What Happened?
A slowing U.S. labor force could increase pressure to finance Social Security and Medicare over the long term, according to a new report from the Congressional Research Service (CRS). The CRS published its findings in a report titled "A Slowdown in U.S. Labor Supply Growth."
Two forces are driving the slowdown: an aging population and falling immigration. After a technical adjustment to the underlying data, the 12-month labor force growth rate fell from 0.5 percent in January to 0.2 percent in September.
Net international migration is projected to fall from 2.7 million people in 2024 to 1.3 million in 2025. An earlier projection put 2026 net migration at 321,000, though the CRS cautions that figure does not fully reflect subsequent immigration policy changes.
Why Does it Matter to Me?
The Congressional Budget Office projects that potential economic output growth over the next decade will run 1.2 percentage points below its 1950–2025 average, largely because projected annual potential labor force growth will be one percentage point lower.
Foreign-born workers made up 19.1 percent of the U.S. labor force in 2025, and they generally participate at higher rates than native-born workers.
Federal Reserve research cited in the CRS report estimates that the number of new jobs needed each month to hold unemployment steady fell from about 155,000 in 2023–2024 to 85,000 in 2025, and to fewer than 10,000 in 2026. A month of modest job gains may no longer signal a strong economy; it may simply reflect fewer people available to hire.
Both Sides, Now
Congress and the Trump administration face intersecting choices on immigration levels, workforce training and entitlement programs, each of which can affect labor force participation. The report cites research suggesting that recent immigration enforcement policies may have discouraged some workers from joining the labor market.
Reuters reported in June 2025 that raids and fear of enforcement left crops at risk of going unharvested, with one farmer saying "70% of the workers are gone." Preliminary Census Bureau data showed more than 1.2 million immigrants had left the U.S. labor force between January and the end of July 2025, according to KVPR, though that figure alone does not establish enforcement as the cause.
What Happens Next?
The labor supply trajectory described in the CRS report will inform the economic assumptions behind upcoming federal budget and spending decisions, though the report does not identify fiscal 2027 as a deadline.
Social Security and Medicare trustees' annual reports will provide another opportunity to assess how demographic and workforce trends affect the programs' financing.
---
AllCiv makes it easy to stay politically informed and involved.
---
Spot something wrong? Report an issue with this article