Will stopping immigration cause labor shortages?
Short answer: Yes, in many cases—and this is already happening
There's strong real-world evidence right now that restricting immigration causes labor shortages, particularly in specific sectors. Here's what the data shows:
Current evidence (2025–2026, U.S.)
Since the Trump administration's immigration crackdown began, economists have documented clear effects on the labor force. Early evidence suggests that White House policy is reducing the size of the immigrant labor force, in turn contributing to a recent drawdown in the overall U.S. labor pool, according to several economists. Fed Chair Jerome Powell himself cited this as a factor: Last month, Jerome Powell, chair of the Federal Reserve, cited immigration policy as a factor behind the slowdown in the labor supply.
The numbers are stark: the number of foreign-born workers declined by more than one million between January and August 2025, BLS data shows.
Which sectors are hit hardest
The effect isn't uniform—it concentrates in industries that rely heavily on immigrant labor:
Why this happens — the economic logic
This isn't just a current-events anomaly; it's consistent with longer-run research:
The counterargument
Not everyone agrees labor shortages are the inevitable or main outcome. 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. There's also research suggesting immigration can suppress wages for some native-born groups — a Center for Immigration Studies analysis found labor force participation among U.S.-born men aged 25-54 without a high school diploma declined, with one researcher arguing immigration suppressed wages and made it harder for native-born men without college degrees to find jobs. The theory here is that fewer immigrant workers means employers must raise wages and improve conditions to attract native-born workers, which could eventually pull some discouraged workers back into the labor force — though critics argue this is slow, doesn't apply to jobs natives won't take, and causes short-term disruption (unharvested crops, delayed construction, higher consumer prices) before any wage benefits materialize.
Bottom line
The weight of current evidence—from the Federal Reserve, Labor Department, and multiple research institutions—points toward restricting immigration causing real, measurable labor shortages in immigrant-dependent sectors (construction, agriculture, hospitality, food processing) in the short-to-medium term, with knock-on effects on prices and GDP growth. Whether this is a net negative depends heavily on one's view of trade-offs between wage growth for native workers versus overall economic output and consumer prices—but shortage is not really in dispute as an empirical outcome; it's visible in vacancy data and sector reports right now.
Citations (17)
- Trump immigration policy may be shrinking labor force, economists say
Source excerpt: “Early evidence suggests that White House policy is reducing the size of the immigrant labor force, in turn contributing to a recent drawdown in the ov...”
- Trump immigration policy may be shrinking labor force, economists say
Source excerpt: “Last month, Jerome Powell, chair of the Federal Reserve, cited immigration policy as a factor behind the slowdown in the labor supply. ”
- How Does Immigration Affect the U.S. Economy?
Source excerpt: “Nationwide, the number of foreign-born workers declined by more than one million between January and August 2025, BLS data shows. ”
- Trump's immigration crackdown is worsening the construction labor shortage threatening build costs
Source excerpt: “New data has confirmed economists’ concern that the Trump administration’s immigration crackdown has led to fewer jobs in critical industries, particu...”
- Aging workforce, immigration crackdown are depleting skilled labor
Source excerpt: “Worker shortages are the top reason for construction project delays, a September survey by the Association of General Contractors of America found. ”
- Aging workforce, immigration crackdown are depleting skilled labor
Source excerpt: “The association cited both the demand for workers building data centers and tougher immigration enforcement as contributing causes for the shortage. ”
- How Does Immigration Affect the U.S. Economy?
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 ...”
- How Does Immigration Affect the U.S. Economy?
Source excerpt: “The Labor Department warned in October 2025 that the Trump administration’s immigration policies risk creating a labor shortage in the sector. ”
- How Does Immigration Affect the U.S. Economy?
Source excerpt: “Since the start of 2025, job growth in industries heavily reliant on undocumented labor has been weaker than the rest of the private sector. These sec...”
- 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...”
- Immigration is 'taking pressure off' the job market and U.S. economy, expert says
Source excerpt: “## Why immigration is a 'net benefit for the economy' The problem is that native-born U.S. households are having fewer children and the baby boom gene...”
- Immigration Shortfall May Be a Headwind for Labor Supply - Federal Reserve Bank of Kansas City
Source excerpt: “Finally, the fourth pair of bars shows that the ratio of unemployed persons to vacant jobs decreased by more than 50 percent between the two periods, ...”
- Immigration Shortfall May Be a Headwind for Labor Supply - Federal Reserve Bank of Kansas City
Source excerpt: “Reduced immigration is likely to affect even those industries that do not depend on foreign-born workers. Immigrants are more likely to fill jobs that...”
- How Does Immigration Affect the U.S. Economy?
Source excerpt: “The Peterson Institute for International Economics, meanwhile, estimated [PDF] in 2024 that deporting between 1.3 and 8.3 million undocumented immigra...”
- How Does Immigration Affect the U.S. Economy?
Source excerpt: “This could cut annual economic growth by almost one-third by 2035, according to an October 2025 study [PDF] by the nonpartisan National Foundation for...”
- How Does Immigration Affect the U.S. Economy?
Source excerpt: “Some top administration officials, including Vice President JD Vance, have argued that limiting immigration will raise wages and create more job oppor...”
- Immigration is 'taking pressure off' the job market and U.S. economy, expert says
Source excerpt: “## When immigration may not be 'such a good deal' A Center for Immigration Studies analysis of Census Bureau data found that labor force participation...”