The Economic Impact of Current Immigration Policies
on Americans and the U.S. Economy

The economy added just 29,000 jobs in September 2026, about a third of what forecasters expected. The two months before were worse than first reported: July has now been revised down to a loss of 10,000 jobs, and August was cut as well. Over the past year, the economy has added roughly 45,000 jobs a month, well under half the pace of the years before the crackdown. The share of adults working or looking for work hit its lowest point in more than five years in July, and has only partly recovered since. This is happening at the very moment the revocation of work authorization has escalated and ICE and immigration arrests have hit all-time highs.

If removing immigrant workers were opening jobs for U.S.-born workers, the government’s own data would show it. It does not. There were about 965,000 fewer U.S.-born Americans working in September 2026 than a year earlier. The share of U.S.-born adults in the workforce fell 0.7 percentage points, from 61.6 to 60.9%. These monthly figures are a snapshot, not a study of cause and effect, but they settle one question: Removing immigrants has not produced a U.S.-born jobs boom.

Brookings compared the 64 cities hit hardest by the 2025 ICE surge against comparison cities and found employment 0.43% below its expected path six months after enforcement began, with no sign of recovery.

About half of the missing jobs would have been held by U.S.-born workers. The shortfall is roughly four times larger than the number of excess arrests; in other words, each arrest is associated with four jobs lost. In a city the size of Atlanta, that is about 13,000 missing jobs.

A national study by Cox and East reaches a consistent conclusion using household survey data rather than payroll data. Comparing areas with large, sudden increases in ICE arrests to areas without, they find that likely undocumented immigrants who remain in the country are working less, and that employment among U.S.-born men falls as well. They find no evidence of gains for U.S.-born workers overall. The declines for U.S.-born men are larger in sectors that rely more heavily on undocumented labor, and largest in leisure and hospitality and other services, which the authors read as consistent with immigrant and U.S.-born workers being complements in production and with lower local spending reducing demand for labor. By their own rough estimates, the average affected area has about 11,300 fewer U.S.-born men at work, alongside roughly 13,000 fewer immigrant workers.

The administration’s central claim was that less immigrant competition would raise bargaining power for workers at the bottom. The Minneapolis Fed found real wage growth for all workers nearly halved from the 2023 to 2024 period into 2025, and that low-wage workers saw an even sharper slowdown. Those are the exact workers who were promised the gain.

The Minneapolis Fed also found that slower immigration can help explain lower payroll growth. Cutting the workforce is not the same thing as strengthening worker power.

Two independent analyses affirm that immigrants and U.S.-born workers are complements, not substitutes, for U.S.-born workers, meaning their presence in the labor market is helpful.

The San Francisco Fed found a nearly one-for-one relationship between changes in immigrant-worker flows and total local employment growth, using local estimates of unauthorized immigrant-worker flows matched against administrative employment data. The relationship held during the 2021 to 2024 inflow and during the slowdown that followed. Effects were largest in construction and manufacturing, where labor constraints also spill into housing supply.

PIIE found the same pattern in industry data. Job growth flattened in industries most reliant on unauthorized immigrant workers, including construction, hotels, restaurants, and home health care, while the rest of the private sector kept growing. PIIE also noted that the native-born unemployment rate increased in 2025. If the crackdown were creating a substitution windfall, immigrant-reliant sectors would be hiring and native-born unemployment would be falling.

The administration regularly cites a steady unemployment rate—two analyses explain why that number no longer means what it used to.

The Kansas City Fed illustrates how low unemployment can be a symptom of a weaker economy and workforce. Lower immigration and an aging population reduce the number of new jobs the economy needs each month to hold unemployment stable. Near-zero job growth no longer produces an unemployment spike, because fewer new workers are entering the labor force to be counted as unemployed. Lower breakeven employment growth is not the same as higher living standards.

Brookings estimates net migration in 2025 fell between negative 295,000 and negative 10,000, the first negative year in at least half a century, and projects it will remain very low or negative in 2026. Brookings also estimates the sustainable pace of monthly job growth had fallen to roughly 20,000 to 50,000 jobs by late 2025 and could turn negative in 2026. That reframes the weak jobs reports of summer and fall 2026 as the labor market this policy produces, not an anomaly. In other words, the low unemployment rates reflect a stagnant jobs market and a shrinking population, not a booming labor force.

The damage is not confined to labor supply. High-visibility enforcement changes where people work, shop, eat, and seek care, which means a raid has a larger economic impact beyond the number of people arrested.

A researcher at the Wharton School linked thousands of geocoded ICE operations to high-frequency commercial data and found foot traffic down roughly 2.7% and spending down roughly 6.2% per location per week after enforcement activity, amounting to billions of dollars in foregone spending in the first year.

