Will stopping immigration cause labor shortages?
This is a well-established topic in economics, but let me check for current examples and data to ground the answer.## Short answer: Often yes, especially in the near term, particularly in specific sectors — but it's not automatic everywhere, and effects depend heavily on which workers, which industries, and how fast the change happens.
The mechanism
Immigrants make up a disproportionate share of workers in certain industries. About 34% of construction workers are immigrants, versus the 20% average across all sectors, and in trades like drywall installers or plasterers, the share is closer to 60%. When that labor supply is suddenly restricted, employers in those sectors can't easily replace workers, and gaps emerge.
Real-world evidence (U.S., 2025)
Current U.S. immigration enforcement is providing a live case study. Stricter border enforcement starting mid-2024, followed by increased deportations and other changes to immigration policy in 2025, have caused job growth in industries more reliant on unauthorized immigrants to be flat this year — including construction, hotels, restaurants, home health care, and several other industries in manufacturing, technology, and services.
Specific sector impacts include:
Why the effect can be severe: demographics compound it
This isn't just about removing existing workers — it also removes a key source of future labor growth. The US birth rate has been declining since 2007, and that's been a long-term trend that hasn't shown any signs of reversing. As one workforce expert put it, "for a very long time, we've been able to sort of soften the effects of that... because we've had a pretty steady or healthy amount of external in-migration." Immigrants had become an increasingly large share of the workforce — foreign-born workers made up 19.2% of the US workforce in 2024, the highest share since the agency began tracking in 1996. Cutting off that inflow removes a major buffer against an aging, slower-growing native population.
It's not universal — some economists see nuance
Not every economist views this purely negatively. A Dallas Fed labor economist noted that cracking down on illegal immigration specifically could be beneficial if paired with reform: the crackdown on illegal immigration could be a good thing if it leads to permanent solutions — "If you can stop undocumented immigration, then great." The concern is less about immigration itself and more about the lack of legal pathways/status — "Lack of permanent status is costly to migrants, employers, and the broader economy," since workers are "vulnerable to policy changes triggered by a change in administration, most recently the threat of mass deportations."
Comparative example: Canada
Canada offers a similar pattern showing how central immigration has become to labor supply. Given Canada's aging population, growth in both temporary and permanent immigration has been essential to supporting economic growth and responding to labor market shortages, and now contributes to nearly 100% of Canada's labor force growth. In sectors like agriculture, long-term labour shortages caused over 28,000 positions to go unfilled in 2022, and the gap in the sector between labour demand and supply is expected to reach 15% by 2030.
Bottom line
Stopping or sharply reducing immigration does tend to cause or worsen labor shortages in industries that are immigrant-heavy (construction, agriculture, hospitality, home health care, food processing) — especially in economies with aging native populations and declining birth rates. The effects show up as unfilled positions, slower job growth, wage inflation in affected trades, and downstream price increases for consumers. Whether this is a "problem" or a "correction" is debated — some argue it pressures wages up for native workers, while others argue it creates bottlenecks that raise costs and constrain economic growth in labor-scarce sectors. The size of the effect depends heavily on how much of a given industry's workforce is foreign-born and how quickly the labor supply is cut off versus phased down with alternatives (automation, wage increases, domestic recruitment) in place.
Citations (14)
- Trump immigration policy may be shrinking labor force, economists say
Source excerpt: “... About 34% of construction workers are immigrants, versus the 20% average across all sectors, the report said. In trades like drywall installers or...”
statistic, article, points to yes. Claim: About 34% of construction workers are immigrants versus a 20% average across all sectors, with drywall installers and plasterers near 60%.
- Slowing immigration has halted job growth in some industries | PIIE
Source excerpt: “Stricter border enforcement starting mid-2024, followed by increased deportations and other changes to immigration policy in 2025, have caused the US ...”
evidence, data page, points to yes. Claim: Stricter border enforcement from mid-2024 and increased deportations in 2025 have affected job growth in immigrant-reliant industries.
- Slowing immigration has halted job growth in some industries | PIIE
Source excerpt: “Job growth in industries more reliant on unauthorized immigrants has been flat this year, according to the Labor Department’s nonfarm payroll survey d...”
evidence, data page, points to yes. Claim: Job growth in industries more reliant on unauthorized immigrants has been flat this year, including construction, hotels, restaurants and home health care.
- 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...”
statistic, article, points to yes. Claim: Construction, already short of labor, is at risk of wage inflation, with July wage growth near 8%.
- U.S. Workforce Challenges: How Immigration Enforcement Is Impacting the American Economy - National Immigration Forum
Source excerpt: “Many farms report difficulty finding enough workers during critical harvest periods, a challenge that has intensified in the first half of 2025 due to...”
evidence, article, points to yes. Claim: Farms report difficulty finding harvest workers, intensified in 2025 by interior enforcement, leaving produce unharvested and raising costs.
- 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 relying on immigrant labor struggle to maintain service levels, with reduced capacity and higher operating costs.
- U.S. Workforce Challenges: How Immigration Enforcement Is Impacting the American Economy - National Immigration Forum
Source excerpt: “As a consequence, the cost of food in restaurants increased 3% between December 2024 and September 2025. Similarly, the cost of staying at hotel and m...”
statistic, article, points to yes. Claim: Restaurant food costs rose 3% and hotel/motel costs 2.6% between December 2024 and September 2025.
- 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...”
background, article, points to yes. Claim: The US birth rate has been declining since 2007, a long-term trend with no sign of reversing.
- US employers face labor-shortage headaches amid declining fertility rate, immigration crackdown
Source excerpt: ““And for a very long time, we’ve been able to sort of soften the effects of that, or mitigate some of them, because we’ve had a pretty steady or healt...”
attribution, article, points to yes. Claim: A workforce expert says in-migration has softened the effects of declining birth rates.
- US employers face labor-shortage headaches amid declining fertility rate, immigration crackdown
Source excerpt: “According to the Bureau of Labor Statistics, foreign-born workers made up 19.2% of the US workforce in 2024, the highest share since the agency began ...”
statistic, article, points to yes. Claim: Foreign-born workers were 19.2% of the US workforce in 2024, the highest share since tracking began in 1996.
- More industries want Trump’s help hiring immigrant labor after farms get a break • Stateline
Source excerpt: “· In a Nov. 25 interview with Stateline, Orrenius said the crackdown on illegal immigration could be a good thing if it leads to permanent solutions. ...”
attribution, article, neutral. Claim: Dallas Fed economist says cracking down on illegal immigration could be good if it leads to permanent solutions.
- More industries want Trump’s help hiring immigrant labor after farms get a break • Stateline
Source excerpt: “Trump migrant deportations could threaten states’ agricultural economies · In fiscal year 2025, which ended in September, there were about 209,000 H-2...”
evidence, article, points to yes. Claim: Lack of permanent status is costly to migrants, employers and the economy, leaving workers vulnerable to deportation threats.
- CIMM – Labour Shortages – November 25, 2024
Source excerpt: “Key Messages - Given Canada’s aging population, growth in both temporary and permanent immigration has been essential to supporting economic growth ...”
evidence, official document, points to yes. Claim: Given Canada's aging population, immigration is essential to economic growth and addressing labor shortages, contributing nearly 100% of labor force growth.
- CIMM – Labour Shortages – November 25, 2024
Source excerpt: “- In agriculture, long-term labour shortages have caused over 28,000 positions to go unfilled in 2022. The gap in the sector between labour demand and...”
statistic, official document, points to yes. Claim: Agricultural labour shortages left over 28,000 positions unfilled in 2022, with the demand-supply gap expected to reach 15% by 2030.