Will stopping immigration cause labor shortages?

Yes, halting or severely restricting immigration is widely projected by economists to cause significant labor shortages.

While the debate around immigration often focuses on border security and national identity, economic data and research consistently demonstrate that the modern economy relies heavily on foreign-born workers. Stopping the flow of immigration, or actively reducing the immigrant workforce, creates deep structural labor shortages that ripple through the broader economy.

1. Key Industries Most Affected

Certain sectors are highly dependent on immigrant labor, meaning any sudden halt in immigration immediately triggers severe staffing crises:

•Agriculture and Food Processing: Immigrants make up a massive portion of the agricultural workforce (including over half of all agricultural graders and sorters and a significant portion of meatpacking workers). Without these workers, crops go unharvested, supply chains stall, and grocery prices rise.

•Construction: Nearly 30% of all construction workers in the U.S. are foreign-born, with even higher concentrations in specific trades like roofing, drywalling, and masonry. A shortage of construction labor directly slows down housing development, worsening housing crises and driving up home prices.

•Healthcare and Elder Care: Developed nations are facing rapidly aging populations. Immigrants fill a disproportionate share of essential healthcare roles, including roughly 16% of nursing jobs and over 28% of home health aide slots.

•Hospitality, Food Service, and Tourism: Restaurants, hotels, and retail sectors heavily rely on foreign-born workers. When immigration slowed down during the COVID-19 pandemic, these sectors experienced some of the highest vacancy rates on record.

2. The Demographic Factor: Why Native Workers Can’t Fill the Gaps

A common argument is that native-born workers will simply step in to fill the empty jobs if immigration stops. However, demographic trends make this highly unlikely:

•Aging Populations and Low Birth Rates: In the United States and much of Europe, the domestic population is aging rapidly. The retirement of the Baby Boomer generation is outpacing the entry of younger native-born workers into the labor market.

•Education Discrepancies: Native-born workforces are more highly educated than ever before, and most workers seek professional, management, or office jobs. There is an extreme shortage of domestic workers willing to take low-skilled, physically demanding, or seasonal manual labor jobs, regardless of moderate wage increases.

3. Macroeconomic Consequences of Stopping Immigration

The labor shortages caused by halting immigration have cascading effects on the entire economy:

•Inflationary Pressures: When companies cannot find enough workers, their output shrinks. When the supply of goods and services (like food, housing, and childcare) drops but demand remains high, prices inevitably rise.

•Reduced Economic Growth (GDP): Organizations like the Congressional Budget Office (CBO) and major financial institutions point out that immigration is a primary driver of GDP growth. Halting immigration or enacting mass deportations contracts the workforce, leading to a direct shrink in economic output.

4. Do Native Workers Benefit from the Shortages?

Proponents of restricting immigration argue that a labor shortage is actually a good thing because it forces employers to compete for native workers by raising wages and improving working conditions.

While this can cause a very small, temporary wage spike in select low-skilled fields, economic research (including studies from the National Bureau of Economic Research) shows that the long-term impact on native workers is negative:

•The Principle of Complementarity: High-skilled and low-skilled workers do not compete; they complement each other. For example, a construction company needs low-skilled laborers to lay concrete, but it also needs native-born managers, architects, and accountants. If the company cannot find laborers to do the physical work, it stops building entirely, meaning the managers and architects lose their jobs too.

•Investment Retreat: When businesses face permanent, severe labor shortages, they do not bid wages up indefinitely. Instead, they downsize, halt expansions, or close down altogether. This reduces the overall number of jobs available to everyone.

Conclusion

Halting immigration acts as a severe negative shock to the labor supply. While it is occasionally framed as a policy to protect local jobs, the overwhelming economic consensus is that stopping immigration creates persistent labor shortages. This ultimately fuels inflation, cripples vital industries like agriculture and construction, and stunts long-term economic growth, leaving both immigrant and native-born populations worse off.

Citations (8)

1equitablegrowth.orgNonprofits and think tanks
equitablegrowth.org
Backs: “Yes, halting or severely restricting immigration is widely projected by economists to cause significant labor shortages.”
2cmsny.orgNonprofits and think tanks
cmsny.org
Backs: “Yes, halting or severely restricting immigration is widely projected by economists to cause significant labor shortages.”
3wes.orgNonprofits and think tanks
wes.org
Backs: “Stopping the flow of immigration, or actively reducing the immigrant workforce, creates deep structural labor shortages that ripple through the broader economy.”
4econlib.orgEncyclopedias and reference
econlib.org
Backs: “Construction: Nearly 30% of all construction workers in the U.S. are foreign-born, with even higher concentrations in specific trades like roofing, drywalling, and masonry.”
5americanprogress.orgNonprofits and think tanks
americanprogress.org
Backs: “Healthcare and Elder Care: Developed nations are facing rapidly aging populations.”
6econofact.orgAcademic
econofact.org
Backs: “Hospitality, Food Service, and Tourism: Restaurants, hotels, and retail sectors heavily rely on foreign-born workers.”
7forbes.comNews and mediaquality 0.83
forbes.com
Backs: “Inflationary Pressures: When companies cannot find enough workers, their output shrinks. When the supply of goods and services (like food, housing, and childcare) drops but demand remains high, prices inevitably rise.”
8goldmansachs.comCompanies
goldmansachs.com
Backs: “Reduced Economic Growth (GDP): Organizations like the Congressional Budget Office (CBO) and major financial institutions point out that immigration is a primary driver of GDP growth. Halting immigration or enacting mass deportations contracts the workforce, leading to a direct shrink in economic output.”