Employers Say Trump Immigration Policies Are Squeezing the Labor Force

(UNITED STATES) Employers across the country say Trump immigration policies are thinning the labor force just as hiring cools, and new NFAP projections point to steep losses ahead: 6.8 million fewer workers by 2028 and 15.7 million by 2035. Business groups and economists warn that the slowdown is already rippling through construction sites, nursing homes, farms and tech campuses, while the White House insists U.S.-born workers can meet demand as enforcement expands.

The National Foundation for American Policy estimates the workforce will shrink by 6.8 million by 2028, including 2.8 million fewer workers due to legal immigration changes and 4 million fewer due to illegal immigration policies, and by 15.7 million by 2035. The think tank’s model says weaker labor supply will lower the average annual economic growth rate to 1.3% from 1.8% between 2025 and 2035. The Congressional Budget Office has similarly trimmed its 2025 outlook, downgrading growth to 1.4% from 1.9%, citing policy-driven constraints on the labor market.

Those headline figures are landing in real workplaces. In construction, the Economic Policy Institute estimates that deporting 4 million immigrants over four years would erase 2.27 million construction jobs, including 1.4 million immigrant workers and 861,000 U.S.-born workers, cutting the sector’s workforce by 18.8%. In child care, the same scenario would mean 548,000 fewer jobs, with 104,000 immigrant and 444,000 U.S.-born workers displaced—a 15.1% reduction. Farms and food processors are reporting persistent labor gaps that have already prompted canceled shifts and missed harvest windows. The Department of Labor warned the crackdown risks a “labor shortage exacerbated by the near total cessation of the inflow of illegal aliens,” and Investigate Midwest has reported ongoing farm labor problems without a long-term fix from the administration.

The White House counters that a tighter border and stricter hiring rules will push more U.S.-born workers into jobs employers now fill with immigrants. “There is no shortage of American minds and hands to grow our labor force, and President Trump’s agenda to create jobs for American workers represents this Administration’s commitment to capitalizing on that untapped potential while delivering on our mandate to enforce our immigration laws,” said White House spokeswoman Abigail Jackson. Advisers argue that as employers invest more in training and wages, participation among U.S.-born workers will rise.

That wager is being tested against a slowing economy. From June through August 2025, hiring averaged 29,000 jobs per month—down sharply from roughly 400,000 per month during the 2021–2023 boom. Over the past year, the labor force participation rate among U.S.-born workers aged 16 and older edged down from 61.7% to 61.6%, indicating that native workers are not filling the gap left by departing immigrants. Immigrants accounted for 84.7% of U.S. labor force growth between 2019 and 2024, a surge that many economists credit with easing post-pandemic bottlenecks and helping contain wage pressures.

Policy has moved hardest in two places: enforcement on the ground and costs attached to legal routes that employers rely on for skilled hires. The “One Big Beautiful Bill Act,” signed July 4, 2025, steers $150 billion into enforcement, including $46.5 billion to hire 10,000 new ICE agents and $45 billion to expand detention centers. Employers describe a climate of uncertainty around audits, site checks and work authorization renewals that has led some to slow or suspend recruiting plans, particularly for roles where backlogs or denials have become more common.

On the legal immigration front, companies are bracing for a new price tag that hits their highest-skilled pipeline. The administration introduced a $100,000 one-time fee for new H-1B visas, a staple for hiring engineers and other specialists at firms like Amazon, Microsoft and Meta. Business leaders say the charge will scramble budgets and shift projects overseas as managers weigh whether to bring a team to the United States or keep it abroad. Dany Bahar, a senior fellow at the Center for Global Development, said, “A $100,000 visa fee is not just a bureaucratic cost — it’s a signal. It tells global talent: ‘You are not welcome here.’” While the government says rules target abuse and encourage investment in U.S. workers, employers argue the fee will deter mid-sized and startup firms most of all, reducing innovation and the scale of projects that anchor regional economies. For background on the program, employers typically use the USCIS H‑1B specialty occupations pathway to sponsor foreign professionals.

The tightening is also filtering into hospitals and senior care homes that depend on steady flows of work-authorized staff. In Alexandria, Virginia, Goodwin Living, a senior care nonprofit, laid off four Haitian employees after their work permits were terminated. “That was a very, very difficult day for us… we’re still struggling to fill those roles. We need all those hands, we need all these people,” said CEO Rob Liebreich, who fears another 60 immigrant workers could lose their status to work. The nonprofit’s experience illustrates how Trump immigration policies touch both sides of the labor market: roles that are hard to staff at current wages and roles where licenses and credentials keep standards high. Administrators say either loss—of care aides or nurses—forces cutbacks in services and longer waitlists for families already stretched by rising costs.

Manufacturing is feeling the strain in a different way, with technology transfers and plant launches slowed by worker checks and detentions. Last month, Immigration and Customs Enforcement raided a Hyundai battery plant in Georgia and detained 300 South Korean workers, some of whom were “shackled in chains.” The raid “enraged the South Koreans” and prompted a warning from South Korean President Lee Jae Myung that other companies could hesitate to invest in U.S. sites if engineers and line supervisors risk detention. Local officials who had courted EV supply chain jobs worry that delays in staffing and training will push milestones back by months, chilling other foreign direct investment across the region.

