Current immigration policy is hurting the workforce and economy

Last week’s jobs report from the Department of Labor created shock waves in the U.S. Instead of showing 80,000 new jobs, as economists expected, payrolls in the U.S. declined by 23,000 in July. And payroll growth for May and June were revised downward by a combined 100,000. To our surprise, the U.S. has apparently returned to the flat job growth we saw in 2025.

A further analysis of these data reveals another surprise: As payrolls stagnate, the unemployment rate is declining — from 4.3 percent to 4.1 percent in the last two months. The falling unemployment is a result not of having more jobs but of fewer workers seeking them. In the same two months, an astounding 1 million workers fled the labor force, and about 1.4 million have left in the last year.

Why is the labor force shrinking? Baby boomer retirements contribute to this result, though we also see a recent drop in labor force activity among prime-age workers. Instead, a major contributor to the diminishing workforce is our immigration policy.

The Trump administration’s aggressive deportation policies, the ending of Temporary Protected Status for several groups and pressure on universities to enroll fewer foreign students is leading to an exodus of immigrants already here and a strong decline in new immigrant arrivals.

In fact, a Brookings report earlier this year predicted that 2026 would bring net-negative immigration, shrinking the workforce and the economy. So far, that prediction is being borne out by the facts. The jobs report showed that immigrants accounted for nearly half of the decline in the workforce over the last year; if anything, the true effect of immigrant........

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