Will stopping immigration cause labor shortages?

Yes — and it's already happening

Both economic theory and current real-world evidence strongly indicate that sharply reducing immigration causes labor shortages, particularly in certain sectors. Here's why, backed by what's unfolding right now in the U.S.

Why This Happens: The Basic Economics

Immigrants aren't just "extra" workers — they've become structurally embedded in the labor force, especially as native-born population growth slows. Net immigration has accounted for close to half of labor force growth, pushing the share of foreign-born workers up to 19.2 percent of the work force in 2024 from under 12 percent in 1995. Similarly, research from the National Foundation for American Policy shows that over 70% of the country's labor-force expansion since 2010 is due to foreign-born workers.

Crucially, this isn't just about low-skill work. The impact of immigrant workers is large at both the low- and high-skill ends of the labor force — immigrants represent a high share of workers in many low-wage, manual labor sectors, while also contributing importantly to high-level technical skills and entrepreneurial energy.

What's Happening Right Now (2025-2026)

The U.S. is currently running a real-world experiment. Immigration enforcement has tightened dramatically since early 2025, and the labor market data shows clear strain:

Overall labor force impact: The Bureau of Labor Statistics household survey for February 2026 shows a decline of 596,000 foreign-born workers since January 2026, and a drop of 1,008,000 since a peak in March 2025. Projections suggest this could compound significantly — the Trump administration's immigration policies could lead to a labor loss to the U.S. economy of approximately 19 million worker years by 2028 and 102 million worker years by 2035.

Construction: This sector is being hit hard. Immigrants make up 34% of all construction workers nationwide, with that share exceeding 60% in trades such as drywall, roofing and plastering. The result: the U.S. must hire 349,000 more construction workers in 2026 to meet demand, while the U.S. added only 181,000 total jobs in 2025.

Agriculture: This may be the most acute case. The Trump administration's own Labor Department acknowledged in an October 2025 filing that "near total cessation of the inflow of illegal aliens presents a sufficient risk of supply shock-induced food shortages," warning that unemployed Americans "will not make themselves available in sufficient numbers, even at current wage levels, to fill the significant labor shortage in the agricultural sector." One projection estimates current immigration policies could drive a 14.5% increase in food and beverage prices from 2024 to 2028.

High-skill sectors too: It's not just manual labor. 68% of companies expect to turn to nearshoring or offshoring in 2026 to address immigration barriers and domestic labour shortages, with this shift particularly pronounced among companies with large H-1B populations — technology and financial/professional services are especially exposed because they rely heavily on specialized workers.

The Key Reason Native Workers Don't Simply Fill the Gap

A common counterargument is that removing immigrant workers should just create job openings for native-born workers. But evidence suggests this substitution doesn't happen smoothly. As mobility of US workers in response to employment opportunities and higher wages has declined over the last decades, it is unlikely that natives will fill many of these jobs especially among non-college educated, older workers who are less likely to move.

A Federal Reserve study reinforces this: researchers examining the impact of unauthorized immigrant workers found a nearly one-for-one causal effect of unauthorized immigration worker flows on employment growth — meaning removing these workers tends to reduce overall employment rather than simply shift it to native workers. Industry-level estimates suggest that recent immigration slowdowns have reduced employment disproportionately in construction and manufacturing.

What Tends to Happen Instead

Rather than natives seamlessly stepping in, the more common adjustments are:

Nuance: It's Not Universal or Uniform

Bottom Line

The evidence — both economic theory about labor force composition and real-time 2025-2026 U.S. data — supports that reducing immigration causes labor shortages, especially in construction, agriculture, food processing, hospitality, and certain high-skill tech fields. The shortages tend to manifest as higher prices, slower industry growth, and unfilled positions rather than being fully absorbed by native workers stepping into those roles.