Trump’s immigration crackdown risks slowing U.S. job growth, economists warn

While the White House touts strong job gains as the “Trump effect,” economists caution that aggressive immigration enforcement may undermine labour supply and long-term economic growth.

President Donald Trump’s $150 billion “Big, Beautiful Bill” to enhance border enforcement and deportations is drawing fresh concern from economists who warn it may weaken the labour market by shrinking the supply of foreign-born workers.

The foreign-born workforce declined for a third consecutive month in June, despite employers adding 147,000 jobs overall. Economists say this trend could mark the early economic impact of Trump’s immigration crackdown — a core element of his second-term agenda.

While White House officials argue that the megabill will bring more native-born Americans into the labour force, many economists disagree. Federal Reserve Chair Jerome Powell recently warned that slowing labour force growth, including due to declining immigration, could hamper the U.S. economy’s expansion.

Glassdoor’s lead economist Daniel Zhao noted that a slowdown in hiring could signal slower economic growth ahead. The Congressional Budget Office and private institutions such as Deutsche Bank and the American Enterprise Institute have similarly warned that reduced immigration could lower GDP and strain industries dependent on foreign-born workers.

Trump administration officials, including Council of Economic Advisers chair Stephen Miran, argue that the U.S. has an underutilised domestic workforce — particularly among young and part-time workers — and that tax incentives and stricter benefit requirements will encourage them to take available jobs.

Miran rejected claims that the U.S. lacks a domestic labour substitute for immigrants, stating that the right incentives can mobilise native-born workers. However, he acknowledged that policy uncertainty might result in weaker employment numbers in the short term.

Meanwhile, law enforcement encounters with migrants at the U.S. southern border have fallen sharply, signalling a broader decline in undocumented immigration — a factor previously linked to increased labour availability.

Despite political support for tighter immigration, Trump has also admitted concern about how the policies might impact sectors such as agriculture and hospitality, which rely heavily on migrant workers.

As the U.S. faces an ageing population and declining population growth, economists continue to emphasise the importance of immigration in sustaining long-term workforce expansion.

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