The Plan Was to Help American Workers. It Backfired.

We all want more jobs, not less, especially with all the concern about AI taking jobs. This one hurts because we're shooting ourselves in the foot. The 2025 BLS government data is now in, and it confirms what economists warned: cutting immigration hurt U.S.-born workers.

After the foreign-born workforce dropped by 881,000 workers since January 2025, the U.S.-born unemployment rate increased from 3.7% to 4.1% (an 11% increase). At the same time, labor force participation among U.S.-born workers fell from 61.4% to 61.2%. Fewer Americans were working, and fewer were even looking for work.

Fewer immigrant workers did not translate into more opportunity for Americans. The opposite happened.

@K9Texan here is the thread ...

Source: Forbes: The U.S.-Born Unemployment Rate Rose After Trump Reduced Immigration

According to Stephen Miller and other Trump officials, deporting foreign-born workers and restricting legal immigration would benefit U.S. workers.

Miller’s theory, based largely on what economists call the “lump of labor fallacy” or the belief that an economy holds only a fixed number of jobs, has hit head-on with reality. Reducing the labor supply has not benefited U.S. workers.

“There is no evidence that U.S.-born workers have benefited from the decline in foreign-born workers,” according to the NFAP analysis. “The unemployment rate for U.S.-born workers was 4.1% in December 2025 compared to 3.7% in December 2024.” That represents an 11% increase over a 12-month period.

“The unemployment and labor force participation rates show fewer of the U.S.-born being able to find jobs and fewer even bothering to look,” said labor economist Mark Regets, an NFAP senior fellow, in an interview.

Several factors explain why the decline in foreign-born labor did not create an economic boon for U.S. workers in 2025 and will be unlikely to do so in the future. First, when business owners and potential entrepreneurs find an insufficient number of workers, they scale back or abandon plans to invest or expand, which can lead to fewer jobs for U.S. workers. Second, immigrants create jobs through their consumer spending on food, housing and other items. Third, immigrants foster job creation by starting new businesses, and their availability in the labor market may encourage businesses to keep work in the United States rather than outsourcing overseas.

According to Regets, “Immigrants help exports, create jobs as consumers, fill niches in the labor market and produce dynamism for the U.S. economy that wouldn’t be there.”

Economists, backed by decades of data, note that it is incorrect to assume fewer immigrants are necessary to create more opportunity for U.S. workers or that increasing immigration or growing the labor supply in other ways will mean fewer jobs for Americans. “The amount of economic activity in the United States is not fixed,” said Mark Regets. “Otherwise, when soldiers came back from World War II, we would have had mass unemployment rather than an economic expansion.”

 

The "lump of labor fallacy" is actually a very common misconception. It's very sensible to think that less immigration means more jobs for Americans, but that's not true. We've had decades of data on this, but 2025 actually provided a pretty good test case for this fallacy. In economics, nothing is ever straightforward because there are always so many factors that impact the economy, but 2025 was as close to a government-made experiment as you can get, with the government, through its policies, effectively reducing the foreign-born workforce by almost 1 million within one year.

 

That plan is working.

 

He has talked extensively in the past about "policies" that were supposed to help working-class and lower-income Americans, but many of those proposals never materialized, with many stalling, being abandoned, or never becoming real policy (weekly infrastructure plans, healthcare proposals, etc.). Part of that is because some of his policies are unrealistic or unlawful. But we’ll continue to wait and see.

In the meantime, you might want to check this out. It will have a dramatic impact on the poor and middle-class American.

 

The 30-year mortgage rate dipped below 6% yesterday, with the national average now around 6.2%. That dip followed Trump’s announcement to have Fannie Mae and Freddie Mac purchase $200 billion in mortgage-backed securities. Rates have been gradually declining after staying elevated for much of the past year, influenced by inflation, Treasury market, broader economic conditions, and the Federal Reserve’s three rate cuts.

Even so, rates remain well above sub-2% pre-pandemic levels and do little to improve affordability. Housing remains expensive due to limited supply, weak new construction, and large investors buying up a sizable share of homes.

Trump campaigned on "cutting the cost of a new home in half" and lowering housing costs “on day one.” The plan for that, it seems, is still pending... perhaps arriving any day now.

 

I think this is you projecting. I never hope bad things for Americans.