Will stopping immigration cause labor shortages?
Short answer: Yes, largely — and it's already happening in some sectors
The economic consensus, backed by both historical labor-force data and real-time evidence from current U.S. policy, is that sharply reducing immigration tends to produce labor shortages rather than simply freeing up jobs for native-born workers.
Why immigration matters so much to labor supply
Immigrants are not a small slice of the workforce — they're deeply embedded in specific industries. In construction, foreign-born workers represent about 29% of the workforce, and in other key sectors including professional and business services, transportation and utilities, leisure and hospitality, manufacturing, and agriculture, immigrants fill at least one in five positions. In agriculture specifically, the agricultural industry could suffer as immigration crackdowns continue, since 68 percent of farm laborers for fiscal year 2021–22 were foreign-born.
Demographically, immigration has become the primary driver of U.S. population and workforce growth. Between 2020 and 2024, immigration accounted for 83% of net population growth, and 20 states would have lost population without immigration. Modeling of a hypothetical zero-immigration scenario found under a zero-immigration scenario where immigration stopped for the next two decades, the U.S. working-age population would shrink 11% by 2040.
What's happening right now under the current U.S. immigration crackdown
This isn't just theoretical — it's showing up in real-time data. Nationwide, the number of foreign-born workers declined by more than one million between January and August 2025, according to BLS data. Economists tracking the effects have found concrete impacts: job growth among industries that rely more heavily on undocumented immigrants has been "significantly weaker" than in the rest of the private sector, according to Jed Kolko, a senior fellow at the Peterson Institute for International Economics. Regionally, labor force growth has been "stagnant" in states like Texas and Florida with high immigrant arrests per capita, according to Oxford Economics senior U.S. economist Matthew Martin, since Texas and Florida have seen more intense crackdowns than California, New York, and New Jersey.
Construction has been hit especially hard: the Associated General Contractors of America found about 80 percent of construction firms are having a tough time filling positions, including 44 percent who have recently been forced to raise their prices. One industry estimate suggests the U.S. must hire 349,000 more construction workers in 2026 in order to meet demand. Job losses have already begun: construction companies have shed 10,000 jobs since May.
Agriculture is another flashpoint — even the government acknowledges it. The Trump administration's own Labor Department stated that "the near total cessation of the inflow of illegal aliens combined with the lack of an available legal workforce results in significant disruptions to production costs and threatens the stability of domestic food production and prices for U.S consumers."
Manufacturing examples are also emerging: workers at factories in Michigan and Kentucky say recent immigration crackdowns are driving labor shortages, with over 125 employees at a GE Appliances plant in Louisville losing jobs due to canceled work permits, and a Kraft Heinz facility requiring extended overtime as remaining staff struggle to meet demand.
The "complementary jobs" effect
One important economic nuance: the shortage isn't confined to jobs immigrants directly fill. Fewer immigrants generally leads to less growth, which can disincentivize a workplace from hiring in general, because immigrants fulfill a complementary role in the workplace — their jobs necessitate support roles that may be more likely to be held by U.S.-born workers. As one economist put it, reducing immigration does not reallocate jobs to U.S.-born workers — it reduces the overall size of the economy that creates those jobs.
The counterargument
It's worth noting there's a competing view, mostly from immigration restriction advocates: some top administration officials, including Vice President JD Vance, have argued that limiting immigration will raise wages and create more job opportunities for U.S.-born workers. However, data has shown the "foreign workers take American jobs" narrative to be largely untrue, and foreign workers often allow Americans to take higher-paying jobs that require better qualifications.
Bottom line
While a modest slowdown in immigration might, in theory, tighten some entry-level labor markets and nudge up wages at the margin, evidence — both historical/demographic and from the current U.S. experience — suggests that a sharp reduction or near-stoppage of immigration tends to create genuine labor shortages, particularly in construction, agriculture, hospitality, healthcare, and manufacturing, and can slow overall economic growth rather than simply reshuffling jobs to native-born workers. The effect is likely to be uneven across sectors and regions, hitting hardest where reliance on immigrant labor is greatest.
Citations (17)
- Responding to US Labor Shortages
Source excerpt: “In construction, for example, foreign-born workers represent about 29% of the workforce. In other key sectors, including professional and business ser...”
statistic, article, points to yes. Claim: Foreign-born workers represent about 29% of the construction workforce and at least one in five in other key sectors.
- How Does Immigration Affect the U.S. Economy? | Council on Foreign Relations
Source excerpt: “Experts say the agricultural industry in particular—in which 68 percent [PDF] of farm laborers for fiscal year 2021–22 were foreign-born—could suffer ...”
statistic, article, points to yes. Claim: 68 percent of farm laborers in fiscal 2021–22 were foreign-born, so agriculture could suffer from crackdowns.
- Responding to US Labor Shortages
Source excerpt: “Importantly, between 2020 and 2024, immigration accounted for 83% of net population growth. In fact, 20 states would have lost population without immi...”
statistic, article, points to yes. Claim: Between 2020 and 2024, immigration accounted for 83% of net population growth; 20 states would have lost population without it.
