President Donald Trump’s tough policies on immigration are having knock-on effects in the labor market — a situation that will only get worse, experts warn.
Newsweek reports that many businesses are having difficulty filling open roles in industries like construction, hospitality, agriculture and health care — roles often filled by immigrant workers. (1)
In fact, the Brookings Institution and the American Enterprise Institute estimate that the loss of foreign workers will either flatten or cause monthly U.S. job growth to decline in the next few years (2). Other gloomy signs, like significant dips in hiring and a downgraded economic forecast from the Congressional Budget Office are telling signs that mass deportations and strict immigration policies are negatively impacting the economy.
Must Read
- Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don’t have to deal with tenants or fix freezers. Here’s how
- Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — here’s what it is and 3 simple steps to fix it ASAP
- Robert Kiyosaki says this 1 asset will surge 400% in a year — and he begs investors not to miss its ‘explosion’
Now, Newsweek reports, both business leaders and Hispanic advocacy groups are calling for policy changes.
So, what do you need to know about how these policies are costing the U.S. — and how you may start to feel the effects?
Labor shortages and immigration
The Associated Press reports that business owners who rely on immigrant workers are feeling the pinch from new immigration policies. These jobs include cleaning services, hospice care and farm labor.
“You got ICE out here, herding these people up,’’ John Boyd Jr., a farm owner in Virginia and founder of the National Black Farmers Association, told the news outlet.
“[Trump] says they’re murderers and thieves and drug dealers, all this stuff. But these are people who are in this country doing hard work that many Americans don’t want to do.”
The influx of foreign workers over the last few years is also responsible for the U.S. avoiding a recession following the pandemic, experts say. Temporary foreign workers eased labor shortages and upward pressure on wages and price.
“Immigrants are good for the economy,’’ Lee Branstetter, an economist at Carnegie Mellon University told AP. “Because we had a lot of immigration over the past five years, an inflationary surge was not as bad as many people expected.’’
However, President Trump’s policies are targeting immigrants — both at the top and bottom — deporting low-wage laborers and discouraging skilled immigrants from applying for visas and citizenship.
Read more: I’m almost 50 and have nothing saved for retirement — what now? Don’t panic. These 6 easy steps can help you turn things around
Changes to immigration law
In June, a new proclamation on immigration restricted entry and visa issuance for citizens of 19 foreign countries, allegedly to protect the country from threats to national security.
“We are protecting our nation and its citizens by using rigorous, security-focused screening and vetting procedures to ensure that individuals approved for entry do not endanger national security or public safety,” according to a Department of State news release (4).
In August, the Visa Bond Pilot Program was implemented for certain B-1 and B-2 visa applicants. It will now require visitors from, at first, two and now, six foreign countries to pay a refundable deposit of $5,000, $10,000, or $15,000, reimbursed if the traveler fully complies with the conditions of their stay. The “visa integrity fee” will now also require applicants to pay $250 for most nonimmigrant visa applications.
And, as of Sept. 2, nearly all nonimmigrant visa applicants must attend an in-person interview with a U.S. consular officer, and nonimmigrant visa applications must now be submitted in the applicant’s country of residence or nationality, eliminating the former ability to apply from a third country.
In addition to these changes, the promised $170 billion budget over four years for border and interior enforcement through ICE (U.S. Immigration and Customs Enforcement) is intended to deport 1 million immigrants each year. (5)
Newsweek reports that these policies are projected to cost the U.S. up to $88 billion each year to deport the projected number of immigrants, and the policy could carry a one-time cost of $315 billion, according to data from the American Immigration Council.
The impact on American businesses
"We are calling for a common-sense work permit program that recognizes the essential contributions of long-term, tax-paying, law-abiding immigrant workers — especially those who have become indispensable to our economy and communities," Massey Villarreal, co-chair of Comité de 100, a bipartisan coalition of Mexican American and Latino business leaders, told Newsweek.
Immigration raids are also reported to be having a negative impact on Hispanic communities.
"Right now, labor shortages are one of the biggest challenges facing our local employers. Giving long-term immigrants the ability to work legally isn’t just the right thing to do — it’s essential for our economy," Isamac Torres-Figueroa, chairwoman of the Berks County Hispanic Chamber in Reading, Pennsylvania, told Newsweek.
"It helps fill critical jobs, especially in industries that struggle to recruit and retain workers."
According to the U.S. Bureau of Labor Statistics, foreign-born workers accounted for 18.6% of the labor force in 2023. Service occupations like construction, transportation and material moving stand to face the worst losses to employment figures according to this data, and other sectors like hospitality, health care and delivery services could also feel severe shortages. (6)
The economic impact is also set to be startling. Some reports suggest that legalizing the undocumented population would lead to an economic boost of more than $1 trillion over the 10 years that followed. (7) Conversely, the current immigration policies are set to reduce the GDP by $5.1 trillion over the next ten years. (8)
How you could be impacted by labor shortages
While some argue that foreign workers take American jobs, data has shown that to be untrue, and foreign workers allow Americans to take higher-paying jobs that require better qualifications. (9) Without the labor provided by immigrants, service industries like those mentioned above are most likely to suffer, and wait times, shortages and reduced service standards could be on the horizon.
However, one of the biggest impacts is set to be in the food and agriculture industries. An estimated 1.7 million undocumented workers are employed “in some part of the U.S. food supply chain,” according to reporting from The New Republic. (10)
"Mass deportations could affect our entire dairy industry throughout the U.S.," Jennifer Tilton Flood, a dairy farmer from Maine, said in an interview with Newsweek last year. (11)
Similarly, Sam Sanchez, owner of Chicago’s Third Coast Hospitality and a board member of the National Restaurant Association, told Newsweek at the time, "if these workers are deported, restaurants will close, leading to massive losses in revenue and a significant downturn in the economy."
A hit to the American food economy could have far-reaching impacts. The lack of workers would likely drive a spike in food prices. Coupled with tariffs, putting food on the table could become even more unaffordable.
"Over 54% of our employees are undocumented. Many of these individuals are good, law-abiding citizens who worked tirelessly throughout the pandemic but were ineligible for unemployment benefits,” Sanchez said.
"We need policies that ensure these essential workers can stay and continue contributing to our economy."
What to read next
- Are you richer than you think? 5 clear signs you’re punching way above the average American’s wealth
- Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich — and ‘anyone’ can do it
- This tiny hot Costco item has skyrocketed 74% in price in under 2 years — but now the retail giant is restricting purchase. Here’s how to buy the coveted asset in bulk
- 22 US states are now in a recession or close to it — protect your savings with these 5 essential money moves ASAP
Join 200,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Newsweek (1), (11); American Enterprise Institute (2); The Associated Press (3); U.S. Department of State (4); Brennan Center for Justice (5); Center for Migration Studies (6), (7); Center for American Progress (8); Economic Policy Institute (9); The New Republic (10)
This article originally appeared on Moneywise.com under the title: Business owners and economists sound the alarm over ICE crackdown — how Trump’s policy could hit your bottom line
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.