Trump’s $150 Billion Immigration Crackdown Is Shrinking the Foreign-Born Workforce – What It Means for the US Economy

• The Vanishing Backbone of American Industry
• White House vs. Economists: The Great Labor Debate
• The Hidden Economic Domino Effect
• Historical Precedents and Unintended Consequences
• FAQ Section

The US labor market is facing an unexpected squeeze as Trump's aggressive $150 billion immigration enforcement policies rapidly deplete the foreign-born workforce – historically crucial for filling jobs across multiple industries. While the White House argues native workers will fill these gaps, economists warn of slowing GDP growth, labor shortages in key sectors, and potential long-term economic damage. This deep dive examines the real-world impacts already visible in June's employment data, analyzes competing viewpoints from TRUMP officials versus independent economists, and explores what Deutsche Bank's alarming "equilibrium rate" projection means for America's economic future.

The Vanishing Backbone of American Industry

June's jobs report revealed a troubling paradox: while the US added 147,000 jobs, the foreign-born labor force shrank for the third consecutive month. This trend coincides with Trump's "Big Beautiful" legislative package – a $150 billion behemoth funding border enforcement expansions, mass deportations, and detention center operations. The BTCC economic analysis team notes this represents the most substantial immigration crackdown in decades, with Politico reporting deportation teams now operate at 130% of 2020 levels. Industries like agriculture (where 73% of workers are foreign-born), hospitality (33%), and construction (28%) face immediate strain. The Congressional Budget Office warns this could reduce 2025 GDP growth by 0.3-0.4 percentage points – equivalent to $70 billion in lost economic activity.

White House vs. Economists: The Great Labor Debate

Trump's Council of Economic Advisors chair Stephen Miran insists native workers can fill vacancies, citing 8% unemployment among 20-24 year olds and 14% jobless rates for teens. His solution? Medicaid work requirements and overtime tax cuts to "incentivize" Americans back to work. But Glassdoor senior economist Daniel Zhao counters: "The math doesn't add up – we'd need 2.5 native workers to replace each immigrant's economic contribution." Federal Reserve Chair Jerome Powell reinforced this view, telling legislators that slowing workforce growth "necessarily means slower GDP growth." Real-world examples abound: a Florida tomato grower reported 40% of crops rotting unpicked after ICE raids, while Las Vegas casinos now offer $25/hour for dishwashers with signing bonuses.

The Hidden Economic Domino Effect

Deutsche Bank's client briefing revealed the most alarming data: the "equilibrium" job growth rate could plummet to 50,000 monthly jobs – far below the 200,000+ seen during peak immigration years. This impacts everything from housing markets (immigrants accounted for 39% of new household formation 2010-2020) to tech innovation (55% of US unicorn startups had immigrant founders). The American Enterprise Institute's study shows net migration flatlining could cost $500 billion in cumulative GDP by 2027. Even Trump reportedly expressed concern after meetings with farmers and hoteliers struggling to staff operations. As border encounters drop 61% since policy implementation, the labor pipeline is visibly drying up.

Historical Precedents and Unintended Consequences

Past immigration restrictions offer cautionary tales: the 1964 termination of the Bracero program caused California agricultural output to drop 25% within two years. The current policies differ by targeting both undocumented and legal immigration – H-2B visas for seasonal workers fell 18% year-over-year. Paradoxically, wages in immigrant-heavy sectors ROSE just 2.3% despite shortages, as employers hesitate to invest amid uncertainty. The CBO's 2024 report found post-pandemic immigration boosted GDP without increasing inflation – a rare economic "free lunch" now being revoked. With productivity growth already at 0.8% (half the 2019 rate), the stakes couldn't be higher.

FAQ Section

How many jobs has the foreign-born workforce lost?

While exact numbers are disputed, June marked the third straight month of decline with 147,000 jobs added overall but net losses in foreign-born employment sectors.

What industries are most affected?

Agriculture (73% foreign-born workforce), hospitality (33%), construction (28%), and healthcare (18% of nursing assistants) face acute shortages.

What's the "equilibrium rate" economists mention?

Deutsche Bank projects job growth could stabilize at just 50,000 monthly positions – insufficient to maintain current GDP expansion.

Are native workers filling these jobs?

Data shows only 1 native worker enters for every 3 immigrant jobs lost, with participation rates stagnant since April.

How does this impact inflation?

Paradoxically, wage growth remains muted (2.3%) despite shortages, as employers delay hiring decisions amid policy uncertainty.