Tijuana people in Mexico are looking at the US-Mexico border wall at Borderfield State Park in Imperial Beach, California on August 17, 2025.
Kevin Carter | Getty Images News | Getty Images
According to some economists, early evidence suggests that White House policies reduce the size of the migrant workforce and contribute to the recent drawdown of the entire US labor pool.
CNBC spoke with various economists from financial companies, economic research institutes and think tanks, and reviewed recent research notes and analyses published by economists in the immigration and job markets.
Those experts have said or written that if migrant workforce reductions are maintained, such a trend will be a concern for the US economy.
This is because the economy is increasingly dependent on immigration and increasingly dependent on the growth of the population and labor force given demographic trends among the US-born masses.
Moody’s chief economist Mark Zandy said the downward shift in migrant workforce over the past few months has been “decisive.”
“There’s no debate about what’s going on there,” Zandi said.
“The sign is attached”
President Donald Trump pursued the immigrant agenda that he called “very aggressive.”
The White House, for example, is trying to end birthright citizenship, end birthrights and limit access to exiles, among other actions. Many measures have been challenged in the courts.
The Trump administration is also preparing rules to end the H-1B visa lottery. It employs a selection process that supports temporary work visas for university graduates in “specialised” fields such as architecture, law, and technology – a choice process that supports high-paying incomes.
With the available data, it is difficult for the migration flow and migrant workforce pool to track what is happening in real time, the economist said.
Some also point to the Bureau of Labor Statistics data as a single signal.
According to BLS data, the size of the foreign-born workforce has decreased by around 1.2 million since January, and has totaled 32.1 million in July. (Some government data distinguishes between “foreign-born” and “native-born” workers.
Nancy Vandenheuten, lead economist at Oxford Economics, cited the data in an August 1st research note.
“[S]”IGN is increasing the shrinking foreign-born workforce due to the Trump administration’s immigration policy,” she wrote.
The US workforce includes all people over the age of 16 who are actively working or looking for a job.
The reported decline in the foreign-born workforce of BLS is “very dramatic” and greater than expected, said Stephen Brown, vice-director of North American Economics at Capital Economics.
According to a JP Morgan analysis, labor force participation rates fell by 0.3 percentage points in July, while foreign-born workers were much larger.
“[M]David Kelly, chief global strategist at JP Morgan Asset Management, writes that immigrants appear to be leaving the workforce.
White House spokesman Abigail Jackson said he issued an email statement that the Trump administration is committed to helping our employers “ensure that we have the legal workforce needed to be successful.”
“There is no shortage of America’s hearts and hands to boost our workforce, and President Trump’s agenda to create jobs for American workers represents this administration’s commitment to exploiting its undeveloped possibilities while submitting our mandate to enforce immigration law,” Jackson wrote.
“Substantly weak” employment growth
Some economists say BLS data on the workforce segments of foreign-born, native-born workers are not a reliable measure of short-term trends due to various habits about how they were collected and reported.
Trump fired the department’s chief in August after questioning the accuracy of BLS statistics and unexpectedly showed low employment growth.
However, there is other evidence that economists have pointed out that the migrant labor pool is shrinking.
For example, employment growth in industries that rely heavily on undocumented immigration is “significantly weaker” than in the other private sector, said Jed Corco, a senior fellow at the U.S. Department of Commerce’s Institute of International Economics during the Biden administration.
According to Corco, employment growth in industries such as hotels, restaurants, construction and home health aides have been flat since their inception in 2025. In July, employment grew at a 0% rate in the immigrant-heavy industry, he found.
Meanwhile, the rest of the private sector has slowed employment growth – a pace of about 0.6% in July – but the slowdown has not been particularly tough, he said.
Corco analyzed federal data to calculate the average annual employment growth rate over three months for each industry.
[S]IGN is increasing the shrinking foreign-born workforce due to the Trump administration’s immigration policy.
Nancy Vanden Hauten
Lead Economist at Oxford Economics
Oxford Economics American economist Matthew Martin found an additional link between immigration policy and its impact on the workforce.
Workforce growth has “stuck” in states such as Texas and Florida, with per capita immigrant arrests high, he wrote in his August 4th research notes, citing immigration and customs enforcement data.
