Immigration Curbs Threaten U.S. Manufacturing Workforce and Economic Growth, New Analysis Warns

Study Projects Major Labor Shortfalls and Slower GDP Expansion Under Current Policies

A comprehensive new study reveals that restrictive immigration policies could reduce the U.S. workforce by millions of workers and significantly slow economic growth over the coming decade, with particular implications for manufacturing and technology sectors. The analysis from the National Foundation for American Policy (NFAP) suggests these policies may undermine the very economic growth they aim to protect.

Study Projects Major Labor Shortfalls and Slower GDP Expansion Under Current Policies
Manufacturing and Tech Sectors Face Particular Pressure
Economic Growth Projections Downgraded
Administration Position and Countervailing Views
Broader Economic Implications
Looking Forward

The projected workforce reduction reaches 15.7 million by 2035, with net job losses estimated at 4 million workers by 2028 and 11 million by 2035. This contraction comes despite administration claims about available domestic labor pools., according to according to reports

Manufacturing and Tech Sectors Face Particular Pressure

The analysis examines multiple policy changes affecting both legal and illegal immigration channels, including refugee admission reductions, travel bans affecting 19 countries, termination of Temporary Protected Status, and restrictions on international student employment options. These measures collectively threaten to create significant workforce gaps in sectors that have come to rely on immigrant labor.

Manufacturing stands to be particularly affected, as industries facing labor shortages have increasingly depended on foreign-born workers. Between 2019 and 2024, immigrant workers accounted for 84.7% of U.S. labor force growth, according to the NFAP report, highlighting their critical role in maintaining workforce stability during a period of aging domestic demographics.

Economic Growth Projections Downgraded

The study projects that current immigration policies will lower the average annual economic growth rate from 1.8% to 1.3% between fiscal years 2025 and 2035—a reduction of nearly one-third. This slowdown comes as multiple sectors report difficulty finding adequate workers., as detailed analysis

Labor economist Mark Regets of NFAP challenged the assumption that reducing immigration benefits domestic workers. “Immigrants both create demand for the goods and services produced by U.S.-born workers and work alongside them in ways that increase productivity for both groups,” he noted in the report.

Administration Position and Countervailing Views

The White House has maintained that sufficient domestic labor exists to fill any gaps, pointing to what they describe as untapped potential among American workers. “Over one in ten young adults in America are neither employed, in higher education, nor pursuing some sort of vocational training,” White House spokeswoman Abigail Jackson told Fortune, suggesting this population represents available workforce capacity., according to market developments

However, recent labor statistics appear to contradict this assessment. The Bureau of Labor Statistics household survey shows a decline of 1.1 million foreign-born workers in the first eight months of the administration, while labor force participation among U.S.-born workers aged 16 and older has slightly decreased from 61.7% to 61.6% during the same period., according to market trends

Broader Economic Implications

The economic consequences extend beyond immediate labor shortages. The Congressional Budget Office previously projected that removing 290,000 immigrants between 2026 and 2029 could drive inflation through labor scarcity. Additional sectors including agriculture, information technology, and health services all face potential disruptions.

New visa fees approaching $100,000 for H-1B applicants are expected to particularly affect technology companies like Amazon, Microsoft and Meta that heavily recruit through this program. Meanwhile, the Department of Labor has acknowledged that immigration restrictions risk creating agricultural labor shortages.

Research director Nan Wu of the American Immigration Council suggested the full impact might be even greater than current projections indicate. “Given the unprecedented scale of these actions, it’s difficult to quantify the chilling effect they may have on immigrants who might otherwise choose to move to or remain in the United States,” Wu explained, noting potential long-term damage to the U.S. talent pipeline, especially in STEM fields.

Looking Forward

As the administration continues its immigration enforcement agenda, manufacturing and technology leaders face difficult workforce planning decisions. The coming years will test whether domestic workers can fill the gaps created by restricted immigration or whether the policies will ultimately constrain economic growth across multiple sectors.

The full NFAP study provides detailed analysis of the potential economic consequences of current immigration policies and their sector-specific impacts.