Will stopping immigration cause labor shortages?

This is a nuanced economic question with genuine debate among economists, but there's substantial evidence and theory pointing to real risks of labor shortages in specific sectors, though the picture is more complicated than a simple yes/no.## Short answer: Yes, in specific sectors — and this is currently playing out in real time in the US.

The evidence, both historical and current, suggests that sharply reducing immigration does create real labor shortages in certain industries, even though the broader macroeconomic story is more nuanced.

What's happening right now (2025)

The current U.S. immigration crackdown offers a live case study. Economists say new immigration restrictions are straining key industries already facing worker shortages, with employers in agriculture, construction and service sectors reporting rising labor gaps as policy changes slow the flow of migrant workers, adding pressure to wages and inflation.

Specific sectors are being hit hard:

•Agriculture: Even the Trump administration's own Labor Department acknowledged the problem, warning that a "current and imminent labor shortage" on American farms "presents a sufficient risk of supply shock-induced food shortages." The department noted that approximately 42 percent of the U.S. crop workforce are unable to enter the country, potentially subject to removal or voluntarily leaving the labor force, and more than half of all agricultural labor, including in cattle and beef production, comes from immigrants.

•Construction: The construction industry, where more than a quarter of workers are foreign-born, has long struggled to find enough workers, and industry officials say Trump's immigration crackdown is making it worse. A survey found 92% of construction firms struggle to fill positions, and job growth is slowing in businesses that rely on immigrants, with construction companies shedding 10,000 jobs since May.

•Restaurants, construction, and landscaping combined: These industries have lost a combined 315,000 immigrant workers through August this year, more than any other industries.

•Healthcare: Even skilled positions are affected — one nonprofit senior care provider had to lay off four employees from Haiti after the Trump administration terminated their work permits, and with 60% of its 1,500 employees from foreign countries, struggled to find enough nurses, therapists and maintenance staff.

•Broader economy: One study projected that the U.S. immigration crackdown will cause net job losses in the millions and will lower the annual rate of economic growth by almost one-third over the next decade.

Historical precedent supports this

This isn't just a modern phenomenon. Research on the 1920s U.S. immigration quotas found that labor markets more affected by the quotas experienced sharp and persistent increases in the wages of low-skilled laborers, alongside declines in immigrant labor supply and employment, with wage gains of about 5–6 percent in affected markets — a classic shortage signature (prices/wages rising because supply can't meet demand).

But the picture is more complicated at the macro level

Here's the nuance: broad academic consensus finds that immigration's overall effect on native-born wages and employment is small, and restricting immigration doesn't necessarily translate into big native-worker gains. Despite declines in the foreign-born workforce, US-born workers did not gain higher income in more affected labor markets following immigration restriction after the 1920s quotas. Similarly, current data shows native-born workers are not seeing the promised benefits from the 2025 crackdown — employment indicators for native-born workers continue to stagnate or fall below forecasted trends, and the native-born labor force participation rate fell in the fall of 2025.

Why the disconnect? A few reasons:

1.Job-specific shortages ≠ overall labor market tightness. Many immigrant-heavy jobs (farm labor, meatpacking, certain construction trades) aren't easily filled by native workers due to location, working conditions, wages offered, or skill mismatches — even when unemployment exists elsewhere.

2.Businesses often substitute capital for labor rather than hiring natives at higher wages. Historical research on farm labor found farm wages stayed flat historically because farmers rapidly substituted toward machinery and less labor-intensive crops rather than raising wages to attract native workers.

3.Reduced immigration also reduces labor demand. Immigrants are consumers, business owners, and taxpayers too — fewer immigrants can mean less overall economic activity, offsetting the "more jobs available for natives" effect. This is why although basic supply and demand suggest immigration could reduce wages by increasing labor supply, the economy also responds to immigration by increasing demand for labor, meaning the actual impact of immigration is likely small, especially in the long run.

Bottom line

•Sector-specific shortages: Very likely, and already happening. Industries heavily dependent on immigrant labor (agriculture, construction, hospitality, eldercare, some healthcare roles) face real, measurable shortages when immigration is cut sharply, especially if cuts are sudden.

•Economy-wide wage gains for native workers: Historically weak or absent. Restricting immigration hasn't reliably delivered the broad wage/employment boost for native workers that proponents predict — the labor market often adjusts through automation, reduced output, or other channels rather than simply hiring more natives at higher pay.

