Trump’s ICE Crackdown Could Hit Your Bottom Line Amid Labor Shortages

An aggressive ICE crackdown under President Trump is beginning to reshape the American economy, with economists warning that the administration’s immigration policies could sharply deepen labor shortages, raise business costs, and slow growth for years to come. Backed by an unprecedented surge in enforcement funding, the Trump policy shift is already shrinking the workforce in key industries and threatening to push up consumer prices, even as the White House insists it is protecting U.S. jobs.

A study by the National Foundation for American Policy (NFAP) projects that Trump’s immigration policies will reduce the U.S. workforce by 6.8 million workers by 2028 and 15.7 million by 2035. That loss comes at a time when the U.S.-born population is aging and growing slowly, leaving fewer domestic workers to replace departing immigrants. Economists say the result will be tighter labor markets in sectors that already struggle to hire, from farms and food plants to hospitals and high-tech labs.

Evidence of the shift is already visible in official data. From January to July 2025, more than 1.2 million immigrants left the workforce, leaving employers with acute labor shortages in construction, agriculture, and food production. The Bureau of Labor Statistics household survey shows a decline of 1.1 million foreign-born workers since the Trump administration began in January through August 2025. Those figures signal a sharp reversal after years in which immigrants made up most of the new workers entering the labor force.

Crucially, U.S.-born workers are not stepping in to fill the gaps created by the ICE crackdown. The labor force participation rate for U.S.-born workers aged 16 and older fell to 61.6% in August, down from 61.7% the previous year, despite repeated claims from the White House that there is ample, untapped domestic talent ready to take these jobs. Between 2019 and 2024, immigrant workers were responsible for 84.7% of labor force growth in America, making their sudden departure particularly damaging for employers that depend on a steady flow of new hires.

Mark Regets, a labor economist and senior fellow at the National Foundation for American Policy, said the economic logic behind the numbers should not surprise anyone.

“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. While it is just one factor, we shouldn’t be surprised that opportunities for U.S.-born workers are falling at the same time an estimated one million fewer immigrants may be in the labor force.”

His warning challenges one of the core political arguments behind the Trump policy, which casts deportations and tighter visa rules as a way to free up jobs for citizens.

The agriculture and food industries offer one of the clearest examples of how enforcement decisions feed directly into labor shortages. In a Federal Register filing, the Labor Department itself acknowledged that Trump’s immigration crackdown risks a “labor shortage exacerbated by the near total cessation of the inflow of illegal aliens.” Farm groups have long relied on undocumented workers and seasonal migrants to pick crops and process meat. With fewer workers available and hiring rules tightening, producers warn that fields could go unharvested and processing lines could slow, pushing food prices higher in supermarkets across the country.

Construction employers, already stretched by a building boom and an aging workforce, report similar pressure from the ICE crackdown as crews lose experienced immigrant laborers. In food production, where tough conditions and lower pay make many jobs hard to fill, deportations and fear of enforcement raids are thinning payrolls further. The source material points to these sectors specifically as early casualties of the Trump policy shift, even before the projected long-term losses fully take hold.

Higher up the wage scale, the administration is targeting the high-skilled workers that major technology companies rely on, introducing new costs and constraints that executives warn could damage America’s tech leadership. A $100,000 one-time fee for new H-1B visas is expected to disrupt hiring plans at companies including Amazon, Microsoft, and Meta, all of which heavily recruit under this visa status. Economists say such a fee, layered on top of existing compliance costs and caps, will deter employers from bringing in needed engineers and specialists, or push them to move more work overseas.

At the same time, Trump’s restrictions on international students working through Optional Practical Training (OPT) and the STEM OPT extension are further narrowing the pipeline of high-skilled talent. These programs have allowed graduates in science, technology, engineering and mathematics to gain work experience in the United States, often leading to longer-term roles. Tightening those avenues, on top of the higher H-1B fee, could make it harder for U.S. firms to attract and keep the scientists and developers they need, especially in cutting-edge fields where the global competition for talent is intense.

The administration’s approach is not limited to tech and farm labor. Trump’s policies are projected to cause a potential loss of hundreds of thousands of immigrant workers across information technology, educational services, and health services. Those sectors depend heavily on foreign-born teachers, nurses, care aides, and IT professionals, particularly in rural areas and poorer regions where staffing has been a long-standing problem. The worry among hospital executives and school administrators is that the ICE crackdown and related rules will deepen shortages they are already struggling to manage.

Taken together, these labor losses translate into slower growth for the wider economy. According to projections cited by NFAP, Trump’s immigration policies will lower the projected average annual economic growth rate to 1.3% from 1.8% between fiscal year 2025 and fiscal year 2035, cutting roughly one-third from expected gains. By 2034, a four-year deportation policy reduces gross domestic product by 1.0 percent; a 10-year policy reduces it by 3.3 percent. Those numbers suggest a sizable hit to national income, corporate revenues, and ultimately to tax receipts and public finances.

