Will stopping immigration cause labor shortages?

YesSays it is contested

Will halting immigration tighten the labor market? I'll review the latest research on how immigration affects shortages.

Yes, according to most economic and demographic research - stopping immigration completely would cause or substantially worsen labor shortages, particularly in the United States and other aging economies.

1. The workforce would shrink without immigration

•Without the immigration surge of 2022 to 2024, the US working-age population would have been shrinking. The prime-age labor force grew in large part because of immigration

•Pew Research projects that without immigration, the U.S. workforce would decline from 173 million in 2015 to just 166 million in 2035

•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 it would remain relatively flat

•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

That reflects underlying demographics: falling birth rates and baby boomer retirements mean fewer native-born people entering the workforce while even more leave it, leaving fewer people to provide goods and services

> "Demographic shifts and aging populations mean countries like the U.S. will experience an ongoing shortage of workers and hiring will remain challenging for years," said Svenja Gudell, chief economist at Indeed. "Without sustained immigration or a focus on attracting workers on the sidelines of the labor force, these countries simply won't have enough workers to fill long-term demand for years to come."

2. Tightened immigration is already linked to shortages

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

•Labor shortages grow in agriculture, construction, healthcare, food service, and transportation sectors

•Sectors affected include: agriculture, construction, food service, healthcare, and transportation

Recent estimates:

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

•Early estimates suggest that the federal immigration enforcement surge could shrink the nation's workforce by more than 2.4 million people and reduce national gross domestic product (GDP) by more than 7% by 2028

•A Brookings Institution analysis found the Trump administration's immigration surge into US cities last year resulted in 668,000 job losses, creating a "chilling effect" that pervaded local economies

The Federal Reserve Bank of San Francisco also found that recent migration inflow eased labor market tightness, as measured by a reduction in the job vacancy-to-unemployment ratio, because new migrants entered the labor force and likely filled job openings

3. Why shortages happen, not just lower unemployment

Supporters of restriction argue it protects American workers, but a breadth of research indicates:

•The results of state-level analysis indicate that immigration does not increase US natives' unemployment or reduce their labor force participation

•There has been very little divergence in the native born and foreign born unemployment rates, and a breadth of research indicates that immigration can be complementary to native born employment, as it spurs demand for goods and services

•There is simply no evidence that immigration drives up the U.S. unemployment rate or that it drives down wages for American workers

In 2023, immigrants constituted 18.6% of the U.S. civilian labor force, filling critical roles in industries with unmet demands, and a crackdown could tighten the labor market, increasing wages but risking labor shortages and inflation in key sectors. Immigrants accounted for 84.7% of labor force growth since 2019.

Economists at Fwd.us / George Mason University also note that persistent worker shortages, and more specifically immigrant worker shortages, were identified as a major contributor to rising inflation, because when labor is in short supply employers offer higher wages which are passed on to consumers.

4. Nuance - not automatic or uniform

•Short-term vs long-term: Stopping immigration reduces both labor supply and consumer demand for goods and services, so some economists expect little impact on inflation, but a clear decline in labor supply

•Sector and geography: Shortages are most acute in low-wage, physically demanding or licensed jobs that U.S.-born workers are less likely to take - e.g. crop harvesting, caregiving, construction labor - while high-skill tech may feel impacts differently.

•Mitigation is limited: Without sustained immigration, other options are attracting workers on the sidelines, higher automation, higher wages, offshoring, or remote work - but demographic decline of over 3 percent in working-age people over the next decade alone means these are unlikely to fully fill the gap.

> In short: Halting immigration would not simply leave more jobs for native-born workers; in an aging, low-fertility economy it would shrink the total workforce, amplify existing vacancies, slow GDP growth, and make it harder for employers to fill jobs at current wages and prices.

Citations (3)

1fwd.usNonprofits and think tanks
To lower inflation, America needs more immigration to alleviate national labor shortages - Fwd.us
Backs: “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. That reflects underlying demographics: falling birth rates and baby boomer retirements mean fewer native-born people entering the workforce while even more leave it,…”
evidence, article, points to yes. Claim: Without immigration, the U.S. working-age population would have started shrinking in 2012, and falling birth rates and boomer retirements leave fewer workers.
2shrm.orgNonprofits and think tanks
Labor Shortages Forecast to Persist for Years
Backs: “will experience an ongoing shortage of workers and hiring will remain challenging for years," said Svenja Gudell, chief economist at Indeed. "Without sustained immigration or a focus on attracting workers on the sidelines of the labor force, these countries simply won't have enough workers to fill long-term demand for…”
attribution, article, points to yes. Claim: Indeed's chief economist Svenja Gudell says aging populations mean ongoing worker shortages without sustained immigration.
3visaverge.comCommercial content
Will US Immigration Restrictions Lead to a Shrinking Workforce?
Backs: “"Without sustained immigration or a focus on attracting workers on the sidelines of the labor force, these countries simply won't have enough workers to fill long-term demand for years to come.". 2. Tightened immigration is already linked to shortages”
evidence, article, points to yes. Claim: Tightened immigration controls are linked to growing labor shortages in key U.S. sectors and a shrinking workforce.