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Grok 4.5Oct 15, 2026x-ai/grok-4.5-20260708

Will stopping immigration cause labor shortages?

Yes, stopping (or sharply reducing) immigration is likely to cause or worsen labor shortages in specific sectors and constrain overall labor force growth, particularly in countries like the US with aging populations and low fertility rates—though labor markets adjust over time via wages, prices, automation, capital investment, and shifts in output.[1]

Immigrants have driven a large share of recent labor force growth in the US and other developed economies. Native-born working-age populations have stagnated or begun shrinking due to low birth rates and baby-boomer retirements. Without immigration, the US working-age population (roughly ages 16–64) would likely have started declining around 2012, and prime-age labor force growth faces long-term downward pressure.[2][3] Foreign-born workers accounted for the bulk (e.g., ~85% in some recent periods) of US labor force growth and make up nearly 20% of the workforce.[4]

Sector-Specific and Recent Evidence

Certain industries depend heavily on immigrant labor (including unauthorized workers) for roles that natives often avoid due to physical demands, location, seasonality, pay, or conditions:

•Construction (immigrants ~30% of workforce in residential building; higher shares in trades like roofing, painting).
•Agriculture/farm work (often 40%+ for crops).
•Hospitality, food processing/preparation, personal services, and some skilled trades/healthcare support.[5][6]

Recent sharp slowdowns or near-halts in net migration (including under enforcement crackdowns around 2025, with estimates of near-zero or negative net migration in some years—the first in decades) have coincided with:

•Reports of acute shortages, project delays, and hiring difficulties in construction, trades, and related fields. Businesses note that higher wages alone often fail to attract enough qualified natives for temporary/manual roles.[7][5]
•Dramatically lower “potential” or break-even monthly job growth (the level consistent with stable unemployment). Estimates dropped from 100,000–170,000+ toward tens of thousands, near zero, or even negative in projections, weighing on GDP growth potential (e.g., to 1.4–1.6% range in some forecasts).[1][8]
•Limited or no corresponding rise in native-born employment or participation to fill the gap. In some data, US-born unemployment edged up and participation dipped even as foreign-born employment fell, pointing to structural mismatches rather than simple substitution. Immigrants often complement natives (filling roles that enable higher-skilled or managerial work) and generate demand via spending and entrepreneurship.[5][9][5]

Federal Reserve analyses (e.g., San Francisco, others) and private economists (Barclays, Morgan Stanley, AEI/Brookings) link reduced net international migration to slower labor force expansion, lower payroll growth, and risks of shortages if demand rebounds. Immigration inflows have historically helped ease vacancy rates and moderate wage pressures in tight markets.[10][11]

Adjustments and Counterarguments

Markets do not remain static:

•Wages and prices: Reduced supply can raise wages in affected occupations (benefiting some low-skilled natives) and push up prices for goods/services (e.g., food, housing construction, care). Effects on native wages overall are often modest. Classic studies (e.g., Borjas skill-cell approach) find negative wage impacts on competing natives of roughly 3–4% per 10% immigrant supply increase in a skill group, with small net “immigration surplus” for natives overall but redistribution from labor to capital/owners. Other research emphasizes complementarities and small average effects.[12]
•Automation and technology: Firms invest more in machines (as after the end of the Bracero program). The 1964 termination of the Bracero guest-worker program (removing ~half a million Mexican seasonal farm workers) did not substantially raise US farm wages or employment for natives in highly exposed states. Instead, mechanization accelerated (e.g., tomato harvesters), and production adjusted.[13][14]
•Output and growth: Some production may shrink, relocate, or become less competitive. Broader projections of sharp immigration cuts estimate multi-million reductions in the workforce over a decade, slower GDP growth (e.g., by a third in some scenarios), and productivity drags via less entrepreneurship and investment.[4]
•Native participation: Higher relative pay or better conditions might draw in sidelined workers (e.g., prime-age men without college degrees), but evidence so far shows incomplete substitution, and barriers like skills, health, location, or preferences persist. Training and cultural shifts take time.

Not all studies find large shortage effects from past immigration dips (e.g., some COVID-era analyses), and demand-side factors (business cycles, policy) matter. Long-term, stopping immigration does not create a fixed “lump of labor”; it slows expansion of both supply and demand. Developed economies face similar demographic pressures, making immigration one tool (alongside higher participation, automation, and fertility policies) against shortages.[15][16]

In summary, a full stop would almost certainly produce shortages relative to current demand patterns—especially short- to medium-term in immigrant-reliant manual and service sectors—and slow potential economic growth, based on demographics and recent/ empirical evidence. Adjustments mitigate but do not eliminate costs, and natives do not seamlessly fill every vacated role. Outcomes depend on the scale/speed of the stop, accompanying policies (training, visas for high-need areas, automation incentives), and economic conditions.

