The U.S. could see hundreds of thousands leave the country this year thanks to President Donald Trump‘s immigration agenda, but experts believe his aggressive campaign of deportations and entry limitations could shrink the foreign-born labor force to the detriment of the economy.
In a paper recently published by the conservative-leaning American Enterprise Institute (AEI), researchers estimated that U.S. net migration could end up between a negative 525,000 and 115,000 this year, which they said reflects “a dramatic decrease in inflows and somewhat higher outflows.” This compares to nearly 1.3 million in 2024, according to Macrotrends, and 330,000 in 2020, when the COVID-19 pandemic brought global travel to an abrupt standstill.
If their lower-end forecasts prove correct, it would represent the first time the U.S. has seen negative net migration in decades.
Given much of the American labor force consists of foreign-born workers—19.2 percent, per the Department of Labor—and immigrants also make up a significant share of the spending market, such a decline could put downward pressure on the labor force and consumer spending and reduce GDP this year by up to 0.4 percent.
This echoes the findings of another paper, published by the Federal Reserve Bank of Dallas last week that estimates the decline in immigration could mean a 0.75 percent to 1.0 percent hit to GDP growth this year.
“The drop in migrant inflows, and the drop in the foreign-born population more broadly, will have adverse effects on growth in the U.S. labor force, which will spill over into almost every sector of the economy,” Madeline Zavodny, one of the authors of Dallas Fed paper, told Newsweek.
This is exacerbated by the country’s low birth rate—already a source of economic unease—which is leading to a shrinking share of the population in the “working-age” bracket.
“The U.S. population is aging,” Zavodny said, “and we rely on new immigrants to help fuel growth in the labor force and key sectors, from agriculture to construction to health care.”
White House spokeswoman Abigail Jackson, in response to some of these fears, told Newsweek: “President Trump’s agenda to deport criminal illegal aliens will improve Americans’ quality of life across the board. American resources, funded by American taxpayers, will no longer be stretched thin and abused by illegals.”
“President Trump is ushering in America’s golden age and growing our economy with American workers,” she added.
Bullshit!!!
Giovanni Peri, a labor economist and professor at the University of California, Davis, said that the jobs impact of a sustained decline in net inflows will be felt the strongest in lower-skilled areas such as construction, agriculture, hospitality and personal services, and roles where American-born workers are unlikely to offset declining migrant inflows. As a consequence, he told Newsweek, prices in these sectors will likely increase.
Stan Veuger, senior fellow in economic policy studies at AEI and one of the authors of the working paper, similarly said that the agriculture, leisure and construction sectors will be hit hardest by the drop in labor supply. He added that, on the demand side, a drop in foreign-born workers will impact real estate, as well as the retail and utilities sectors, the most.
“Large firms may be able to attract some more workers to replace them, usually paying higher wages,” Peri said, “while smaller firms will be more at risk of staying in business as they have smaller productivity and margins.”
Zavodny also said that small businesses will suffer the most—given these traditionally struggle to access temporary worker programs such as H-2A and H-2B visas—but that large employers will be affected too, and that “everyone will lose part of their customer base.”
The American Immigration Council estimates that the country’s foreign-born population possesses about $1.7 trillion in spending power—of which $299 billion comes from undocumented immigrants—and paid $167 billion in rent in 2023.
As outlined in AEI’s paper, lower spending will reduce business revenues, prompting layoffs and putting another form of pressure on the labor market besides the declining workforce.
Despite the potential economic fallout, Trump shows no signs of relenting on his campaign promises regarding immigration, with deportations in full swing and the president having recently signed the GOP reconciliation bill that frees up about $150 billion to help enforce that part of his agenda.
“I would hope so, though I am not optimistic,” said AEI’s Stan Veuger, when asked whether the impact on economic growth could prompt a reconsideration of the administration’s stance.
“I think the people driving immigration policy in the White House do not care about the economic [or humanitarian] impact of their immigration policies.”
Giovanni Peri, a labor economist and professor at the University of California, Davis, said that the jobs impact of a sustained decline in net inflows will be felt the strongest in lower-skilled areas such as construction, agriculture, hospitality and personal services, and roles where American-born workers are unlikely to offset declining migrant inflows. As a consequence, he told Newsweek, prices in these sectors will likely increase.
Stan Veuger, senior fellow in economic policy studies at AEI and one of the authors of the working paper, similarly said that the agriculture, leisure and construction sectors will be hit hardest by the drop in labor supply. He added that, on the demand side, a drop in foreign-born workers will impact real estate, as well as the retail and utilities sectors, the most.
“Large firms may be able to attract some more workers to replace them, usually paying higher wages,” Peri said, “while smaller firms will be more at risk of staying in business as they have smaller productivity and margins.”
Zavodny also said that small businesses will suffer the most—given these traditionally struggle to access temporary worker programs such as H-2A and H-2B visas—but that large employers will be affected too, and that “everyone will lose part of their customer base.”
The American Immigration Council estimates that the country’s foreign-born population possesses about $1.7 trillion in spending power—of which $299 billion comes from undocumented immigrants—and paid $167 billion in rent in 2023.
As outlined in AEI’s paper, lower spending will reduce business revenues, prompting layoffs and putting another form of pressure on the labor market besides the declining workforce.
Despite the potential economic fallout, Trump shows no signs of relenting on his campaign promises regarding immigration, with deportations in full swing and the president having recently signed the GOP reconciliation bill that frees up about $150 billion to help enforce that part of his agenda.
“I would hope so, though I am not optimistic,” said AEI’s Stan Veuger, when asked whether the impact on economic growth could prompt a reconsideration of the administration’s stance.
“I think the people driving immigration policy in the White House do not care about the economic [or humanitarian] impact of their immigration policies.”
https://www.newsweek.com/economic-warning-half-million-leave-us-2100225
