The Domino Effect

The Domino Effect: When Immigrant Workers Disappear, Consumers Pay the Price

America is facing a labor market reckoning. The disappearance of immigrant workers is not just a political talking point—it’s a disruptive force shaking the foundation of the U.S. economy. The dominoes are falling, and at the end of the line stands the American consumer, footing a bill that keeps getting bigger.

The Missing Link in the Labor Market

Immigrant workers are the backbone of many essential industries—construction, agriculture, hospitality, healthcare, and more. When immigration slows or mass deportations occur, these industries are left scrambling to fill positions. The result? A severe labor shortage that sets off a chain reaction throughout the economy.

The Wage-Price Spiral: Competition Drives Up Costs

With fewer workers available, businesses are forced into a fierce competition for the remaining labor pool. To attract and retain employees, companies must offer higher wages and better benefits. While this might sound like a win for workers, it comes with a catch: those increased labor costs are passed directly to consumers in the form of higher prices.

“When labor is in short supply relative to demand, employers offer higher wages, which are in turn passed on to consumers, leading to rising prices. The economy can begin an endless wage-price spiral…”

This cycle—higher wages leading to higher prices, which then require even higher wages—can spiral out of control, especially in sectors heavily reliant on immigrant labor, like construction and hospitality.

Real-World Impact: From Groceries to Housing

The effects are not theoretical. During the COVID-19 pandemic, immigration plummeted, and the U.S. experienced historic inflation. Industries with the sharpest labor shortages—those most dependent on immigrants—saw the steepest wage spikes and, consequently, the highest price increases for consumers.

• Food prices:  Labor shortages in agriculture and food processing led to higher prices at the grocery store and restaurants.
• Housing:  Construction slowdowns due to a lack of workers pushed up the cost of new homes and renovations.
• Everyday services:  The price of services like housekeeping, childcare, and landscaping rose as the supply of workers shrank.

The Broader Economic Fallout

The domino effect doesn’t stop at higher prices. As businesses struggle to find labor, they may invest less, automate more, or even close their doors, reducing economic dynamism and opportunity for all workers. Meanwhile, consumers’ purchasing power erodes, and the middle class feels the squeeze.

The Bottom Line: Consumers Foot the Bill

The narrative that cutting immigration protects American jobs is dangerously simplistic. In reality, when immigrant workers disappear, the competition for those who remain drives up wages—and those costs are inevitably passed on to consumers. The end result is a more expensive America, where the average family pays the price for political decisions made far from the checkout line.

The next time you notice your grocery bill climbing or your rent going up, remember: the dominoes started falling when immigrant workers disappeared. And as long as that labor gap remains, the consumer will keep picking up the tab.