Running Out of Workers
Author: Greg Valliere
July 9, 2025
BE CAREFUL WHAT YOU WISH FOR: The White House has been demanding the deportation of immigrants, ASAP — but that may backfire as hundreds of thousands of workers flee, leaving crops rotting in the fields and hotels without enough employees.
THE LABOR MARKET HAS BEEN TIGHT for the past few years, but not like this. The epicenter is in California, where workers are scarce as they leave the state in droves.
THE SHORTAGE HAS AFFECTED FIRMS like Disney and Walmart as their workers’ temporary legal status has been revoked. This has prompted firms to hike their salaries and benefits and has led to the inevitable fear of inflation.
PRESIDENT TRUMP SAID IN IOWA last week that the Agriculture Department is working on a plan that would allow some workers to stay, but this has led to anger from conservatives who want to keep immigrants out.
THERE’S LITTLE DOUBT ON ONE POINT: illegal border crossings have plummeted to the lowest levels in decades — accompanied by the realization that the economy needs more waiters, farm labor, construction workers, etc. Try getting someone to fix your roof in California.
THIS IS A MAJOR REASON WHY FED CHAIRMAN JEROME POWELL is tentative. The economy is softening in much of the country as crops lie fallow in the fields and new tariffs loom, probably on Aug. 1. It’s a confusing climate, and confusion is not a friend of the markets.
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