US Braces for First Net Loss in Immigration Since 1970s

The United States is on the cusp of a significant demographic and economic shift, potentially experiencing a net decline in immigration for the first time in over half a century. 

This reversal, driven by stringent immigration policies enacted under President Donald Trump, raises concerns about the country's economic future, labour market stability, and inflationary pressures. Economists from both the Brookings Institution and the American Enterprise Institute are sounding alarms, citing the administration's aggressive stance on immigration, characterised by mass deportations and restrictions on legal immigration pathways, as the primary driver of this downturn. 

The impact is already evident in rising labour shortages across critical sectors, with predictions indicating that this trend could exacerbate inflationary forces and decelerate overall economic growth.

Historical Trends and Current Realities

Historically, the United States has relied on a steady influx of immigrants to fuel its workforce and bolster economic expansion. In 2024, net migration reached nearly three million, marking one of the highest levels in recent history. However, projections for 2025 indicate a sharp reversal, with the potential for a net outflow of migrants by the end of the year.

This decline can be attributed to several factors, including the near-total shutdown of the southern border, the revocation of work permits for hundreds of thousands of migrants, and the administration's intensified efforts to deport individuals who entered under Biden-era programs. Deportations have surged, triggering widespread protests in major cities such as Los Angeles. According to Stan Veuger, an economist at the American Enterprise Institute, the reduction in new arrivals, rather than merely increased deportations, is the predominant cause of this shift. 

Economic Repercussions of Immigration Decline

The shrinking immigrant workforce is already impacting sectors heavily reliant on foreign labour, including agriculture, construction, and hospitality. The Labour Department reports a decline of more than one million foreign-born workers since March, a stark contrast to the previous year's surge in immigration. In Florida, Rachel Blumberg, CEO of the Toby & Leon Cooperman Sinai Residences, has been forced to lay off over 10 employees from Haiti and Cuba due to the administration's revocation of temporary protections. She anticipates losing nearly 40 employees in total, including certified nursing assistants, cooks, and housekeepers. 

"We are heartbroken. Their sudden removal is both destabilising and deeply unjust," Blumberg said, adding that she expects labour costs to rise by $600,000 annually as she struggles to attract new workers with higher wages. "Unfortunately, higher costs will be passed on to the residents of every senior living facility in the entire country that's affected."

The broader economic implications of this decline are substantial. With fewer workers available, businesses may struggle to meet demand, leading to higher wages and increased costs for consumers. Federal Reserve Governor Adriana Kugler recently warned that the slowdown in immigration could contribute to inflation, particularly in industries dependent on immigrant labour. 

Political and Policy Landscape

The Trump administration has made immigration enforcement a central tenet of its policy agenda. A GOP-backed spending bill currently pending in the Senate would allocate $150 billion for immigration enforcement, significantly expanding the administration's capacity to remove undocumented individuals. White House spokesperson Abigail Jackson reaffirmed the administration's commitment to its immigration crackdown, saying, "If you are present in the United States illegally, you will be deported. This is the promise President Trump made to the American people, and the Administration is committed to keeping it."