Will stopping immigration cause labor shortages?

Short answer: Often yes, especially in certain sectors — though effects vary by industry and context.

There's substantial evidence, particularly from recent U.S. experience, that restricting immigration creates real labor shortages in specific sectors, even as it may have some wage effects for native workers. Here's the breakdown:

Sectors most vulnerable to shortages

Agriculture is the clearest case. The US agricultural sector is reliant on unauthorized immigrants—fruit, vegetable, and horticultural farms, dairies, and downstream processors depend on unauthorized immigrants to perform tasks US citizens generally won't do, meaning those industries could face severe production impacts if enforcement succeeds. A real-world example: Florida strawberry farmers say immigration crackdowns are crippling their industry, as many workers have fled and costly H-2A visas can't fill the gap, with one farmer planning to cut production by 65%. Nationally, farm groups warn agriculture has lost 155,000 workers in four months, the biggest drop in a decade.

Construction faces similar pressure. Construction has experienced tightened labor markets, where immigrants represent approximately 30 to 36 percent of the workforce, with homebuilders and contractors reporting longer vacancy durations and project delays that exacerbate housing supply constraints.

Healthcare is also exposed: healthcare facilities depend on immigrant labor for roles from nurses and physicians to support staff, with immigrants comprising about one in six hospital workers, and reduced inflows have intensified staffing challenges in an already strained sector facing rising demand from an aging population.

Hospitality/restaurants: Without a steady supply of immigrant workers, hotels and restaurants have struggled to maintain service levels, resulting in reduced capacity and higher operating costs, with staffing shortages playing a significant role in rising prices.

Tech: Restrictions on H-1B visas and related skilled immigration programs have complicated talent acquisition for firms reliant on specialized engineers and researchers, slowing innovation pipelines and expansion plans.

Current U.S. data (2025)

Nationally, since the start of 2025, job growth in industries heavily reliant on undocumented labor—hotel, restaurant, construction, and health-care—has been weaker than the rest of the private sector, with agriculture particularly at risk since 68 percent of farm laborers in 2021–22 were foreign-born. By late 2025, the Labor Department warned that immigration policies risk creating a labor shortage in agriculture, and the number of foreign-born workers nationwide declined by more than one million between January and August 2025.

Why "Americans will just take the jobs" often doesn't fully happen

Farmers and economists consistently note that native-born Americans just do not want to do farm work at the wages/conditions offered, even as those wages rise. Despite increasing wages, few Americans apply for these jobs, with industry groups urging visa reforms and legalization instead. Historically, COVID-era immigration disruption led to a shortfall of 1.65 million in the working-age immigrant population, a gap that was not filled by increasing employment of native-born workers.

The counterargument (and why it's not absolute)

Immigration restrictionists argue the opposite effect is intended and real: some administration officials argue that limiting immigration will raise wages and create more job opportunities for U.S.-born workers, and that these workers are available to counter labor shortages. Academic research is mixed — economist Giovanni Peri has found that immigration has only a minimal effect on the wages of U.S.-born workers, which cuts both ways: it suggests restricting immigration may not meaningfully raise native wages, but it also means immigrants aren't simply "taking" jobs natives would otherwise fill.

Broader economic costs

Beyond sector-specific shortages, economists warn of macro effects: a shrinking labor force could have long-term economic effects, as enforcement policies could decrease domestic goods and services production—cutting annual GDP growth by almost one-third by 2035, according to an October 2025 NFAP study. There's also historical precedent: economic historian research on the 1882 Chinese Exclusion Act found that tight restrictions would almost certainly create labor force disruptions that would threaten some companies' survival, and sudden new immigration restrictions could considerably damage a country's ability to adjust to an aging labor force, since immigrants help maintain the workforce by replacing aging workers.

Bottom line

It depends heavily on the sector, the pace of restriction, and whether native workers are willing/able to fill the gap at prevailing wages. In labor-intensive, physically demanding, or highly specialized fields (farm work, construction trades, elder care, specialized tech roles), shortages tend to materialize quickly because native-born workers either aren't available in sufficient numbers or aren't willing to take the jobs at the wages employers currently offer. In other sectors with more wage flexibility or automation potential, the effects may be smaller or slower to emerge, sometimes showing up as higher wages/prices and increased automation rather than outright shortages.