Will stopping immigration cause labor shortages?

Will stopping immigration tighten labor markets? I'll pull the latest data on immigration's role in workforce shortages.

Short answer: According to most labor economists and recent demographic projections, yes - completely stopping immigration would very likely worsen labor shortages in the U.S., particularly in the short-to-medium term and in specific sectors, though the size of the effect depends on how long immigration is stopped, which sectors, and how employers adapt.

1. Why economists expect shortages

Immigrants are a large and growing share of the workforce

•In 2023, immigrants constituted 18.6% of the U.S. civilian labor force, filling critical roles in industries with unmet demands

•That share rose to a record 19.2% in 2024 - 32.3 million foreign-born workers

•Immigrants comprised 19.2% of the total U.S. labor force in 2024, up from 9.8% in 1994

•Immigrants constituted more than 18 percent (32.2 million) of the 175.3 million people in the U.S. civilian labor force in 2024

•Immigrants accounted for 84.7% of labor force growth since 2019

•Between January 2023 and January 2024, immigrants made up about 50% of the labor market's recent growth

Research from the Federal Reserve Bank of San Francisco found that without the immigration surge of 2022 to 2024, the U.S. working-age population would have been shrinking, and that the prime-age labor force grew in large part because of immigration.

Brookings models estimate a sudden plunge in immigration reduces the labor force available to fill jobs businesses expect to fill, which will dampen employment, GDP and push sustainable monthly job growth well below historical norms - perhaps to 20,000–50,000 or even negative territory in 2026

Other forecasts are starker:

•NFAP forecasts a 6.8 million reduction in the U.S. workforce by 2028 and 15.7 million by 2035 driven by tightened legal and illegal immigration policies

•A separate analysis projects the crackdown will reduce the workforce by nearly 7 million by 2028, and by over 15 million by 2035

•The foreign-born labor force has already declined by about 1.2 million people since January, with participation falling, and in another count fell from 53.3 million in January to 51.9 million by June

2. Where shortages show up first

Analysts note that tightened immigration controls are directly linked to growing labor shortages in key sectors of the U.S. economy.

Shortages are concentrated in agriculture, construction, healthcare and hospitality, producing missed harvests, delayed construction, staffing gaps and slower payroll gains.

Examples cited in 2025:

•The Labor Department said in an Oct. 2 filing the near total cessation of the inflow combined with lack of available legal workforce results in significant disruptions to production costs and threatens stability of domestic food production

•45% of construction firms reported project delays attributable to ICE-related labor shortages

Projections for the future illustrate the demographic driver:

•Under a zero-immigration scenario where immigration stopped for the next two decades, the U.S. working-age population would shrink 11% by 2040

•Under a low-immigration scenario, the working-age population would remain relatively flat - both levels our economy cannot sustain, now during a period of labor shortages and for the long term as population ages into retirement

The Federal Reserve Bank of San Francisco estimates that without immigration the working-age population would have begun shrinking a decade ago.

International comparison - Japan and South Korea:

•Despite severe labor shortages and demographic crises, Japan and South Korea stand out for their restrictive immigration policies and low immigration

•Japan and South Korea maintain restrictive policies with low immigration rates compared to other liberal democracies, immigrants still make up less than 4% of Japan's population

•Research concludes Japan's labor shortages have resulted from a restrictive labor immigration policy, and Japan now has around 85% of municipalities actively seeking additional workers

3. Nuance and counter-arguments

Not all labor markets would be affected equally, and some economists caution against assuming a 1-for-1 job transfer:

•Standard economic view: But economists say there is no clear connection between less immigration and more jobs for Americans. Rather, the prevailing view among economists is that immigration increases economic growth

•Complementarity: Research found for every six male undocumented workers lost, the labor market also loses one male U.S.-born worker, suggesting immigrant and native workers often complement rather than substitute for each other. Heightened enforcement also creates a chilling effect where employment among remaining immigrants declines 4% on average after an ICE surge

Alternative adaptation channels cited by skeptics:

•Firms respond to labor shortages by increasing workload intensity, automation, or hiring fewer workers at the same wage rather than meaningfully raising pay

•Some argue availability of cheaper immigrant labor harms productivity by delaying automation. The government is sending a signal to farmers that by hiring unauthorized workers they do not have to make a transition to a more mechanized, higher productive agriculture

An American Action Forum model projected the U.S. would be short roughly 7.5 million private sector workers by 2020 across all skill levels, and found that increasing the growth rate of immigrant workers by 25 percent across all skill levels would decrease the shortage to 6.4 million, mostly by eliminating middle and high skill labor shortages.

Bottom line

Stopping immigration would not create a uniform shortage overnight - employers would raise wages somewhat, automate, reduce output, or rely on higher participation among native-born workers. But given:

•the aging U.S. population,

•the historically high share of labor force growth attributable to immigrants,

•and the concentration of immigrants in hard-to-fill, physically demanding or lower-paid jobs that native workers have not filled at current wages,

most peer-reviewed and Federal Reserve, Brookings, and BLS-based analyses conclude that a sustained stop to immigration would tighten the vacancy-to-unemployment ratio, slow overall workforce growth, raise production costs in agriculture, construction, healthcare and hospitality, and make persistent labor shortages more likely rather than less.

Citations (1)

1americanactionforum.orgNonprofits and think tanks
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Backs: “The government is sending a signal to farmers that by hiring unauthorized workers they do not have to make a transition to a more mechanized, higher productive agriculture. An American Action Forum model projected the U.S. would be short roughly 7.5 million private sector workers by 2020 across all skill levels, and…”