When ICE raids removed hundreds of undocumented workers from Swift & Co. meatpacking plants, the company faced a crippling labor crisis. Its solution was to aggressively recruit a new, legally authorized, but equally vulnerable workforce: refugees fleeing war and persecution.

Beyond its long-term growth benefits, rational immigration policy can be a powerful short-term tool against inflation. By addressing labor shortages in critical sectors like construction, agriculture, and elder care, an increased and targeted immigrant workforce can directly reduce cost pressures on essential goods and services.

A significant stagnation in job growth since May coincides with both new tariff implementations (reducing labor demand) and stricter immigration policies (constraining labor supply). This combination has created a powerful dual shock that has effectively halted job creation in the US economy.

While tariffs affect goods prices, immigration controls are reducing the labor supply, particularly in the service sector. This creates upward wage and price pressure on services, a subtle but significant contributor to overall inflation that is difficult to isolate in real-time data.

While one-third of construction workers are non-native born, restrictive immigration policy's impact is currently muted by a cyclical decline in building. This temporary relief masks a structural labor shortage that will become a major constraint as the market recovers in 2026-2027.

Contrary to common political narratives, undocumented immigrants are often a net positive for government finances. They are heavily documented for tax purposes (e.g., Social Security) and pay into these systems but are less likely to draw benefits, effectively subsidizing programs for citizens and creating a highly profitable workforce.

The trauma of being unable to find workers during the pandemic created a lasting strategic shift. One chef kept his entire kitchen team from before COVID, recognizing the immense cost and near impossibility of replacing their accumulated expertise in the current tight labor market.

America intentionally avoided solving illegal immigration because it serves a crucial economic purpose: providing a flexible, cheap labor force that doesn't draw on social safety nets. This benefits industries and consumers while placing little burden on the state.

The US labor market is stuck in a 'low hire, low fire' mode, preventing a more robust recovery. This stagnation is not from a lack of demand but is directly attributed to the combined effects of restrictive immigration controls and the lingering impact of tariffs, which suppress hiring activity and consumer purchasing power.