Will stopping immigration cause labor shortages?

Yes — in specific sectors, restricting immigration typically causes labor shortages, at least in the short-to-medium term

The evidence is fairly clear that reducing immigration flows tends to create labor shortages in certain industries, though the effects are uneven across the economy.

Current Evidence (U.S., 2025-2026)

The Trump administration's own Labor Department has acknowledged this dynamic. In a Federal Register filing, the agency acknowledged that labor costs are already a major component of the cost of agriculture, "especially in the specialty crop sectors where relatively large numbers of illegal aliens are employed." The department concluded that "there will be significant labor market effects in the agricultural sector, which has long been pushed to depend on a workforce with a high proportion of illegal aliens."

The warnings were stark: "Without prompt action, agricultural employers will face severe labor shortages, resulting in disruption to food production, higher prices, and reduced access for U.S. consumers, particularly to fresh fruits and vegetables." Notably, officials didn't expect native workers to simply fill the gap — "qualified and eligible U.S. workers will not make themselves available in sufficient numbers, even at current wage levels, to fill the significant labor shortage in the agricultural sector."

This isn't just theoretical. The agricultural industry saw a total drop in employment of 155,000 workers from March 2025 to July 2025, compared to a 2.2% increase in the same period a year earlier. Construction was similarly affected: the 10 states with the highest concentration of undocumented immigrants in construction saw a 0.1% drop in construction employment while other states saw a 1.9% increase.

Real-world anecdotes back this up. In Alabama, a construction superintendent said half of his workers stopped showing up after an ICE raid on another site nearly 230 miles away, out of fear of deportation — even though those workers weren't directly targeted.

Why Certain Sectors Are Vulnerable

Some industries are structurally dependent on immigrant labor:

There's also a secondary "complementary" effect: immigrant workers often support jobs held by native-born workers. As one economist explained, immigrants fulfill a complementary role in the workplace, meaning their jobs necessitate supporting roles more likely held by U.S.-born workers — for example, fewer laborers on a construction site means fewer electricians and managers needed too.

The Broader Economic Debate

This is genuinely contested among economists when it comes to overall wage effects:

Bottom Line

So the honest answer is: it depends heavily on the sector, the wage response, and the time horizon — but the immediate, observable effect in labor-intensive industries has clearly been worker shortages rather than a smooth transition to native labor.