In Washington, D.C., the chill is visible in office towers and universities that feed the capital’s tech and policy firms. A Harvard graduate from India working in the city said, “The damage is already done, unfortunately,” as he prepared to move to the UK, citing a hostile environment for skilled immigrants and the new visa fee. Recruiters say cases like his are now common: candidates who once chose the United States for career acceleration are opting for Canada, the UK or Europe, calculating that a path with fewer surprises outweighs a higher salary.

The agriculture and food sectors provide another vantage point on the same dynamic. Meatpacking plants and fruit growers report that audit threats and transportation checkpoints have thinned crews even before deportations, straining output. The Department of Labor’s warning about a “labor shortage exacerbated by the near total cessation of the inflow of illegal aliens” frames what producers say they see daily: fewer hands to pick crops, disinfect barns and handle cold-chain logistics. Investigate Midwest’s reporting underscores the lack of a long-term plan from the administration to stabilize seasonal labor beyond stepped-up enforcement.

Economists tracking NFAP projections say the downstream effects run beyond headcounts. A smaller labor force means less consumption, fewer new businesses, and a weaker base for funding retirement and health programs as the population ages. One reason the pre-2025 labor recovery was so robust, they note, is that immigrant workers expanded both supply and demand: they filled roles and spent paychecks in U.S. communities. Mark Regets, a labor economist at the National Foundation for American Policy, said, “It’s wrong to assume a decline in immigration helps U.S. workers when job growth slows. Immigrants both create demand for the goods and services produced by U.S.-born workers and work alongside them in ways that increase productivity for both groups.”

Administration officials argue that tougher rules will force businesses to train Americans and invest in productivity-enhancing tools. They point to rising wages in some low-wage sectors and say tighter enforcement is necessary to ensure that job postings reach U.S.-born workers first. Jackson’s statement—“There is no shortage of American minds and hands to grow our labor force, and President Trump’s agenda to create jobs for American workers represents this Administration’s commitment to capitalizing on that untapped potential while delivering on our mandate to enforce our immigration laws”—captures the philosophy: enforce the law, shrink unauthorized hiring, and give local workers a clearer shot.

Employers say that approach overlooks how companies actually build teams. In construction, framing crews depend on experienced workers to train apprentices; remove a critical mass and productivity falls for the whole crew, including U.S.-born carpenters. Child care centers run at thin margins; eliminate teachers with work authorization and classrooms close, pushing parents—often mothers—out of the labor force and deepening staff shortages elsewhere. Hospitals that lose foreign-trained nurses and therapists cannot simply reassign tasks without risking patient safety; many must curtail services until new hires clear licensing and background checks. Those adjustments take months or years, and in the meantime projects stall and waitlists grow.

The NFAP projections suggest those pressures will intensify. A 6.8 million reduction in the workforce by 2028 and 15.7 million by 2035 could hit just as retirements accelerate. Slower labor force growth, in turn, feeds into slower GDP growth: the think tank’s forecast of 1.3% average annual growth from 2025 to 2035, down from 1.8%, aligns with the CBO’s near-term downgrade to 1.4% in 2025. For cities that boomed on post-pandemic hiring, the deceleration to an average of 29,000 new jobs per month this summer is a warning sign, especially given how much recent growth—84.7% of labor force gains since 2019—has relied on immigrants.

Inside boardrooms, the debate is shifting from whether to absorb the new costs to whether to relocate work. The $100,000 H-1B visa fee sets a new threshold that multinationals can pay, but that startups and mid-sized firms may not. Bahar’s assessment—“A $100,000 visa fee is not just a bureaucratic cost — it’s a signal. It tells global talent: ‘You are not welcome here.’”—captures a fear common among hiring managers who have watched candidates decamp to Canada or the UK. If fewer senior engineers and scientists come to the United States, they argue, fewer junior U.S.-born workers will be hired to work alongside them, the opposite of the intended effect.

On the factory floor, the Hyundai battery plant raid is already a case study in mixed signals. State officials courted the investment to anchor a new industrial corridor; the company brought specialists to transfer technology; then 300 South Korean workers were detained, some “shackled in chains.” The episode “enraged the South Koreans,” and the warning from President Lee Jae Myung that similar firms may reconsider U.S. projects is reverberating beyond Georgia. For regional planners banking on electric vehicle supply chains, uncertainty over work status for foreign specialists introduces a risk that lenders and boards may not accept.

Nonprofits like Goodwin Living are making choices with immediate human costs. Layoffs of four Haitian workers after work permits ended forced residents to adjust to new faces and schedules. Liebreich’s concern that another 60 immigrant staff could lose their legal right to work points to a deeper fragility in care networks already stretched by retirements and burnout. “That was a very, very difficult day for us… we’re still struggling to fill those roles. We need all those hands, we need all these people,” he said, summing up a challenge that numbers alone cannot convey: the sudden absence of trusted caregivers and colleagues.

As NFAP projections filter into corporate forecasts, more employers are adjusting plans for 2026 and beyond, anticipating uncertainty around both enforcement and legal pathways. Some are diversifying with offshore teams; others are delaying U.S. expansions until they see how the labor pipeline stabilizes. Trump immigration policies are reshaping those calculations in real time, and the next year may determine whether the United States remains the default destination for both high-wage and essential workers—or whether companies and families chart a different path.

What happens next will hinge on whether U.S.-born workers step into roles at the scale the White House expects, and whether the cost and complexity of sponsorship for skilled hires eases or hardens. For now, the data point in one direction: the labor force is smaller than it would have been, job growth has slowed, and employers from battery plants to senior care homes are running short-staffed. As one Washington professional put it while planning a move abroad, “The damage is already done, unfortunately.”