Will stopping immigration cause labor shortages?
Short answer: Yes, in many key sectors — the evidence from 2025–2026 strongly suggests so.
Most mainstream economists agree that sharply reducing immigration tends to create or worsen labor shortages, particularly in industries that have historically relied heavily on immigrant labor. This isn't just theory — it's been playing out in real time in the U.S. since major enforcement actions began in 2025.
What's happening in specific sectors right now
Construction: New data has confirmed economists' concerns that the immigration crackdown has led to fewer jobs in construction, worsening fears of labor shortages, delays, and higher costs passed down to consumers. One industry group estimated the U.S. must hire 349,000 more construction workers in 2026 just to meet demand. A 2026 NBER study found that localized ICE raids caused a 7.5% drop in construction employment among likely undocumented workers, along with native-born job losses ranging from 51,000 to 297,000 in 2025 alone.
Agriculture: Foreign-born workers account for roughly two-thirds of the hired crop labor force, with undocumented workers comprising a substantial share. U.S. agriculture has faced severe labor shortages in 2026 due to expanded ICE operations and mass deportations, with some analyses projecting domestic production could drop 15-20% by mid-2026, potentially increasing grocery prices by up to 15%.
Healthcare, hospitality, and food service: These sectors face threats to employers and workers across critical areas already experiencing chronic labor shortages, including agriculture, construction, tourism, and elder care. Since the start of 2025, job growth in industries heavily reliant on undocumented labor — including hotel, restaurant, construction, and health-care industries — has been weaker than the rest of the private sector.
Economy-wide: Nationwide, the number of foreign-born workers declined by more than one million between January and August 2025, according to BLS data. The Labor Department itself warned in October 2025 that these immigration policies risk creating labor shortages.
Why this happens — the economic logic
The counterargument and nuance
Some economists and policymakers argue restrictionist policies could benefit native-born workers through higher wages — the contention being that limiting immigration will raise wages and create more job opportunities for U.S.-born workers, with these workers available to counter labor shortages. Economist George Borjas has similarly raised concerns about immigration's negative impact on the low-skilled labor pool.
However, most research suggests these wage gains are modest and don't fully offset the output lost. A National Bureau of Economic Research paper found that large-scale removal of immigrant workers produced small positive short-run effects on native-born wages, but those effects reverse in every state in the long run, resulting in wage declines more than twice as large as any short-term gains.
Bottom line
While there's genuine debate about long-run wage effects on native workers, the near-unanimous consensus — backed by real-time 2025-2026 data — is that abruptly cutting immigration does cause labor shortages, especially in agriculture, construction, healthcare, and hospitality, with knock-on effects on prices, project delays, and even native-worker job losses in related industries. The effects aren't uniform across the economy, but in sectors dependent on immigrant labor, the shortage effect has been immediate and measurable rather than theoretical.
Citations (15)
- 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...”
evidence, article, points to yes. Claim: Immigration crackdown has led to fewer construction jobs, worsening labor shortage fears, delays and higher costs; industry needs 349,000 more workers in 2026.
- Visa Policies and Labor Shortages in Construction - ABLEMKR
Source excerpt: “A 2026 NBER working paper by Cox and East backed up that pattern. It found a **7.5% drop** in construction employment among likely undocumented worker...”
statistic, article, points to yes. Claim: A 2026 NBER study found ICE raids caused a 7.5% drop in construction employment among likely undocumented workers.
- Immigration Restrictions and Labor Market Impacts
Source excerpt: “In agriculture, foreign-born workers account for roughly two-thirds of the hired crop labor force, with undocumented workers comprising a substantial ...”
statistic, article, points to yes. Claim: Foreign-born workers are roughly two-thirds of the hired crop labor force, with undocumented workers a substantial share.
- US Farm Labor Shortages 2026: H-2A Visas & ICE Impact
Source excerpt: “Nadia Hassan Written by Nadia Hassan Last Updated Apr 1, 2026 6 min read Recently Updated April 1, 2026 What’s Changed Updated the article with 2...”
evidence, article, points to yes. Claim: U.S. agriculture has faced severe labor shortages in 2026 due to expanded ICE operations and mass deportations.
- US Farm Labor Shortages 2026: H-2A Visas & ICE Impact
Source excerpt: “- Domestic production could drop 15-20% by mid-2026, potentially increasing grocery prices by up to 15%. ”
statistic, article, points to yes. Claim: Domestic production could drop 15-20% by mid-2026, raising grocery prices up to 15%.
- Recent Federal Changes to Employment Authorization - American Immigration Council
Source excerpt: “They threaten employers and workers across critical sectors already experiencing chronic labor shortages, including agriculture, construction, tourism...”
evidence, article, points to yes. Claim: Policies threaten employers and workers in sectors already experiencing chronic shortages, including agriculture, construction, tourism and elder care.
- 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...”
evidence, article, points to yes. Claim: Job growth in industries reliant on undocumented labor has been weaker than the rest of the private sector since 2025.
- 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. ”
statistic, article, points to yes. Claim: Foreign-born workers declined by more than one million between January and August 2025, per BLS.
- 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. ”
attribution, article, points to yes. Claim: The Labor Department warned in October 2025 that immigration policies risk creating labor shortages.
- Labor Shortages and the Immigration Shortfall
Source excerpt: “Additionally, research focused on the high-skilled STEM jobs shows that they are responsible for creating a job-multiplier effect at the local level, ...”
evidence, article, points to yes. Claim: High-skilled immigrant workers create a job-multiplier effect of up to 2.5 additional jobs locally.
- Visa Policies and Labor Shortages in Construction - ABLEMKR
Source excerpt: “### Effects on Schedules, Costs, and Housing Supply Workers across a region may stay home, even if enforcement happened somewhere else, and the labor ...”
evidence, article, points to yes. Claim: Enforcement scares workers across a region into staying home, even where enforcement did not occur.
- Immigration is 'taking pressure off' the job market and U.S. economy, expert says
Source excerpt: “- Without foreign-born labor, the U.S. labor pool would shrink because of lower birth rates and an aging workforce, making it harder to finance progra...”
evidence, article, points to yes. Claim: Without foreign-born labor, the labor pool would shrink due to lower birth rates and an aging workforce.
- How Does Immigration Affect the U.S. Economy?
Source excerpt: “that limiting immigration will raise wages and create more job opportunities for U.S.-born workers. The administration has contended that these worker...”
attribution, article, points to no. Claim: Proponents argue limiting immigration will raise wages and create jobs for U.S.-born workers who can counter shortages.
- How Does Immigration Affect the U.S. Economy?
Source excerpt: “Some researchers, such as Harvard University’s George Borjas, have raised concerns about its negative impact on the low-skilled labor pool. ”
attribution, article, points to no. Claim: George Borjas has raised concerns about immigration's negative impact on the low-skilled labor pool.
- Immigrants Make the Labor Market Great - Center for American Progress
Source excerpt: “In the latest literature analyzing recent enforcement actions, the authors of a National Bureau of Economic Research working paper found small positiv...”
evidence, article, points to yes. Claim: NBER paper found removal of immigrants gave small short-run native wage gains that reverse in the long run, with larger declines.