Will stopping immigration cause labor shortages?

Stopping immigration would reshape the workforce — I'll gather the evidence on what that means for labor shortages.

Yes, according to nearly all recent economic and demographic research - stopping immigration would cause and worsen labor shortages in the U.S., both in the near-term and long-term.

1. Demographics: Without immigration the workforce shrinks

•The Congressional Budget Office forecasts that "Without immigration, the U.S. population would begin to shrink in 2033."and that will slow economic output in a shrinking labor force.

•Research from the Federal Reserve Bank of San Francisco found that, using birth and mortality data, "without immigration, the working-age population would have started to fall as early as 2012". Other summaries of that research note the Federal Reserve Bank of San Francisco found that without immigration, the U.S. working-age population would have started shrinking in 2012, not 2025

•A Fwd.us-George Mason University projection 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. And under a low-immigration scenario, the U.S. working-age population would remain relatively flat."

•The implication is: "without the immigration surge of 2022 to 2024, the US working-age population would have been shrinking"

•As an Indeed Hiring Lab study summarized: "immigration will soon become the primary mechanism keeping the population and the labor force growing. Without it, the U.S. will not just be facing a tighter labor market, but a shrinking one."

Similar wording: "Without it, the U.S. will not just be facing a tighter labor market, but a shrinking one."

2. Direct link to current labor shortages

•Analysts state "Tightened immigration controls are directly linked to growing labor shortages in key sectors of the U.S. economy."

•Recent estimates indicate restrictions "have reduced the labor force by an estimated 6.8 million workers by 2028, with 4 million attributed to crackdowns on undocumented immigration and 2.8 million linked to changes in legal immigration rules" and "This labor force contraction has created acute shortages in sectors reliant on immigrant labor, such as retail, logistics, and healthcare"

•The U.S. Department of Labor itself admitted in an Oct. 2 Federal Register filing: "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.''"

•Sectoral impact is broad: "Labor shortages grow in agriculture, construction, healthcare, food service, and transportation sectors."

3. Measured economic effects

•A Brookings Institution analysis of ICE arrests and deportations estimated "Of the 668,000 jobs lost, an estimated 51,000-297,000 would have been held by American-born workers," with "Losses [were] concentrated in immigrant-intensive sectors but spread well beyond them. The deepest direct hits fell on construction and on accommodation and food services"

•American Action Forum research found that "removing undocumented immigrants would reduce GDP by $380 billion to $620 billion and create shortages of at least 4 million workers."

•Economists note: "Economists, including those at the Federal Reserve, have identified persistent worker shortages, and more specifically immigrant worker shortages, as a major contributor to rising inflation." When labor is short, employers offer higher wages which are passed on to consumers.

In short, because U.S. birth rates have been below replacement since 1971, immigrants – who are more likely to be of prime working age – are the main source of growth for the working-age population. Stopping that inflow does not just create a tighter labor market, it causes the labor supply itself to contract, leaving historic job openings unfilled and raising costs for employers and consumers.

Citations (3)

1inc.comNews and mediaquality 0.88
Trump’s Immigration Crackdown Has Cost the U.S. Economy 668,000 Jobs, Studies Show
Backs: “As an Indeed Hiring Lab study summarized: "immigration will soon become the primary mechanism keeping the population and the labor force growing. Without it, the U.S. will not just be facing a tighter labor market, but a shrinking one."”
2americanactionforum.orgNonprofits and think tanks
How Immigration Helps U.S. Workers and the Economy
Backs: “A Brookings Institution analysis of ICE arrests and deportations estimated "Of the 668,000 jobs lost, an estimated 51,000-297,000 would have been held by American-born workers," with "Losses [were] concentrated in immigrant-intensive sectors but spread well beyond them. The deepest direct hits fell on construction and…”
3fwd.usNonprofits and think tanks
To lower inflation, America needs more immigration to alleviate national labor shortages
Backs: “American Action Forum research found that "removing undocumented immigrants would reduce GDP by $380 billion to $620 billion and create shortages of at least 4 million workers.". Economists note: "Economists, including those at the Federal Reserve, have identified persistent worker shortages, and more specifically…”