Will stopping immigration cause labor shortages?

Will halting immigration tighten the labor market? I'll pull current research and forecasts on workforce gaps.

Yes, according to most demographic and labor market research, stopping immigration - or sharply reducing it - would cause or worsen labor shortages in the U.S., especially over the medium to long term.

1. Short-term labor market effects

•Tightened immigration controls are directly linked to growing labor shortages in key sectors of the U.S. economy.

•Industries such as construction, leisure and hospitality, and other services had an above-average share of foreign workers in 2015 and experienced an above-average increase in job vacancy rates from 2016 to 2021 when immigration slowed, suggesting reduced immigration exacerbated labor shortages.

•Employers report staffing shortages across construction, health care, agriculture and tech as immigration tightened, and the U.S. Labor Department said the near total cessation of illegal inflow combined with lack of available legal workforce "results in significant disruptions to production costs and (threatens) the stability of domestic food production".

•Economists, including those at the Federal Reserve, have identified persistent worker shortages, and more specifically immigrant worker shortages, as a major contributor to rising inflation. When labor is in short supply, employers offer higher wages which are passed on to consumers.

•A sudden plunge in immigration reduces the labor force available to fill jobs, which Brookings models say will dampen employment, GDP, and consumer spending and push sustainable monthly job growth well below historical norms — perhaps to 20,000–50,000 or even negative territory in 2026.

2. Long-term demographic effects

The U.S. workforce is aging as the Baby Boom generation heads into retirement, and birth rates have stayed relatively low since the 1970s.

•Without immigration, the U.S. workforce would decline from 173 million in 2015 to just 166 million in 2035. Pew Research Center projections similarly show without immigrants, the total U.S. workforce population ages 25-64 would fall from 173.2 million in 2015 to 165.6 million in 2035.

•The Federal Reserve Bank of San Francisco found that without immigration, the U.S. working-age population would have started shrinking in 2012, not 2025.

•Projections show that, without immigration, the U.S. working-age population will not grow in the years ahead. Under a zero-immigration scenario where immigration stopped for the next two decades, the U.S. working-age population would shrink 11% by 2040.

•The largest segment - those born in the U.S. whose parents also were born in the U.S. - is projected to decline by 8.2 million from 2015 to 2035. The only growth comes from U.S.-born children of immigrants and from new immigrant arrivals.

•The projections indicate that 17.6 million new immigrants will be added to the working-age population by 2035, offsetting the aging or death of other working-age immigrants. Without them, the number of working-age immigrants would decline by 2035 and the total U.S. working-age population would drop by almost 8 million.

3. Scale of projected workforce loss if immigration is cut

A National Foundation for American Policy study projects that the immigration crackdown will reduce the U.S. workforce by nearly 7 million people by 2028, and by over 15 million by 2035.

The study breaks down the projected loss: roughly 2.8 million fewer workers by 2028 due to restrictions on legal immigration, and 4 million fewer from crackdowns on undocumented immigrants. By 2035, about one-third of the total decline would be linked to legal immigration policies.

The study also warns these restrictions could reduce annual GDP growth by about half a percentage point through 2035 and increase federal debt.

4. Counterarguments and nuances

Not all analysts agree the effect is large in all circumstances:

•Administration officials argue that these policies will encourage growth in the native workforce by tapping into underutilized American talent.

•Some economists note that while the number of immigrants is very large, the impact on the overall economy is actually very small, or "minuscule", because immigrants also increase demand for goods and services, roughly offsetting their contribution to labor supply. Others note firms may respond to shortages with automation, increased workload intensity, or by hiring fewer workers rather than meaningfully raising pay.

•Research on the labor market shows that rather than taking jobs away from native workers, immigrants often fill roles that are high in demand yet low in supply, and there is simply no evidence that immigration drives up the U.S. unemployment rate or that it drives down wages for American workers in the aggregate. Differences in language skills significantly limit direct competition for many jobs.

In summary: Stopping immigration would not cause an immediate shortage in every occupation, but given an aging population, low birth rates, and high labor-force participation among immigrants, most mainstream projections conclude the working-age population would shrink and shortages would intensify - particularly in agriculture, construction, hospitality, healthcare, and other service sectors that historically rely heavily on foreign-born workers.

Citations (3)

1fwd.usNonprofits and think tanks
To lower inflation, America needs more immigration to alleviate national labor shortages - Fwd.us
Backs: “Labor Department said the near total cessation of illegal inflow combined with lack of available legal workforce "results in significant disruptions to production costs and (threatens) the stability of domestic food production". Economists, including those at the Federal Reserve, have identified persistent worker…”
2pewresearch.orgNonprofits and think tanks
Immigration projected to drive potential U.S. labor force growth through 2035 | Pew Research Center
Backs: “A sudden plunge in immigration reduces the labor force available to fill jobs, which Brookings models say will dampen employment, GDP, and consumer spending and push sustainable monthly job growth well below historical norms — perhaps to 20,000–50,000 or even negative territory in 2026. 2.”
3allwork.spaceNot yet classified
Immigration Crackdown Could Cut 15M From The U.S. Workforce
Backs: “working-age population would drop by almost 8 million. 3. Scale of projected workforce loss if immigration is cut. A National Foundation for American Policy study projects that the immigration crackdown will reduce the U.S.”