Image by Tomas Castelazo
Between January and July 2025, over 1.2 million immigrants exited the U.S. labor force, according to preliminary Census Bureau data analyzed by the Pew Research Center. This marks the first notable decline in the immigrant workforce in decades, following a record high of 14 million unauthorized immigrants in 2023. Analysts say this trend reflects the effects of strengthened border security, enhanced immigration enforcement, and voluntary deportation programs initiated under President Trump’s administration.
Immigrants currently represent nearly 20% of the U.S. workforce. Their presence is particularly significant in certain sectors: 45% of farmworkers, 30% of construction workers, 24% of service workers, and 43% of home health aides are immigrants. Their departure is causing visible shifts in agriculture, construction, and healthcare industries.
Some economists argue that deportations may hinder job growth by removing workers who fill half of new positions. However, experts clarify that immigrants do not create jobs but occupy existing ones. The total number of roles at construction sites or farms remains constant, regardless of workers’ immigration status. Moreover, payroll data often fails to capture informal employment, such as cash payments or work done under false Social Security numbers, meaning declines in official payroll figures do not necessarily indicate actual job losses but rather the removal of undocumented workers.
Farmers and contractors report labor shortages and concerns about wasted crops, attributing these challenges to a lack of willing workers. However, these shortages often stem from low wages that domestic workers refuse to accept. It is sometimes economically more viable for employers to leave crops unharvested and receive subsidies than to increase pay. Over time, as wages rise to attract legal workers, these industries adapt. The same pattern applies to construction and other sectors facing worker shortages at low pay levels. Basic economic principles suggest that when undocumented workers leave, positions open to citizens and legal immigrants, and wages increase accordingly. Although some businesses might respond by automating or closing, this reflects a market adjustment favoring fair labor standards.
The notion that Americans are unwilling to perform certain jobs is challenged by historical evidence. Decades ago, Americans regularly worked in sectors now dominated by undocumented immigrants, such as construction, meatpacking, and hospitality, when wages were competitive. The influx of unauthorized workers provided employers with cheap labor, which contributed to depressed wages and reduced opportunities for U.S. workers.
Today, most jobs — including lawn care, construction, car washing, and cleaning — were once filled by Americans and can be again if wages are adequate. While seasonal farm labor like fruit picking may be less attractive due to changes in workforce mobility, the primary barrier is employer reluctance to offer fair pay. When undocumented workers leave, wages tend to rise, and legal workers fill those roles. Some businesses may opt for automation or closure if they cannot operate without inexpensive labor, but this is a natural outcome of market forces. Even in cases where automation replaces some positions, a substantial number of jobs remain available to legal workers at improved pay levels.
Regarding concerns about lost tax revenue from deportations, the commonly cited figure of $96.7 billion includes substantial amounts from sales, excise, and property taxes, which are generally unaffected by immigration status and will continue to be paid by legal workers. Only a smaller portion—about $7 billion or 21%—relates to income taxes, which also includes contributions tied to false Social Security numbers. The actual loss in legitimate tax revenue is therefore significantly less.
Replacing unauthorized workers with legally employed individuals earning fair wages can increase income tax receipts. A legal worker earning $20 per hour contributes more in taxes than an undocumented worker paid $8 under the table. Additionally, payroll taxes and employer contributions to unemployment insurance and workers’ compensation improve with formal employment, while sales and property tax revenues remain stable.
In summary, the transition from undocumented to legally employed workers has the potential to boost tax revenues, raise wages, and strengthen the overall labor market. Contrary to some claims, deportations do not necessarily reduce jobs or government revenue but rather can restore opportunities for American and legal immigrant workers.