America's Next Economic Problem: Too Few People, Too Little Movement

By Olivia Hart

Net international migration to the United States is expected to fall to 321,000 in 2026, down from 2.7 million in 2024 — a drop of roughly 88% in two years, according to Census Bureau figures. That collapse, layered on top of falling birth rates and retiring baby boomers, is the quiet force reshaping the American economy.

The country is not emptying out overnight. The Congressional Budget Office projects the US population will keep growing until it peaks at 364 million in 2056, then begin to decline. But the topline number hides a harder question: whether enough working-age people will live in the places that need them to power growth.

How big is the demographic squeeze?

The fertility rate crested in 2007 and shows no sign of recovering, per the source's account of Census and survey data. The babies not born years ago are now missing from the adult labor force. Immigration, historically the country's main buffer against an aging workforce, is shrinking fast: net international migration was 2.7 million in 2024, fell to 1.3 million in 2025, and is projected at 321,000 in 2026.

"Immigration is usually about half our job growth," says Pia Orrenius, a labor economist at the Federal Reserve Bank of Dallas. Fewer arrivals mean harder hiring, lower output, slower growth and weaker demand — because immigrants are consumers as well as workers.

The pain will not be evenly spread. Orrenius points to Texas, which is in the midst of a manufacturing boom and building out data centers. Stagnant regions "are not really going to feel it as much," she says. Texas, by contrast, grows fast and "depends on immigrants and migrants from other states to fuel that growth." The caveat: the slowdown shows up first where growth is strongest, not in the national head count.

The Trump administration is accelerating the shift. Beyond mass deportations and the border crackdown, the White House has revoked thousands of student and worker visas and ended protections for hundreds of thousands of people from countries including Venezuela and Haiti. Whether a white-collar tech engineer or a blue-collar roofer, non-natives across the economic spectrum are less welcome.

Immigrants do not simply take jobs from US-born workers, the analysis notes. The two groups often do different, complementary work — and immigrants buy groceries, rent apartments and start businesses that feed local economies.

What is happening to tourism?

International visitors are staying away. Leigh Barnes, North America president of Intrepid Travel, reports:

• A 67% decline in Canadians traveling to the US from 2025 to 2026
• A 30% decline in inbound visitors from Australia and New Zealand
• A 24% decrease from Europe, the Middle East and Africa

He attributes the drops to a mix of politics and economics. Canadians have had a "visceral" response to Trump's stance toward their country, while Australian and British visitors are more deterred by financial pressures at home and rising US costs. Once tourists arrive, they find "everyone's bloody lovely," Barnes says — the problem is fear of the crossing itself. "It's that trepidation and concern coming into the border." Cities and attractions dependent on foreign visitors will take the hit; places that never drew many will not notice.

Who wins and who loses?

Americans are also moving less than they once did, says William Frey, a demographer and senior fellow at Brookings Metro. "People are just a little less footloose," he says. That immobility means more rural areas emptying out, unable to offer the jobs and amenities of populated regions.

Aging compounds everything. "That's probably a bigger, broader concern," Frey says. Boomers are exiting the workforce without enough young workers to backfill jobs — or replace their tax dollars — while the country's labor needs shift toward caring for older people.

For workers entering the labor market around 2040, the math flips. Steven Ruggles, a regents professor of history at the University of Minnesota, expects a "pretty darn good" labor market: scarcer workers gain leverage, stronger prospects and higher pay. He draws the contrast with the boomers themselves — when they flooded in, "the labor unions disintegrated" because "workers were a dime a dozen." The flip side: employers will squeeze more from each hire. "If there's a shortage of workers, you expect there to be a lot of incentive for companies to adopt labor-saving devices like AI," Ruggles says.

Is any of this permanent?

Probably not all of it. Immigration swings have reversed before — the Biden-era surge ended just as the Trump-era squeeze eventually will. Policies on green cards, student visas and enforcement will likely change with the political winds, and tourism may bounce back. Low birth rates and an aging population, the source notes, are far less likely to reverse.

The open question is whether the US adjusts to an older, less mobile population before the demographic bill comes due in the 2040s labor market.