Citations (16)

  1. 1reuters.comNews and mediaquality 1.00
    https://www.reuters.com/markets/us/us-migrant-halt-may-wipe-potential-job-growth-2025-06-24/

    Backs: “Yes, stopping (or sharply reducing) immigration is likely to cause or worsen labor shortages in specific sectors and constrain overall labor force growth, particularly in countries like the US with aging populations and low fertility rates—though labor markets adjust over time via wages, prices, automation, capital…”

  2. 2business-standard.comNews and mediaquality 0.62
    https://www.business-standard.com/amp/immigration/immigration-fall-from-2-million-to-515-000-may-shrink-us-labour-force-fed-125112000258_1.html

    Backs: “Without immigration, the US working-age population (roughly ages 16–64) would likely have started declining around 2012, and prime-age labor force growth faces long-term downward pressure.”

  3. 3frbsf.orgGovernment
    https://www.frbsf.org/research-and-insights/publications/economic-letter/2025/11/immigration-and-changes-in-labor-force-demographics/

    Backs: “Without immigration, the US working-age population (roughly ages 16–64) would likely have started declining around 2012, and prime-age labor force growth faces long-term downward pressure.”

  4. 4fortune.comNews and mediaquality 0.88
    https://fortune.com/2025/10/21/trump-immigration-policy-jobs-workforce-american-workers-gdp-growth/

    Backs: “Without immigration, the US working-age population (roughly ages 16–64) would likely have started declining around 2012, and prime-age labor force growth faces long-term downward pressure.Foreign-born workers accounted for the bulk (e.g., ~85% in some recent periods) of US labor force growth and make up nearly 20% of…”

  5. 5bloomberglaw.comNews and media
    https://news.bloomberglaw.com/immigration/immigration-crackdown-fails-to-deliver-jobs-for-us-born-workers

    Backs: “Hospitality, food processing/preparation, personal services, and some skilled trades/healthcare support.”

  6. 6econofact.orgAcademic
    https://econofact.org/?p=10788

    Backs: “Hospitality, food processing/preparation, personal services, and some skilled trades/healthcare support.”

  7. 7usbordernews.comNews and media
    https://www.usbordernews.com/p/immigration-crackdown-depletes-skilled-us-workforce

    Backs: “Businesses note that higher wages alone often fail to attract enough qualified natives for temporary/manual roles.”

  8. 8livemint.comNot yet classified
    https://www.livemint.com/global/how-a-historic-immigration-drop-is-changing-the-job-market-11756089136179.html

    Backs: “Estimates dropped from 100,000–170,000+ toward tens of thousands, near zero, or even negative in projections, weighing on GDP growth potential (e.g., to 1.4–1.6% range in some forecasts).”

  9. 9forbes.comNews and mediaquality 0.83
    https://www.forbes.com/sites/stuartanderson/2026/02/22/new-research-finds-reducing-immigration-does-not-help-us-workers/

    Backs: “Immigrants often complement natives (filling roles that enable higher-skilled or managerial work) and generate demand via spending and entrepreneurship.”

  10. 10frbsf.orgGovernment
    https://www.frbsf.org/research-and-insights/publications/economic-letter/2023/02/role-of-immigration-in-us-labor-market-tightness/

    Backs: “Immigration inflows have historically helped ease vacancy rates and moderate wage pressures in tight markets.”

  11. 11kansascityfed.orgGovernment
    https://www.kansascityfed.org/research/economic-bulletin/rising-immigration-has-helped-cool-an-overheated-labor-market

    Backs: “Immigration inflows have historically helped ease vacancy rates and moderate wage pressures in tight markets.”

  12. 12econlib.orgEncyclopedias and reference
    https://www.econlib.org/library/Enc/Immigration.html

    Backs: “Other research emphasizes complementarities and small average effects.”

  13. 13nber.orgAcademic
    https://www.nber.org/papers/w23125.pdf

    Backs: “Instead, mechanization accelerated (e.g., tomato harvesters), and production adjusted.”

  14. 14politico.comNews and mediaquality 0.86
    https://www.politico.com/magazine/story/2017/02/mexico-immigrant-workers-jobs-americans-braceros-history-immigration-214784

    Backs: “Instead, mechanization accelerated (e.g., tomato harvesters), and production adjusted.”

  15. 15cgdev.orgNonprofits and think tanks
    https://www.cgdev.org/blog/border-situation-us-symptom-not-illness-labor-shortages-most-developed-countries-will-continue

    Backs: “Developed economies face similar demographic pressures, making immigration one tool (alongside higher participation, automation, and fertility policies) against shortages.”

  16. 16yahoo.comNews and mediaquality 0.69
    https://www.yahoo.com/news/articles/rich-western-countries-face-stark-160857156.html

    Backs: “Developed economies face similar demographic pressures, making immigration one tool (alongside higher participation, automation, and fertility policies) against shortages.”