- To lower inflation, America needs more immigration to alleviate national labor shortages - Fwd.us
Source excerpt: “Under a zero-immigration scenario where immigration stopped for the next two decades, the U.S. working-age population would shrink 11% by 2040. ”
statistic, article, points to yes. Claim: Under a two-decade zero-immigration scenario, the U.S. working-age population would shrink 11% by 2040.
- How Does Immigration Affect the U.S. Economy? | Council on Foreign Relations
Source excerpt: “Nationwide, the number of foreign-born workers declined by more than one million between January and August 2025, BLS data shows. ”
statistic, article, points to yes. Claim: Foreign-born workers declined by more than one million between January and August 2025, per BLS data.
- Trump immigration policy may be shrinking labor force, economists say
Source excerpt: “For example, job growth among industries that rely more heavily on undocumented immigrants has been "significantly weaker" than in the rest ...”
attribution, article, points to yes. Claim: Jed Kolko said job growth in industries reliant on undocumented immigrants has been significantly weaker than the rest of the private sector.
- Trump immigration policy may be shrinking labor force, economists say
Source excerpt: “Labor force growth has been "stagnant" in states like Texas and Florida with high immigrant arrests per capita, he wrote in an Aug. 4 research note, c...”
attribution, article, points to yes. Claim: Oxford Economics' Matthew Martin said labor force growth is stagnant in Texas and Florida, which have high immigrant arrests per capita.
- Booming US economy, Trump immigration policies create labor shortage in construction industry
Source excerpt: “Booming US economy, Trump immigration policies create labor shortage in construction industry The Associated General Contractors of America says some ...”
background, article, points to yes. Claim: Immigration policies and a booming economy are creating a labor shortage in construction.
- Booming US economy, Trump immigration policies create labor shortage in construction industry
Source excerpt: “In a recent survey, the Associated General Contractors of America found about 80 percent of construction firms are having a tough time filling positio...”
statistic, article, points to yes. Claim: About 80 percent of construction firms report difficulty filling positions, per the Associated General Contractors of America survey.
- Trump's immigration crackdown is worsening the construction labor shortage threatening build costs | Fortune
Source excerpt: “Last year, construction workers broke ground on about 1.36 million homes, a 0.6% drop from 2024, according to data from the Federal Reserve Bank of St...”
statistic, article, points to yes. Claim: Industry estimate that the U.S. must hire 349,000 more construction workers in 2026 to meet demand.
- Trump’s immigration crackdown deepens labor shortages as critical industries struggle to fill jobs | Milwaukee Independent
Source excerpt: “Construction companies, for instance, have shed 10,000 jobs since May. ”
statistic, article, points to yes. Claim: Construction companies have shed 10,000 jobs since May.
- Trump's immigration crackdown weighs heavy on the US labor market | Courthouse News Service
Source excerpt: ““The near total cessation of the inflow of illegal aliens combined with the lack of an available legal workforce,’’ the Labor Department said in an Oc...”
attribution, article, points to yes. Claim: The Labor Department said near total cessation of illegal immigrant inflow disrupts production costs and threatens food production stability.
- US workers say Trump’s immigration crackdown is causing labor shortages: ‘A strain on everybody’
Source excerpt: “US workers say Trump’s immigration crackdown is causing labor shortages: ‘A strain on everybody’ Workers at factories in Michigan and Kentucky say rec...”
evidence, article, points to yes. Claim: Factory workers in Michigan and Kentucky say crackdowns are driving labor shortages, including GE Appliances and Kraft Heinz examples.
- Trump's immigration crackdown is worsening the construction labor shortage threatening build costs | Fortune
Source excerpt: “Those chilling effects account for why foreign-born workers may no longer participate in the labor market, but does not fully account for why immigrat...”
evidence, article, points to yes. Claim: Construction labor shortage is worsening; 44 percent of firms recently forced to raise prices.
- America Is Shrinking Its Workforce At The Worst Possible Time
Source excerpt: “The central misunderstanding is this: reducing immigration does not reallocate jobs to U.S.-born workers — it reduces the overall size of the economy ...”
attribution, article, points to yes. Claim: Reducing immigration does not reallocate jobs to U.S.-born workers; it shrinks the economy that creates those jobs.
- How Does Immigration Affect the U.S. Economy? | Council on Foreign Relations
Source excerpt: “Some top administration officials, including Vice President JD Vance, have argued that limiting immigration will raise wages and create more job oppor...”
attribution, article, points to no. Claim: JD Vance and other officials argue that limiting immigration will raise wages and create more job opportunities for U.S.-born workers.
- Business owners and economists say ICE crackdowns are leading to a critical labor shortage — how Trump’s immigration policy could hit your bottom line
Source excerpt: “While some argue that foreign workers take American jobs, data has shown that to be untrue, and foreign workers allow Americans to take higher-paying ...”
evidence, article, points to yes. Claim: Data shows the claim that foreign workers take American jobs is untrue; they let Americans take higher-paying jobs.