The Numbers Come First
Net international migration into the United States collapsed from a peak of 2.7 million people in 2024 to an estimated 321,000 by mid-2026, according to January data from the Census Bureau. Brookings puts the figure even lower, suggesting the U.S. could see negative net migration this year. The overall unemployment rate has held steady at 4.1% in the latest data — but beneath that headline number, the labor market is splitting.
Mark Zandi, chief economist at Moody's, told Fortune that on a 12-month moving average of seasonally unadjusted data, foreign-born unemployment fell below native-born unemployment in October 2025. The explanation for the foreign-born side is straightforward: the immigrant labor force is shrinking because of White House policy, so the unemployment rate for that cohort has dropped mechanically. The native-born side is more complicated.
A Structural Mismatch, Not Just a Demand Story
Zandi identifies two forces pushing native-born unemployment higher. First, overall demand for labor has fallen; because U.S.-born workers now make up a larger share of the labor force, they absorb a larger share of that demand shortfall. Second — and more structurally — the jobs vacated by immigrant workers are not being filled by native-born Americans.
The Bureau of Labor Statistics reported in 2025 that foreign-born workers were more likely than native-born workers to be employed in construction, trucking, natural resources, and health and personal care. The BLS also noted that the median weekly earnings of foreign-born, full-time wage and salary workers equal 85.7% of what their native-born counterparts earn.
Zandi was direct: 'Native-born workers would take them, but it would require much, much higher wages … [and that] would make it uneconomic for the businesses to actually produce whatever it is they're doing.' He added that many of these positions are located in remote areas where housing and basic services are limited, compounding the reluctance.
What the White House Says
Spokesman Kush Desai told Fortune the administration's position is unambiguous: 'Unchecked illegal immigration had long depressed wages for American workers. Thanks to President Trump's commonsense border security and immigration enforcement agenda, real wages for American workers in key sectors, including construction, manufacturing, transportation, and warehousing, are growing by leaps and bounds compared to overall wage growth.'
Data from the New York Fed partially supports that claim. The regional bank reported in May that public administration and the construction and mining industries have seen wage growth, driven either by AI data-center construction demand or by D.C. policy, given that the construction industry tends to rely on immigrant workers. However, the New York Fed report found that most industries have experienced a synchronized slowdown in wage growth.
The Editorial Read
The data here is a genuine stress test for any labor-market theory, left or right. Free-enterprise readers should focus on what Zandi's analysis actually reveals: labor markets price scarcity, and when a supply of workers willing to accept certain wages disappears, the cost of production rises — or the production stops. That is not a progressive talking point; it is basic price theory.
The harder question for policymakers is whether the goal was always higher wages in targeted sectors — in which case selective evidence supports progress — or whether it was a broad uplift for the native-born workforce. The BLS and New York Fed data suggest the answer is sector-specific at best. Capital rewards clear rules, and right now the rules are producing uneven results that businesses in construction, agriculture, and logistics are already pricing into their outlooks.
