising unemployment) dramatically—from over 100,000 to potentially under 10,000–70,000 in coming years—while aging intensifies pressures. This constrains GDP growth.”
- https://news.bloomberglaw.com/immigration/immigration-crackdown-fails-to-deliver-jobs-for-us-born-workers
Backs: “Businesses report difficulty filling positions that natives are not taking.”
- https://pubs.aeaweb.org/doi/pdfplus/10.1257/app.20250049
Backs: “Low-skill guest worker programs (e.g., H-2B lotteries) show firms expand production when they get more immigrant labor; restrictions cause contraction with little or no (or even negative) benefit to native employment, especially in rural areas—elasticity of substitution is often low.”
- https://cepr.org/publications/dp21301
Backs: “Conversely, earlier slowdowns in low-skilled immigration were associated with service-sector shortages.”
- https://etcjournal.com/2026/10/26/are-robots-the-answer-to-pushback-against-immigrant-workers/
Backs: “Instead, growers accelerated mechanization (where feasible, e.g., cotton, tomatoes), some production dipped temporarily, and unauthorized immigration rose sharply. Domestic workers did not fully replace the lost labor.”
- https://joelkotkin.com/the-rise-of-ai-blows-apart-the-case-for-mass-migration/
Backs: “Some analyses argue mass low-skill immigration is less necessary long-term amid tech change.”
- https://businessday.ng/world/article/canadian-business-leaders-say-immigration-cuts-is-causing-labor-shortages/
Backs: “International parallels (Canada, Europe) show similar demographic pressures and business complaints about shortages after cuts.”