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Grok 4.5Sep 29, 2026x-ai/grok-4.5-20260708

Will stopping immigration cause labor shortages?

Yes, stopping immigration entirely (or sharply curtailing it) would cause or significantly worsen labor shortages in many sectors and constrain overall economic growth, particularly in countries like the United States with aging populations and below-replacement fertility. This is supported by demographic projections, economic studies, and evidence from actual immigration restrictions. Immigrants are not perfect substitutes for native workers; they often complement them, fill roles natives are less willing or able to take, expand the economic pie (creating demand and jobs), and drive nearly all recent labor force growth.[1]

Demographic Reality

In the US (and many other developed economies), the native-born working-age population (roughly ages 20–64) is stagnating or set to shrink due to low fertility rates (below the ~2.1 replacement level for decades) and retiring Baby Boomers. Immigration has been the primary or sole driver of labor force and population growth in recent years.[1]

•The Congressional Budget Office (CBO) projects that immigration will account for essentially 100% of US population growth in the coming years (and more than 100% later as natural decrease sets in). Without it, the US population begins shrinking around the early 2030s.[2]
•The US-born prime-age/working-age population is forecast to shrink every year over the next decade. Immigrants (who are disproportionately working-age) have accounted for the vast majority—or all—of recent labor force growth (e.g., ~85% from 2019–2024 in one analysis; virtually all in some periods).[3]
•Economic Policy Institute analysis: Achieving historically normal GDP growth rates will be impossible without sustained immigration flows, as the US-born labor force shrinks. Halving net immigration could cut annual GDP growth by ~0.2 percentage points; zeroing it out by ~0.4 points (other things equal).[1]
•Similar pressures exist in Europe, Japan, South Korea, and elsewhere, where low fertility and aging create structural labor needs that immigration helps address.[4]

Without immigration, labor force growth slows dramatically (potentially to near zero or negative), lowering the “breakeven” rate of monthly job gains needed to keep unemployment stable. Recent slowdowns in US immigration/enforcement have already pushed estimates of sustainable monthly payroll growth toward very low or negative territory.[5]

Sectoral Reliance and Shortages

Immigrants (legal and unauthorized) make up ~18–20% of the US workforce overall but much higher shares in specific industries and occupations, often those that are physically demanding, seasonal, lower-wage, or location-specific where native participation is lower:

•Construction: ~30% foreign-born (higher in some regions like Texas/Florida); significant undocumented share.[6]
•Agriculture: Very high (often 50%+ foreign-born or unauthorized for crop workers); Labor Department filings have warned that near-total cessation of unauthorized inflows risks supply shocks and food shortages, as unemployed Americans will not fill these roles in sufficient numbers even at current wages.[7]
•Hospitality/accommodation/food services, manufacturing, transportation/warehousing, building/grounds maintenance, and certain healthcare/caregiving roles also have elevated shares.[8]

High-skilled immigration (e.g., H-1B, STEM) fills gaps in tech, engineering, healthcare, and innovation-driven fields. Foreign workers have driven large shares of growth in AI-related occupations.[9]

Evidence from Restrictions

Sudden stops or reductions do not simply free up jobs for natives in a 1:1 way:

•South Korea guest worker program (EPS) halt during COVID: Workforce shrank ~22%. Firms more dependent on these workers had higher closure rates, revenue losses, and production setbacks. They did not significantly expand domestic (native) hiring; instead, they demanded more guest workers. Native wages did not rise as a simple replacement story would predict.[10]
•US H-2B (low-skill temporary) visa lottery studies: Firms randomly able to hire more expand production, investment, and profits. Restricting them shrinks firms. Effects on US worker employment are zero or positive (especially rural); low-skill immigrant and native workers are poor substitutes (low elasticity of substitution).[11]
•Historical (e.g., end of Bracero program) and recent US enforcement/deportations: Often lead to reduced output rather than full native replacement. Studies of ICE activity/Secure Communities find declines in foreign-born employment accompanied by declines (or no gains) in US-born employment in affected areas/industries, due to complementarities (e.g., immigrant laborers enabling more work for native supervisors, trades, or related roles). Construction and other sectors see project delays, higher costs, and job losses cascading to natives. One analysis: each arrest can eliminate multiple jobs overall. No strong evidence of wage/employment booms for natives.[12]
•Recent US policy shifts reducing inflows/increasing removals have coincided with slower job growth, sectoral complaints of shortages (restaurants, farms, construction, care), and business reports of “nobody to work.”[13]

Immigrants also boost demand (as consumers and entrepreneurs— they start businesses at higher rates) and can raise native wages/productivity via complementarities and skill mix. Meta-analyses and studies (e.g., National Academies, Peri et al.) generally find small/neutral-to-positive overall wage and employment effects for natives, with any negatives concentrated on prior immigrants or specific low-education subgroups.[14]

Nuances and Counterarguments

•Wage adjustments and native response: Shortages can raise wages, potentially drawing in more natives, increasing hours/participation, or spurring automation/offshoring. There are millions of working-age natives not in the labor force (for reasons including disability, caregiving, education, opioids, preferences). Critics (e.g., some restrictionist analyses) argue “shortages” often mean employers unwilling to pay market-clearing wages or improve conditions, and that low-skill immigration can depress wages for competing natives.[15]
•However, evidence shows incomplete adjustment: Many jobs remain unattractive to natives even at higher pay (e.g., farm work trials); geographic/occupational mobility is limited; firms often shrink or raise prices instead; complementarities mean native jobs can disappear too. Automation helps some roles but not all (and takes time/investment). Higher prices for food, housing, care, and services hit consumers.
•Not all immigration is equal: High-skilled often has clearer net positives (innovation, fiscal). Low-skilled fills critical gaps but has more debated fiscal/wage effects. Legal pathways vs. unauthorized matter for control and integration. Complete stop is extreme; managed flows targeting needs differ from open borders or mass illegal entries.
•Other factors: Productivity growth, education/training, family policies (to raise fertility/participation), and technology can mitigate but do not fully offset rapid demographic shifts in the near-to-medium term. Labor markets are dynamic—no fixed “lump of labor.”