“States like Texas and Florida have seen more severe crackdowns than California, New York and New Jersey,” writes Martin. In contrast, in “low arrest” states, he writes, the workforce is growing aggressively in 2025.
“This data shows that, since arrests, foreign-born labor forces in low-populated countries have been on the rise since the beginning of the year, but the labor forces in high-owned countries are flat-relaxed,” he wrote.
The labor force is “very slow”
On July 10, 2025, a US federal agent and immigration officers left the farm facility where US federal agents and immigration officers operate as security guards.
Daniel Cole | Reuters
Nationwide, immigrant arrests have more than tripled since 2024, reaching more than 1,100 a day by mid-June, writing by Martin, citing ICE data.
Last month, Federal Reserve Chairman Jerome Powell cited immigration policy as a factor behind the slowdown in labor supply.
“[B]Because of immigration policies, our flow to the workforce is actually very slow,” Powell said at a July 30 press conference.
The total US workforce, including immigrants and native-born workers, has been declining for the third consecutive month, according to BLS data. According to BLS, 402,000 people fell to around 170 million from January to July.
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Arrests and deportation, fear of appearing in the workplace, and a reduction in the flow of immigration to the US, could play a role, the economist said.
JP Morgan’s Kelly has phased out two programs that phased out the temporary right to live and work in the United States to roughly 1.8 million immigrants from troubled countries. This change in status could reduce the labor supply by more than a million workers, he wrote, citing JP Morgan’s research.
Of course, the decline in labor supply is not just the function of immigrants.
For example, unemployed people who are disappointed by the difficulty of finding their current job may choose to sit on the sidelines rather than seeking a job. That means it’s not counting in the workforce, Brown said.
The White House has also taken steps to legally boost the employment of immigrants in the United States.
The Labor Department established the Immigration Policy Bureau in June, saying the administration would streamline the process for securing temporary and permanent work visas, for example. Trump also signed an executive order in April to support highly paid, skilled trade jobs.
Why a shrinking workforce is a concern
US Customs and Border Patrol Agent (CBP) Border Patrol Stands in a state park in border fields with US Mexican border walls in the background on August 17, 2025 in Imperial Beach, California.
Kevin Carter | Getty Images News | Getty Images
Workforce growth is one of the “important” things that determine how quickly the US economy can expand, and how productive companies are.
A sustained decline in the size of the workforce will be a concern that it is far from guaranteed, said Michael Strain, director of economic policy research at the American Enterprise Institute, a right lender think tank.
“If you want the kind of economic growth you consider historically successful, the demographic reality is that you have to increase the influx of immigrants,” Stock said. “There’s no real way around that.”
Without immigration, the population will shrink from 2033 as the birth rate is predicted to remain low, according to the Nonpartisan Congressional Budget Office.
[B]Due to immigration policies, our flow into the workforce is very slow.
Jerome Powell
Chair of the Federal Reserve System
Additionally, small labor pools could pressure employers to raise wages and attract talent, potentially exacerbating inflation, and could lead to lower tax revenues to fund programs like Social Security, the economist said.
For example, the construction industry, which is already struggling with labor shortages, is at risk of wage inflation, according to a Bank of America Institute report issued Tuesday.
The report found that average wage growth in July approached 8% in the construction industry, almost double the national average.
“Immigration behaviour can deepen labor shortages, raise costs and create serious financial risks for contractors,” the Bank of America report said.
Construction workers built a new home in Altadena, California on August 15th, 2025.
Mario Tama | Getty Images
Approximately 34% of construction workers are immigrants, with an average of 20% across all sectors, the report says. It says its share is close to 60% in deals such as Drywall installers and plasterers.
A joint analysis published in June by the National Institute of Architects, National Housing Association and the University of Denver shows that the long construction time costs the US economy around $10.8 billion a year, with new single-family homes increasing on average around $2,600.
However, some economists are skeptical that the United States will suffer a long-term decline in the migrant workforce.
The Trump administration’s plan probably isn’t to make a “net-out transition,” Strain said.
“We did not see any netout transitions [Trump’s] The first term was, “It will cause all sorts of problems for businesses, for the main sectors of the economy that the president cares about like construction, and then we’ll be surprised when we’re done.”
“But who knows?” he added.
