Key Takeaways
- A National Bureau of Economic Research study finds that the Trump administration’s surge in deportations (Jan – Oct 2025) reduced employment for both undocumented and U.S.-born workers, with no accompanying wage gains.
- Construction, which relies heavily on immigrant labor, suffered the steepest losses: male U.S.-born workers without a college degree lost 3 % of jobs, while undocumented workers lost 7.5 %; roughly six U.S.-born jobs were lost for each immigration arrest.
- Employers responded by scaling back production rather than raising wages, leading to slower housing construction, fewer permits, and persistent labor shortages.
- Industry observers warn that the deportations exacerbate a long‑term structural shortage of skilled tradespeople, aggravating the housing affordability crisis.
- Contractors report project delays, heightened reliance on fear‑induced self‑deportation, and little interest from native‑born workers in filling the vacancies, suggesting the policy’s promised job‑creation benefits have not materialized.
The Trump administration has repeatedly argued that aggressive deportations would free up jobs and raise wages for American‑born workers. A new study from the nonpartisan National Bureau of Economic Research (NBER) challenges that claim, offering the first nationwide analysis of how the administration’s deportation surge between January and October 2025 affected the labor market. Researchers compared communities that experienced sharp rises in immigration arrests with those that did not, using federal labor data to focus on four sectors known to employ large shares of undocumented workers: agriculture, construction, manufacturing, and wholesale trade.
Across these industries, the study found a measurable chill: male undocumented workers saw a 5 % decline in employment, while male U.S.-born workers without a college degree experienced a 1.3 % drop. The effect was far more pronounced in construction, where an estimated 15 % of the workforce is undocumented. There, employment fell 3 % for native‑born male workers without a degree and 7.5 % for undocumented workers. Translating the arrest data into job losses, the researchers estimated that each immigration arrest led to roughly six U.S.-born workers losing their jobs and four undocumented workers losing theirs.
Importantly, the study uncovered no evidence that employers responded to the labor shortage by raising wages to attract domestic workers. Instead, firms chose to cut back on production. Chloe East, an economics professor at the University of Colorado Boulder and a co‑author of the study, explained that construction companies found it easier to reduce the number of new homes and buildings they undertook than to raise pay for U.S.-born workers. This pull‑back is reflected in broader market indicators: residential building permits fell 7.4 % year‑over‑year in March 2026 to 1.372 million units, and residential construction jobs slipped 1.5 % year‑over‑year in April 2026.
The findings dovetail with earlier research linking heightened immigration enforcement to slower housing construction, higher home prices, and job losses for native‑born workers. Yet the Trump administration has continued to tout the deportation policy as a job creator. In his February 2026 State of the Union address, President Trump claimed that “more Americans are working today than at any time in our country’s history,” and a White House press release earlier that year asserted that the construction industry had benefited from the removals. Contractors on the ground, however, paint a different picture.
Industry veterans describe a labor market already strained by an aging workforce and a weak pipeline of new tradespeople—a problem that began after the 2008 foreclosure crisis, when nearly two million construction workers lost their jobs. The recent deportation surge has accelerated that deficit. Adrian Avila, president of AVICA Construction and Development in Los Angeles, said older immigrant workers have begun self‑deporting out of fear of ICE raids, prompting him to delay projects despite paying what he considers competitive wages. He noted that the labor gap he anticipated filling in a few years has arrived sooner than expected.
Samantha Jones, a general contractor in South Florida, lost 14 of her 34 workers to arrests or self‑deportation last year, including 11 in a three‑week stretch in August. She observed that projects that once took two or three months now require five or six, forcing her to consider raising client prices by 15 % to cover delay‑related costs—not to increase wages. Jones emphasized that she hires migrant workers not because they are cheap but because their specialized skills in masonry and carpentry are scarce domestically; the South lacks sufficient trade schools to replace them.
Other contractors echo the struggle to find qualified replacements. In Minneapolis, Josue Alvarez of Milestone Construction reported interviewing candidates to replace a painter deported to Guatemala, noting that the departed worker had eight years of experience and a reputation for reliability. Alvarez said he has never received an application from an American‑born worker for any position, a sentiment shared by many subcontractors scrambling to fill vacancies as projects pile up. Some competitors have gone out of business, leaving a market where “pretty much everybody is on the hunt” for skilled labor.
Omri Farache, owner of Mia Remodeling Contractors in Miami, offered a more optimistic take, arguing that reduced competition from unlicensed, low‑bidding contractors could eventually benefit regulated firms like his. Even so, the prevailing sentiment among industry participants is that the deportation surge has exacerbated an existing labor shortage, slowed housing production, and failed to deliver the promised wage boosts for native‑born workers. As Chloe East warned, the construction sector may be facing a “similar long‑term shock” that will continue to reverberate through the housing market for years to come.