The Trump administration’s immigration crackdown is beginning to ripple through the wider U.S. labour market, with new academic research suggesting that intensified deportation efforts are costing jobs for American-born workers alongside immigrants.
A working paper released by researchers at the University of Colorado Boulder and published through the National Bureau of Economic Research found that increased Immigration and Customs Enforcement, or ICE, activity over the past year coincided with sharp declines in workforce participation across several industries heavily dependent on immigrant labour.
The findings challenge a central economic argument behind the administration’s mass deportation campaign, which President Donald Trump framed as a way to create more opportunities for U.S.-born workers after returning to office in 2025.
ICE enforcement surged in construction and agriculture hubs
Researchers analysed labour market data alongside ICE arrest figures during a period when daily immigration arrests reportedly climbed from roughly 300 to almost 1,300 nationwide. They compared employment outcomes in regions with major increases in enforcement activity against areas where arrests remained relatively stable.
The study estimated that around 1.2 million foreign-born workers have exited the labour force since the administration expanded enforcement efforts. In areas experiencing heightened ICE operations, researchers found that thousands of likely undocumented male workers stopped reporting to work, largely because of fears linked to potential detention.
The paper concluded that roughly six immigrant workers left the workforce for every ICE arrest recorded in heavily targeted regions.
At the same time, employment among U.S.-born men in sectors tied closely to immigrant labour also declined. Researchers estimated that approximately one American-born worker lost employment for every six undocumented workers who stopped participating in the labour market.
“Heightened ICE activity is harming the labor market overall, and we find no evidence that it is benefiting U.S.-born workers,” study co-author Chloe East said in a statement. “If anything, job opportunities for U.S.-born workers are going down as a result.”
Construction emerged as one of the sectors most exposed to the labour disruption. The researchers found that employment rates for U.S.-born construction workers fell by about 3% in areas facing increased immigration enforcement.
Why immigrant labour shortages affect American workers
The report centres on a labour economics concept known as complementarity, where different categories of workers support each other within the same business structure rather than compete directly for identical roles.
In industries such as agriculture, hospitality, food processing and construction, immigrant workers often fill physically demanding or lower-paid jobs that allow companies to maintain larger operations. U.S.-born workers, meanwhile, frequently occupy supervisory, logistical or skilled positions linked to those same businesses.
When employers lose access to immigrant labour, the entire operation can contract rather than simply replacing one group of workers with another.
The findings align with broader concerns raised by economists over the long-term effects of aggressive deportation policies. A 2025 report from the Penn Wharton Budget Model found that large-scale deportations could reduce wages even for highly skilled workers over time because shrinking labour pools would slow business expansion and investment.
The labour pressures are already visible across parts of the U.S. economy. The Associated General Contractors of America reported last year that nearly half of construction firms experienced project delays tied to labour shortages. Almost 30% of firms surveyed linked staffing problems directly to immigration enforcement measures.
That issue could become more significant as infrastructure spending from federal programmes continues to flow into construction projects nationwide. According to Deloitte’s 2026 engineering and construction outlook, labour scarcity remains one of the sector’s largest operational risks, especially in states with strong population growth and large commercial development pipelines.
Businesses may cut back rather than raise wages
One of the more notable findings in the study was the absence of evidence that employers were substantially increasing wages to attract more U.S.-born workers into vacant positions.
Instead, researchers said companies appeared more likely to reduce workloads, delay projects or scale back operations entirely when labour became unavailable.
That outcome runs counter to political arguments suggesting tighter immigration enforcement would naturally create higher-paying opportunities for native-born workers. Economists have long noted that certain labour-intensive industries struggle to replace immigrant workers quickly because the available domestic workforce is either too limited or unwilling to accept physically demanding jobs at existing wage levels.
The researchers cautioned that the economic effects could widen if labour shortages persist across industries dependent on seasonal or lower-wage workers.
For investors and business leaders, the next phase of the immigration crackdown may become less about politics and more about operational capacity. Companies in construction, agriculture and manufacturing are likely to face mounting pressure over staffing, project delivery and rising costs if labour participation continues to weaken.