•Speed matters. Sudden, large reductions (like mass deportation or abrupt visa revocations) are more disruptive than gradual policy changes, since businesses have less time to adapt via automation, training, or wage adjustments.

So the honest answer is: it depends on which labor market you're asking about. For the aggregate economy, the link is weaker than intuition suggests; for specific immigrant-dependent industries, shortages are a well-documented and currently observable reality.

Citations (16)

1courthousenews.comNews and mediaquality 0.87
Trump's immigration crackdown weighs heavy on the US labor market ...
Source excerpt: “Economists say new immigration restrictions are straining key industries already facing worker shortages. Employers in agriculture, construction and s...”
2reason.comNews and mediaquality 0.81
Trump's Labor Department admits that Trump's immigration crackdown ...
Source excerpt: “In documents filed to the *Federal Register* earlier this month, the Department of Labor warned of a "current and imminent labor shortage" on American...”
3reason.comNews and mediaquality 0.81
Trump's Labor Department admits that Trump's immigration crackdown ...
Source excerpt: “"Given that approximately 42 percent of the U.S. crop workforce are unable to enter the country, potentially subject to removal or voluntarily leavi...”
4abic.usNonprofits and think tanks
Know This Now, November 14, 2025: Mass Deportations Fueling Worker ...
Source excerpt: “More than half of all agricultural labor, including in cattle and beef production, comes from immigrants. ”
5npr.orgNews and mediaquality 0.93
Trump's immigration crackdown is hurting the construction industry ...
Source excerpt: “** # ICE is sending a chill through the construction industry #### ICE is sending a chill through the construction industry For years, the constructi...”
6npr.orgNews and mediaquality 0.93
Trump's immigration crackdown is hurting the construction industry ...
Source excerpt: “### It's the deadliest year for people in ICE custody in decades; next year could be worse A survey by the Associated General Contractors of America (...”
7milwaukeeindependent.comNot yet classified
Trump’s immigration crackdown deepens labor shortages as critical ...
Source excerpt: “Jed Kolko of the Peterson Institute for International Economics said that job growth is slowing in businesses that rely on immigrants. Construction co...”
8stateline.orgNews and media
More industries want Trump’s help hiring immigrant labor after ...
Source excerpt: “Restaurants, construction and landscaping businesses have lost a combined 315,000 immigrant workers through August this year, more than any other indu...”
9milwaukeeindependent.comNot yet classified
Trump’s immigration crackdown deepens labor shortages as critical ...
Source excerpt: “# Trump’s immigration crackdown deepens labor shortages as critical industries struggle to fill jobs Goodwin Living, an Alexandria, Virginia nonprofit...”
10fortune.comNews and mediaquality 0.88
Trump immigration policies would slash workforce estimate by 15.7 ...
Source excerpt: “# Trump immigration policies would slash workforce estimate by 15.7 million and slow GDP growth by a third over the next decade, study says The U.S. i...”
11kansascityfed.orgGovernment
Immigration Restrictions and the Wages of Low-Skilled Labor
Source excerpt: “Evidence on wage dynamics and We find that labor markets more affected by the quotas experienced sharp and persistent increases in the wages of low-s...”
12stanford.eduAcademic
The Effect of Immigration Restrictions on Local Labor Markets
Source excerpt: “Yet, despite declines in the foreign-born workforce, US-born workers did not. ”
13stanford.eduAcademic
The Effect of Immigration Restrictions on Local Labor Markets
Source excerpt: “Yet US-born workers in those markets did not benefit from the loss of immigrant workers as measured by their income score, a predicted income measure...”
14americanprogress.orgNonprofits and think tanks
RELEASE: Trump’s Immigration Crackdown Is Weakening America’s ...
Source excerpt: “- **Native-born workers are not seeing the promised benefits.** The latest data show that employment indicators for native-born workers continue to st...”
15kansascityfed.orgGovernment
Immigration Restrictions and the Wages of Low-Skilled Labor
Source excerpt: “farm wages because farmers rapidly substituted toward machinery and less labor-intensive crops.7. ”
16migrationpolicy.orgNonprofits and think tanks
Immigration and the Labour Market: Theory, Evidence and Policy ...
Source excerpt: “Although basic laws of supply and demand suggest that immigration could reduce wages by increasing the supply of workers, in reality the economy also ...”