Looking for Labor | The Perryman Group

Looking for Labor

By: Dr. M. Ray Perryman
Published in syndication November 05, 2025

Recent data indicate that US legal immigration has slowed markedly under the current tighter immigration policies. There is evidence that more foreign-born persons are leaving than entering, and H-1B visa registrations as well as student and temporary work visas have dropped. While accurate estimates are difficult to generate at best, it appears that the number of foreign-born workers has declined by well over one million in 2025.

Although there are many potential reasons for slowing migration to the United States such as sluggishness in the technology sector and restrained economic growth, it is clear that higher fees, stricter vetting, and expanded enforcement have been primary culprits. Policies to address legitimate border security concerns are obviously both needed and appropriate, but we must distinguish those concerns from essential workforce math. Discouraging responsible immigration threatens the adequacy of the US workforce.

One problem with slower migration is that current US demographic patterns will simply not support sufficient growth in working-age ranges. Birth rates last peaked in 2007 (18 years ago); thus, there will be fewer new entrants each year at the same time that Baby Boomer retirements remain quite high. Immigration accounts for the majority of labor force expansion. Without workers, the economy cannot expand. Shortages are particularly acute in industries such as construction, agriculture, health care, and hospitality. As wages are bid up due to constraints, some of the incremental costs will be passed on to consumers. In addition, many immigrants are highly skilled, which will work to reduce innovation, patents, and startup creation, thereby further slowing growth.

With slower or even negative net immigration, we can expect less economic growth. Credible research has estimated that each one million-person drop in working age immigrants reduces potential gross product growth by 0.05-0.1 percentage point per year. Although not a huge decrease in growth, the problems compound over time.

Moreover, the worker shortages will affect daily life. With insufficient farm workers, food prices will rise. A lack of construction workers will slow projects and raise costs, particularly as we try to address a chronic housing deficiency. There are severe shortages in nurses and home health aides, which will only be exacerbated by slowing immigration.

Several potential policy options should be explored. Streamlining various visa and work permission processes, adjusting numbers to match legitimate workforce needs, reducing fees, and addressing issues at all skill levels are viable options. Comprehensive reform has been needed for decades, and demographics are only heightening the urgency.

The immigration slowdown will constrain the US labor force at a time of lower birth rates, overall aging, and robust labor demand. Simply stated, when you are not making enough people, you need to go and find some. Stay safe!