Immigrant Workers Are Leaving America’s Job Market, but U.S.-Born Workers Aren’t Filling the Gap

America’s labor market has been slowing, even as unemployment has remained relatively stable in recent federal data. A new concern inside that broader picture is that immigrant workers are leaving or not arriving in the same numbers, while many U.S.-born workers are not stepping into the same roles. Economists and labor data now show that the gap is becoming more visible across industries that have long depended on foreign-born labor.

Immigration has fallen sharply as the labor pool changes

January Census Bureau data showed net international migration dropping from a 2024 peak of 2.7 million people to an estimated 321,000 by mid-2026. Brookings has put the figure even lower for 2026, saying the U.S. could see negative net migration this year. That shift matters because it changes how many workers are entering the country and available for jobs that have relied on immigrant labor for years.

Mark Zandi, chief economist at Moody’s, said foreign-born unemployment fell below native-born unemployment in October 2025, based on a 12-month moving average of seasonally unadjusted data. He said the change is relatively straightforward to explain because the immigrant labor force is shrinking. At the same time, the latest unemployment rate has held at 4.1%, a sign that overall labor demand has also cooled.

The impact is showing up in jobs many employers still need to fill

Federal labor data shows foreign-born workers were more likely than native-born workers in 2025 to work in construction, trucking, natural resources, and health and personal care. The Bureau of Labor Statistics also reported that foreign-born full-time wage and salary workers earned median weekly pay equal to 85.7% of what native-born workers earned. That pay gap helps explain why replacing immigrant labor has not been simple for employers.

Zandi said many of these jobs are physically demanding, located in remote parts of the country, or tied to work that native-born workers have not done for decades. He said U.S.-born workers may take some of these jobs, but only at much higher wages. He also said those higher labor costs can make production uneconomic for some businesses, especially in labor-intensive industries.

Why the gap is not closing, and what it means next

The White House said the policy is working. Spokesman Kush Desai told Fortune that stricter border security and immigration enforcement have helped lift real wages for American workers in construction, manufacturing, transportation, and warehousing. The New York Fed reported in May that construction and mining, along with public administration, have seen wage growth, partly tied to AI data center demand and industry reliance on immigrant labor.

But the same New York Fed report found most industries have seen a synchronized decline in wage growth since 2022. Zandi said the near-term effect of reduced immigration could be stagflationary, with prices rising without a matching increase in output. He also said immigration policy may eventually have to reverse, but for now the labor market is adjusting with fewer immigrant workers and no broad replacement from U.S.-born workers.