In short, stopping immigration would reduce labor supply against ongoing demand (from demographics, infrastructure, care needs for an aging society, etc.), producing shortages especially in immigrant-heavy sectors, slower growth, higher costs, and incomplete native replacement. This is the mainstream view from demographic agencies (CBO), Fed analyses, Brookings, EPI, and much of the economics literature. Policy trade-offs exist (fiscal costs, social cohesion, wage effects for some groups, border security), but the labor supply channel is clear and empirically supported. Gradual, skills- and needs-based immigration is widely seen as a tool to ease shortages without the disruptions of abrupt stops.

Citations (15)

  1. 1epi.orgNonprofits and think tanks
    https://www.epi.org/publication/the-u-s-born-labor-force-will-shrink-over-the-next-decade-achieving-historically-normal-gdp-growth-rates-will-be-impossible-unless-immigration-flows-are-sustained/

    Backs: “Immigrants are not perfect substitutes for native workers; they often complement them, fill roles natives are less willing or able to take, expand the economic pie (creating demand and jobs), and drive nearly all recent labor force growth.”

  2. 2cbo.govGovernment
    https://www.cbo.gov/publication/61270

    Backs: “Without it, the US population begins shrinking around the early 2030s.”

  3. 3fortune.comNews and mediaquality 0.88
    https://fortune.com/2025/10/21/trump-immigration-policy-jobs-workforce-american-workers-gdp-growth/

    Backs: “Immigrants (who are disproportionately working-age) have accounted for the vast majority—or all—of recent labor force growth (e.g., ~85% from 2019–2024 in one analysis; virtually all in some periods).”

  4. 4mixedmigration.orgNonprofits and think tanks
    https://mmr2025.mixedmigration.org/mmr/2025/labour-shortages-and-anti-immigration-stances/

    Backs: “Similar pressures exist in Europe, Japan, South Korea, and elsewhere, where low fertility and aging create structural labor needs that immigration helps address.”

  5. 5brookings.eduNonprofits and think tanks
    https://www.brookings.edu/articles/macroeconomic-implications-of-immigration-flows-in-2025-and-2026-january-2026-update/

    Backs: “Recent slowdowns in US immigration/enforcement have already pushed estimates of sustainable monthly payroll growth toward very low or negative territory.”

  6. 6usafacts.orgData and toolsquality 0.91
    https://usafacts.org/articles/which-industries-employ-the-most-immigrant-workers/

    Backs: “Construction: ~30% foreign-born (higher in some regions like Texas/Florida); significant undocumented share.”

  7. 7forbes.comNews and mediaquality 0.83
    https://www.forbes.com/sites/andrewtisch/2026/05/28/the-real-immigration-tragedy/

    Backs: “Labor Department filings have warned that near-total cessation of unauthorized inflows risks supply shocks and food shortages, as unemployed Americans will not fill these roles in sufficient numbers even at current wages.”

  8. 8recruitonomics.comBlogs and newsletters
    https://www.recruitonomics.com/p/sector-by-sector-mapping-the-labor

    Backs: “Hospitality/accommodation/food services, manufacturing, transportation/warehousing, building/grounds maintenance, and certain healthcare/caregiving roles also have elevated shares.”

  9. 9thirdway.orgNonprofits and think tanks
    https://www.thirdway.org/memo/front-door-welded-shut-how-trump-is-dismantling-legal-immigration

    Backs: “Foreign workers have driven large shares of growth in AI-related occupations.”

  10. 10nber.orgAcademic
    https://www.nber.org/digest/202606/what-happens-when-flow-immigrant-workers-suddenly-stops

    Backs: “Native wages did not rise as a simple replacement story would predict.”

  11. 11aeaweb.orgAcademic
    https://pubs.aeaweb.org/doi/pdfplus/10.1257/app.20250049

    Backs: “Effects on US worker employment are zero or positive (especially rural); low-skill immigrant and native workers are poor substitutes (low elasticity of substitution).”

  12. 12brookings.eduNonprofits and think tanks
    https://www.brookings.edu/articles/the-labor-market-impact-of-deportations/

    Backs: “One analysis: each arrest can eliminate multiple jobs overall. No strong evidence of wage/employment booms for natives.”

  13. 13elpais.comNews and mediaquality 0.79
    https://english.elpais.com/economy-and-business/2026-09-21/trumps-immigration-policy-is-choking-business-theres-nobody-to-work.html

    Backs: “Recent US policy shifts reducing inflows/increasing removals have coincided with slower job growth, sectoral complaints of shortages (restaurants, farms, construction, care), and business reports of “nobody to work.””

  14. 14ssrn.comAcademic
    https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4810604

    Backs: “Meta-analyses and studies (e.g., National Academies, Peri et al.) generally find small/neutral-to-positive overall wage and employment effects for natives, with any negatives concentrated on prior immigrants or specific low-education subgroups.”

  15. 15cis.orgNonprofits and think tanks
    https://cis.org/Report/There-No-Labor-Shortage

    Backs: “Critics (e.g., some restrictionist analyses) argue “shortages” often mean employers unwilling to pay market-clearing wages or improve conditions, and that low-skill immigration can depress wages for competing natives.”