An IZA discussion paper confirms the mechanism independently. Using cross-state variation in enforcement intensity after January 2025, the authors estimate aggregate card spending fell 1.7 percentage points in high-enforcement states relative to synthetic controls. On the other hand, jail-based ICE arrests, which are far less visible in daily community life, produced no comparable effect, and transactions that did not require appearing in-person were less affected.

A UCLA study went directly to local businesses to confirm. Across 989 formal-sector businesses within a half mile of nine documented enforcement sites in Los Angeles, researchers found 46,000 fewer customer visits in the two weeks after enforcement activity, which they estimate could amount to $3.16 million in revenue losses.

The childcare sector shows the impact on families. A PNAS study found that a doubling of the ICE apprehension rate, roughly the magnitude of the post-inauguration increase, was associated with approximately 24,500 fewer foreign-born women in center-based childcare settings, with limited evidence that native-born workers replaced them. When centers lose staff, parents lose slots or pay more, and some of those parents lose the ability to work full hours.

Agriculture shows the same pattern. The California Farm Bureau Federation and Michigan State University surveyed 482 farmers across 50 of the state's 58 counties, in work funded by USDA's Office of the Chief Economist. While only two farmers reported direct enforcement on their farms, one in four reported a negative consequence of the atmosphere of fear created anyway: labor losses, operational disruptions, or worker fear. In the Central and South Coast berry and leafy-green region, 41% did. Only 8% of respondents made any adjustment; many absorbed the loss rather than replacing the workers. The authors note that growers most dependent on unauthorized labor were likely least willing to respond, so the figures are probably undercounting the impact.

FWD.us research projects that these policies will cost the average American family an additional $2,150 per year by the end of 2028. The modeled effects concentrate where immigrant labor matters most to production: food and agriculture, construction and housing, leisure and hospitality, transportation, utilities, and everyday services.

The mechanism is straightforward: removing workers does not increase supply. It reduces production capacity in sectors where families already face tight supply and high prices. This is a grocery, rent, repair, restaurant, and childcare story.

This figure comes from a model rather than observed inflation data. The assumption—borne out by the other studies cited here—is that removing workers does not increase supply, but instead reduces production capacity in sectors where families already face tight supply and high prices. When workers disappear, businesses produce less, local spending falls, and costs rise.

New FWD.us projections show that, under current trends, more than 2 million immigrants will have lost deportation protections and work permits by the end of 2026, rising to as much as three and a half million by the end of 2028. That includes roughly 2.1 million workers, with the largest losses in construction (404,000) and leisure and hospitality (277,000). By 2028, these losses would cost $79 billion in annual economic contributions and $24 billion in annual taxes, and more than 2 million U.S. citizen adults and children live in the affected households.

The National Foundation for American Policy (NFAP) estimates the administration's policies could reduce legal immigration by 33 to 50% over four years, roughly 1.5 million to 2.4 million fewer green cards than the FY 2023 pace. The projected cuts fall most prominently on immediate relatives of U.S. citizens, as well as refugees, diversity visa recipients, employment-based immigrants, and other categories.

The effect on our higher education system is already measurable and getting worse. NAFSA projects up to 111,000 fewer international students will enroll at U.S. colleges and universities this fall, costing the U.S. economy up to $3.4 billion in direct economic contribution and nearly 40,000 jobs. International applications to doctoral programs fell 21% for fall 2026 and international admissions fell 17%. International students pay tuition, rent apartments, buy food, and fill research and teaching roles.

PIIE projects the long-term cost of policies like restrictions on H-1B visas and OPT work authorization that would reduce the foreign-born STEM workforce. A sustained one-third reduction in U.S. STEM graduates from abroad would shrink the high-skill STEM workforce by 6.2% overall and 11.5% at the PhD level. PIIE estimates that reduction could cut annual real GDP by $240 billion to $481 billion within a decade.

U.S. Travel reports that inbound international visits declined 5.5% in 2025, driven primarily by reduced visits from Canada, and does not expect a return to 2019 levels until 2029. Note that not every lost visitor can be attributed to immigration policy; exchange rates, airline capacity, global politics, and broader conditions all matter. Even the World Cup did not reverse the trend, with overseas arrivals down 1.8% in June and 7.0% in July compared with the prior year.

The forward-looking policy risk is more direct. WTTC estimates that planned border social media screening changes could reduce visitor spending by up to $15.7 billion and affect as many as 157,000 U.S. jobs. International visitors buy hotel rooms, meals, transportation, and retail goods. Signaling that visitors are less-welcome exports risks diverting that spending to competitor destinations.