- Trump increased immigration removals this year.
- Hiring has significantly decreased, and unemployment among native-born Americans is increasing.
- The unexpectedly low job growth this summer could signal a new standard.
We’re discovering what America appears like withfewer immigrants and fewer jobs.
The administration of Trump has been intensifying its approach to immigration in recent months,ramping up deportationsand travel restrictions. It recently announced a $100,000 charge for newH-1B visa program applicants, which may impact major companies such as Amazon that utilize the program.
Immigration rules might be intensifying the key characteristic of thefrozen 2025 labor market: Employees have not experienced widespread job cuts, but the pace of hiring has significantly decreased. A labor force that is growing at a slower rate, combined with reduced immigration, is expected to result in much lower job creation. However, weak demand for labor alongside a limited supply might prevent unemployment from rising sharply. Additionally, even workers who were born in the country have not yet witnessed a significant improvement in employment opportunities in this sluggish market.
Dante DeAntonio, a labor economist with Moody’s Analytics, stated there is “no question” that changes in immigration policy areaffecting the job market.
A noticeable decline in labor force growth began in the second half of 2024, with the labor force remaining stagnant in 2025 up to now,” DeAntonio stated. “The most direct effect of this shift is expected to be a potential shortage of available workers, especially in sectors that are moreheavily dependent on immigrant workers, such as farming, building, and entertainment/accommodation.
Abigail Jackson, a representative from the White House, stated that President Donald Trump is focused on expanding the U.S. economy and creating employment prospects for American citizens.
There is an ample supply of American minds and workers to expand our labor force, and President Trump’s plan to generate jobs for American employees reflects this Administration’s dedication to leveraging that underutilized potential while fulfilling our responsibility to enforce immigration laws,” Jackson stated. “The Trump Administration is concentrated on safeguarding the American workforce, putting an end to cases of labor exploitation or trafficking, and collaborating with American employers to ensure they have the legal workforce necessary for success.
Here are several ways in which immigration has influenced the labor market.
We might need to adapt to a reduction in available jobs.
Reduced immigration leads to a slower expanding labor force, which may result in thissummer’s unexpectedly weak job growth a new normal.
One indicator for evaluating the labor market’s effectiveness is the breakeven rate, which refers to the amount of job creation required to maintain a stable unemployment level as the labor force expands due to immigration and young individuals entering the workforce. A slower-growing labor force resulting from reduced immigration could cause this breakeven rate to decrease, potentially leading to lower job growth over time.
We will not immediately understand the complete impact of the expected decrease in immigration on population growth, meaning projections about the number of jobs the U.S. must create each month to maintain stable unemployment over time could differ significantly.
Jed Kolko, a senior fellow at the Peterson Institute for International Economics, stated to Business Insider that a net immigration rate of zero would result in a breakeven point near the job growth seen in August. Nevertheless, he noted that the complete impact of the slowdown in immigration remains uncertain. Ablog postFrom Kolko’s findings, it was shown that the breakeven rate in early 2024 was significantly higher.
Other projections for the breakeven rate are higher. A Morgan Stanley report from early September indicated that adding 70,000 jobs per month by year-end is likely to result in stable unemployment. This suggests that current growth is insufficient.
At the opposite end, David Kelly, the global chief strategist at JPMorgan Asset Management, stated to Business Insider that the payroll growth required to maintain stable unemployment levels might be approximately zero.
“At this point in the economy, you’re experiencing very limited growth due to the lack of an increase in the number of people available for work,” Kelly stated.
US-born unemployment has increased
Immigration reforms do not automatically lead to a more favorable job market for non-immigrant workers. The unemployment rate among native-born individuals has slightly increased from the level in January.
“Some individuals anticipated that a decrease in immigration would create job opportunities for local workers,” Kolko stated.
Individuals are struggling to find employment as businesses are not as willing to recruit orlay people offAs they navigate economic instability. “Removing immigrant workers will not protect employees from the effects of tariffs or a downturn in the economy,” said Chris Martin, the lead researcher at the company-review and job-search site Glassdoor.
One factor DeAntonio believes contributes to the delayed positive impact of immigration reforms on non-immigrant job seekers is the wage aspect. He mentioned that “non-immigrant workers are not a perfect replacement for immigrant labor since the jobs typically held by immigrants tend to offer lower wages, and many non-immigrants would not take these roles unless there was a significant increase in pay.”
Recent modifications to the H-1B visa rules might lead employers to consider offshoring work or exploring alternative visa options. “We are expected to prioritize obtaining O-1 visas for employees going forward,” one individual said.startup foundersaid Business Insider. A 2023 paperAccording to Britta Glennon, an assistant professor of management at the University of Pennsylvania’s Wharton School, research indicates that U.S. multinational corporations facing H-1B visa limitations often increase their recruitment efforts in other nations, particularly in China, India, and Canada.
Glennon stated to Business Insider that large corporations are likely to increase their use of offshore approaches unless they specifically require skilled workers in the United States.
“If they are increasing the offshoring, that means more jobs and capital are moving overseas instead of staying in the US,” Glennon said to Business Insider, noting that this would contradict the purpose of the policy adjustments to visa programs such as H-1B. She also mentioned that not every employer, including startups and academic institutions, has the ability or means to move operations abroad.
The building industry is facing challenges.
Certain industries that depend heavily on immigration are not experiencing significant growth. For example, construction employment has remained stable.
Immigration policies are certainly affecting the labor supply by both pushing outimmigrant workersand slowing down applications to operate in the US,” said Martin. “It’s too early to determine exactly how many, but we are probably looking at hundreds of thousands fewer workers.
Kolko mentioned in a recent study that job growth has remained stagnant in construction, home healthcare, and other sectors that depend more on unauthorized immigrant workers, with a three-month annualized increase of only 0.06% in August. Other private industries combined saw a rise of 0.34%, which is slower than the 2.2% recorded at the beginning of the year, as the job market has eased.
Tim Paradis played a role in this story.
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