there has been a labor shortage ever since wages were driven down
Has there been a labor shortage ever since wages were driven down by immigration?
No. There has not been a continuous labor shortage ever since immigration put downward pressure on some wages. Labor-market tightness comes and goes with the business cycle, demographics, and policy; immigration increases labor
supply, which tends to ease shortages even as it can restrain wages for competing workers.
The two parts of the question pull in opposite directions economically. Extra workers (immigrants) expand the labor force. That should fill vacancies and moderate wage growth, not create a permanent shortage. Recurring employer claims of “shortages” often reflect a preference for wages below what would attract enough native-born workers.
Wage effects of immigration are modest and concentrated
The National Academies of Sciences 2017 review concluded that immigration’s overall effect on native-born wages is very small; any negative effects fall mainly on earlier immigrants and U.S.-born high-school dropouts.
George Borjas and co-authors find larger substitution effects: a 10% increase in workers in a given skill group reduces wages of similar natives by roughly 3–4%. Because many immigrants have low education, this hits high-school dropouts and prior immigrants hardest. CIS analyses of 2012–2022 data show faster real wage growth for less-educated U.S.-born workers during the lower-immigration years 2016–2019 than in higher-immigration periods before and after.
Other work emphasizes complementarity. Recent national-level estimates covering 2000–2023 (Caiumi and Peri) find that immigration, given its skill mix and occupational upgrading by natives, raised wages of less-educated natives by about 1.7–3.4% over that period, with little or no crowding-out of native employment. Short-run local effects can look different from long-run national ones after capital adjusts and firms expand.
The literature is not unanimous. Low-skilled immigration does put downward pressure on wages of the closest substitutes. The size of that pressure is debated and is smaller than popular claims of wholesale wage collapse.
Labor shortages have been episodic, not permanent
U.S. unemployment and job-openings data show no unbroken shortage stretching back decades. Pre-COVID, the late-2010s labor market was tight (unemployment near 3.5%, openings around 7 million). The 2021–2022 post-COVID period was unusually tight: openings peaked near 12 million while unemployment stayed low. Many sectors that employ large numbers of immigrants (hospitality, construction, agriculture, some manufacturing) reported acute shortages then.
The 2021–2024 immigration surge helped fill those openings, raised measured job growth, and cooled wage growth in immigrant-heavy industries—exactly what extra labor supply should do. Federal Reserve analyses from Dallas and Kansas City document this cooling effect. By mid-2026, openings had fallen to roughly 7.4 million, unemployment was about 4.1%, and the openings-to-unemployed ratio hovered near 1. That is a normal-to-moderately-tight market, not a chronic shortage.
Agriculture and construction have claimed shortages for decades whenever enforcement rises or inflows slow. Employers in those sectors often respond by raising wages modestly or shifting practices rather than facing empty fields or job sites indefinitely. When immigration enforcement increased in some periods, native employment and wages in those sectors did not automatically surge; adjustment takes time and depends on wages offered.
Why the “shortage after wage suppression” story does not hold
If immigration had driven wages so low that natives left those jobs, the logical result would be
more vacancies until wages rose enough to draw people back. Instead, high-immigration periods have generally been associated with
fewer vacancies and slower wage growth in the affected occupations. The opposite pattern—tight markets and faster low-skill wage growth—appeared during lower-inflow windows such as 2016–2019 and parts of the post-Great Recession years.
Demographics matter independently: slowing native labor-force growth (aging, lower participation) creates tightness that immigration can offset. That is a labor-
supply issue, not proof that prior wage suppression created a permanent shortage. Technology, trade, and education trends also shape low-skill wages.
In short, immigration has modestly restrained wages for some competing low-skilled natives in certain periods. It has not produced a labor shortage that has lasted “ever since.” Markets have tightened and loosened for the usual reasons; extra immigrant labor has more often filled jobs than created unfilled ones.
Has there been a labor shortage ever since wages were driven down my immigration?
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