Economists link this slowdown to the way immigrants affect both sides of the economic equation. On the demand side, newcomers rent apartments, buy groceries, pay for transport, and use services, feeding money back into local economies. On the supply side, they staff farms, factories, hospitals, and labs, working alongside U.S.-born colleagues in ways that raise productivity and allow businesses to expand. Remove millions of those workers through a prolonged ICE crackdown, they argue, and the country ends up with fewer consumers, fewer workers, and fewer companies able to grow.

The fiscal picture is also more complex than simple slogans about savings through deportation. Even after Congress approved $170 billion in new immigration enforcement spending through the “One Big Beautiful Bill Act,” signed by President Trump on July 4, 2025, economists estimate that permanent deportation would cost an additional $900 billion over the first 10 years. That figure reflects not only the direct costs of arrests, detention and transport, but also the scale of the economic disruption when millions of people are removed from workplaces and communities.

Tax revenues fall as well when unauthorized immigrants are pushed out. According to estimates cited in the source material, 44 percent of unauthorized immigrants contribute to income and payroll taxes. Their removal results in a decrease in tax revenue equal to $187.4 billion from 2025 to 2034. That, in turn, increases primary deficits by $270.1 billion over ten years—or $349.6 billion once dynamic effects such as slower growth are taken into account. For budget planners in Washington, those numbers point to a Trump policy that expands enforcement costs while also eroding one of the revenue streams that supports Social Security, Medicare and other programs.

Beyond raw payrolls and tax bills, the ICE crackdown is also eliminating specific pockets of economic activity tied to Trump’s travel restrictions. Individuals affected by the travel ban on 19 countries represent a notable slice of the U.S. economy. Households led by recent arrivals from these countries earned $3.2 billion in household income, paid $715.6 million in federal, state and local taxes, and held $2.5 billion in spending power. Many of these nationals worked in U.S. industries already facing labor shortages, including hospitality, construction, retail trade, and manufacturing. For employers in those sectors, tighter entry rules mean fewer potential hires at a time when vacancy rates are already high.

Researchers also warn that some of the most damaging consequences of the Trump policy turn up not in models and spreadsheets but in the choices that would-be migrants and students make quietly over time. Nan Wu, research director at the American Immigration Council, said the scale of recent actions may be reshaping how people around the world think about the United States.

“Given the unprecedented scale of these actions, it’s difficult to quantify the chilling effect they may have on immigrants who might otherwise choose to move to or remain in the United States. For instance, international students—who are a critical source of high-skilled talent—may increasingly opt to pursue education or career opportunities in other countries. This shift could significantly disrupt the U.S. talent pipeline, particularly in sectors that rely heavily on STEM expertise and innovation.”

That “chilling effect” matters, economists say, because the country’s future workforce and innovation base depend heavily on students, researchers and entrepreneurs choosing the United States over rivals. If young engineers from India, AI specialists from Nigeria, or biotech PhDs from Brazil decide the climate in Canada 🇨🇦 or Europe looks more welcoming, the impact on U.S. research labs and start-ups may only become clear years from now—long after the immediate headlines about deportation drives and workplace raids have faded.

The enforcement push itself is operating on a scale not seen before. The “One Big Beautiful Bill Act” provided $170.1 billion in new spending for immigration enforcement, making U.S. Immigration and Customs Enforcement, or ICE, the highest-funded federal law enforcement agency in history—funded at a level higher than some foreign militaries. The package includes $45 billion for immigration detention, more than quadrupling ICE’s annual detention budget, $32 billion for immigration agents and enforcement operations, and $75 billion for border enforcement and militarization. According to the agency’s own materials on the U.S. Immigration and Customs Enforcement website, enforcement operations range from interior workplace actions to large-scale national removal efforts, all of which require substantial manpower and infrastructure.

For businesses, those numbers translate into a more visible and sustained presence of enforcement officers in everyday economic life. Employers face higher compliance risks and the threat of losing workers with little notice, especially in sectors where immigrant labor is concentrated. In agriculture and food processing, executives worry that fear of raids will drive remaining workers further underground, complicating efforts to maintain stable production. In technology and healthcare, companies fear that foreign professionals and graduates will decide the risks and uncertainties outweigh the benefits of staying.

The net effect, economists and industry analysts argue, is to squeeze corporate profit margins from several directions at once. Reduced workforce capacity limits how much companies can produce and sell. Slower economic growth dampens overall demand. Higher labor costs—driven by competition for a smaller pool of workers—eat into earnings. Constraints on specialized talent make it harder to innovate, adopt new technologies, or expand into new markets. Combined, those pressures threaten to weaken U.S. competitiveness in the global economy, even as the Trump policy is framed as a way to protect American workers.

With NFAP projecting millions fewer workers by 2035 and growth forecasts already revised downward, the debate in Washington is shifting from whether an ICE crackdown can be executed to what kind of economy it will leave behind. While supporters of the Trump policy argue that stricter enforcement is necessary to restore control over the border and labor markets, the numbers emerging from federal agencies and economic studies point to a more complicated trade-off: short-term political gains at the risk of long-term labor shortages, higher deficits, and a slower, smaller economy.