Immigration Crackdown Fails to Deliver Jobs for US-Born Workers

One year into President Donald Trump’s immigration crackdown, there’s little evidence that closed borders are boosting employment for US-born workers.

Net migration into the US may have been negative in 2025 for the first time in at least 50 years, according to estimates from researchers at the center-right American Enterprise Institute and center-left Brookings Institution. That squeeze coincided with a rise in joblessness among the native-born, even as some businesses say it’s becoming more challenging to fill positions.

Economists say the disconnect reflects a structural mismatch: In many labor-intensive roles that rely heavily on immigrants, employers can’t easily replace them with American workers. That undercuts a central tenet of Trump’s agenda and, if it persists, could also restrain economic growth over time.

“Look at what we’re seeing: The US-born unemployment rate has been going up. The US-born labor force participation rate has dropped,” said Mark Regets, a senior fellow at the National Foundation for American Policy, a non-partisan research organization that focuses on trade and immigration.

“So if we’ve had a big withdrawal of immigrants from the labor force, we don’t see any sign of the US-born workers getting more employment because of that.”

Government data have been inadequate for measuring immigration swings in real time. But some firms in industries employing large shares of immigrants — including construction, leisure and hospitality and food production — say it’s taking longer to find workers, with few native-born job seekers turning out despite mounting job losses in white-collar occupations.

Jane Carroll, who makes and sells frozen meals in New York’s Hudson Valley region, started seeing fewer applicants after a wave of immigration enforcement actions in the area last summer.

Carroll, who was featured on the TV show “Shark Tank” last year, maintains a small payroll of five people including herself, but will sometimes need twice as many workers at the plant where she prepares the meals. In early 2025, a job ad typically yielded around 20 applicants within 24 hours, she said. Now she gets about five.

Jane Carroll, chief executive officer of Jane Foodie.

Photographer: Joe Buglewicz/Bloomberg

Jane Foodie frozen meals.

Photographer: Joe Buglewicz/Bloomberg

The pay starts at $20 an hour, and Carroll will occasionally boost it by a few dollars to attract more candidates. But she’s skeptical higher wages can fix the problem because immigrants are often the only ones willing to take temporary positions, in her experience. And as a small-business owner, she says she’s limited as to how much more she can offer.

“That’s cutting into my margins,” Carroll said. “In order for me to compete against the big companies, it’s getting tight.”

Structural Rift

The hiring squeeze is exposing a longstanding structural rift between the kind of work the vast majority of Americans aspire to do and the manual-labor roles that face persistent staffing shortages, according to Ron Hetrick, principal economist at the labor data and analytics firm Lightcast.

In construction and extraction occupations, the foreign-born share of employment rose from about 22% in 2003 to almost 36% in 2024, according to data compiled by Bloomberg. In food preparation and serving jobs, another major employer of immigrants, the share of workers who were foreign-born rose from about 22% to more than 25% over the same period.

For Hetrick, there are parallels to the pandemic: When restrictions on activity were lifted and restaurants, bars and hotels reopened, they struggled to staff up — even as they ratcheted up pay — with borders remaining closed.

It wasn’t until the Biden administration lifted immigration restrictions and more workers flowed into the country that the labor need was met. Job openings peaked at 12.1 million in early 2022, according to Bureau of Labor Statistics data, and came down steadily over the next two years.

“We had the highest wage inflation we’ve ever seen in those jobs, and yet we couldn’t get anybody into them,” Hetrick said. “We just have to be very honest about who does this work and recognize our vulnerabilities.”

There are obvious differences between then and now, too. Job openings aren’t taking off — they tumbled in December to the lowest level since 2020. Most measures also indicate national wage growth is decelerating, even as some pockets of the labor market that are most reliant on immigrants, like construction and traveler accommodation, are registering faster pay increases.

In the long run, a decline in the immigrant population could lead to higher wages and more flexible working conditions, drawing more people into the labor force who are not currently working or looking for jobs, said Steven Camarota, director of research at the Center for Immigration Studies, a think tank that favors stricter immigration enforcement.

Men in their 20s and 30s without college degrees who are not now working could benefit in particular from more attractive work opportunities in sectors like construction and food services — but first, some of them may have to overcome health challenges, criminal records or other issues making it hard for them to work, Camarota said. US labor force participation among prime working-age men — those who are 25 to 54 — was in secular decline between the 1960s and the 2010s, and though it’s ticked up in recent years, it remains below 90%.

Camarota also acknowledged tariffs probably dented business confidence in 2025, reducing demand for labor.

“What we’d hope would happen is that over time, if there were fewer immigrants in the country, we would draw some more of these men back in the labor force,” he said. “But I don’t know if one year is going to be enough to make much difference.”

Speed Limit

“President Trump pledged to put Americans and America First, and that’s precisely what his immigration policies are achieving: as real wages keep growing, the prime age labor force participation has increased to a near 25-year high as more and more Americans are coming off the sidelines to partake in America’s economic resurgence,” White House spokesman Kush Desai said by email.

The labor participation for prime-age workers is near the highest since 2001, government data published last Friday show, but that of people over 16 who were born in the US has dropped in recent months, and is near the lowest level since 2021.

The immigration slowdown is restricting what economists say is a main avenue for growth of the labor force, with birth rates at a record low and more baby boomers reaching retirement age.

Recent research from Federal Reserve Bank of San Francisco found the working-age population would have likely started shrinking over a decade ago if not for immigration — and last year, according to the analysis, Trump’s crackdown reduced growth of the prime-age labor force by almost a full percentage point.

Nonfarm payrolls rose just 13,000 per month over the last year,a weak pace of job growth that’s historically been seen only when the country was getting in or out of a recession. Economists widely believe the lack of immigration has been a key factor limiting the rise in the unemployment rate, which was 4% when Trump took office in January 2025 and now stands at 4.4%.

But the shrinking pool of available labor represents a potential “speed limit” for the economy, said Michael Gapen, the chief US economist at Morgan Stanley. He sees potential for an acceleration in 2026 thanks to a wave of business investment related to artificial intelligence and fiscal stimulus from tax cuts enacted last year.

In that case, “you could see that labor demand picks up a bit, and then some of those shortages could be revealed,” he said.

Domino Effect

Ed Brady, chief executive of the Home Builders Institute, said the Trump administration’s crackdown has made labor shortages more acute in residential construction, where immigrants account for about 30% of the workforce.

Brady, who helps train potential construction workers and pairs them with employers across the country, said he’s heard of several instances in recent months in which job sites were temporarily shuttered following immigration enforcement actions, because workers stopped showing up out of fear: “It definitely has a domino effect,” he said.

The disruptions are happening at a time when business is slow overall, as high home prices and elevated mortgage rates limit demand for new construction. But site managers are still facing trade-offs, according to Brady: pay up for highly skilled workers, or hire someone with less experience who is going to be less productive.

Efforts to spread awareness about career opportunities in construction are helping to increase the number of Americans interested in working in the field, but not enough to close the gap, Brady said. Construction has seen a steady erosion in pay relative to other sectors over the last half century — including since pre-pandemic — though wages have started growing faster than the national average again over the last few years.

In the meantime, some site managers are already having to turn away business because they don’t have the labor.

“We’ve got shortages in a slow market,” Brady said. “Tell me what’s going to happen in a booming market?”

--With assistance from Nazmul Ahasan and Reade Pickert.

To contact the reporter on this story:
Jonnelle Marte in Atlanta at jmarte5@bloomberg.net

To contact the editors responsible for this story:
Matthew Boesler at mboesler1@bloomberg.net

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