Will stopping immigration cause labor shortages?

Short answer: In many sectors, yes — and there's substantial real-world evidence this is already happening.

The economic consensus, backed by recent data, is that abruptly stopping or sharply reducing immigration tends to create labor shortages, particularly in industries that have historically relied heavily on immigrant labor.

What the evidence shows

Agriculture is the clearest case. About 70% of agriculture workers in the U.S. are immigrants, and even some workers with legal status are worried about getting caught up in raids and staying home. The impact has been severe enough that the Trump administration itself issued a warning that its immigration crackdown risks food shortages, buried in an October 2 filing to justify lowering wages under the H-2A visa program. The Labor Department stated that "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." Notably, even the government's own analysis found "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."

Construction is also heavily exposed. The Associated General Contractors of America estimates 35% of construction workers are immigrants. A 2026 NBER working paper found that employment among likely undocumented immigrants dropped 4% on average in areas where ICE conducted raids, with construction the most affected industry, seeing employment drop 7.5% for undocumented workers. The industry's chief economist noted "If the supply of immigrants is cut off, as it seems to be with the borders effectively closed these days, I think it will get much harder for the construction industry to fill positions." Separately, construction companies shed 10,000 jobs since May 2025 as the crackdown intensified.

Manufacturing and food processing are feeling it too — workers at plants in Michigan and Kentucky report crackdowns are driving shortages and straining production, with over 125 employees at a GE Appliances plant losing jobs due to canceled work permits, causing slowdowns, while a Kraft Heinz facility required extended overtime as remaining staff struggled to meet demand.

The macroeconomic picture

Beyond individual industries, economists project broader effects on growth and hiring. A July 2025 report from Brookings and AEI researchers found that the loss of foreign workers will mean that monthly U.S. job growth "could be near zero or negative in the next few years." Data already shows this playing out: the size of the foreign-born labor force declined by about 1.2 million people since January 2025, to 32.1 million total people in July, according to BLS data.

This isn't a new phenomenon — similar effects were documented during earlier immigration slowdowns. Atlanta Fed research found that a protracted slowdown in low-skilled immigration relates to subsequent wage increases for low-skilled workers, declining educational advancement by young US workers, and labor shortages in low-skilled jobs that can't be moved to other countries. Kansas City Fed researchers similarly noted that industries less able to implement labor-saving technologies to substitute for missing immigrant workers, such as direct-care, will likely experience increasing shortages and costs.

Important caveats

Bottom line: While the effects aren't economy-wide or immediate everywhere, stopping or sharply curtailing immigration has a well-documented tendency to cause labor shortages in immigrant-dependent sectors, and current U.S. data from 2025-2026 shows this happening in real time in agriculture, construction, and manufacturing — with knock-on effects on prices and GDP growth.