Trump’s Crackdown Slashes Immigrant Employment by 80%, Reshapes Labor Market: Goldman
A significant transformation in the U.S. labor market has occurred due to strict immigration policies during President Donald Trump’s second term. According to an analysis by Goldman Sachs released on February 16, net immigration to the U.S. has fallen by 80%. This decline is primarily the result of increased deportations and new visa bans.
Impact of Trump’s Crackdown on Immigrant Employment
The Goldman Sachs report underscores that the contraction in foreign-born worker inflow is reshaping labor supply dynamics. Historically, net immigration averaged around 1 million annually in the 2010s. Projections now indicate that this number could drop to 500,000 in 2025 and further to only 200,000 by 2026. This drastic reduction directly correlates with more aggressive immigration policies.
Key Factors Influencing Immigration Decline
- Increased deportations of undocumented immigrants
- A pause on immigrant visa processing affecting 75 countries
- Expanded travel bans limiting entry
These policies are expected to significantly reduce the inflow of both temporary visa holders and green card recipients. The loss of Temporary Protected Status for certain immigrant groups also poses considerable risks to labor supply.
Recalibrating Economic Benchmarks
As immigration declines, the U.S. economy’s requirements are shifting. Goldman Sachs estimates the break-even job growth rate will fall from 70,000 jobs per month to 50,000 by the end of 2026. This adjustment means that even modest job creation may be enough to maintain current unemployment levels.
Job Market Stability Indicators
Analysts suggest that a small increase in job openings could indicate stability even if previous years’ metrics would have suggested sluggishness. Nevertheless, this scarcity of workers raises concerns among economists about potential long-term labor market impacts.
Emerging Economic Risks
Goldman Sachs also highlights potential shifts in the labor market due to heightened enforcement of immigration laws. It appears that more immigrant workers may now be moving into the shadow economy, which challenges federal data accuracy regarding employment levels. Such trends complicate the Federal Reserve’s assessments of economic health, especially as official unemployment figures stabilize around 4.3%.
Continued Economic Uncertainty
A notable decline in tech employment has been observed, although this sector constitutes a small portion of overall payrolls. Job openings have fallen below pre-pandemic levels, currently around 7 million. Goldman Sachs’ chief economist Jan Hatzius anticipates a moderate 20% chance of recession within the next year.
While the labor market is expected to stabilize with a slight rise in unemployment predicted to reach 4.5%, analysts caution that risks remain tilted toward unfavorable outcomes. These uncertainties are exacerbated by weak labor demand and the rapid advancement of artificial intelligence.
