October 23, 2025

Texas Job Growth Faces Setback Amid Immigration Crackdown

News Summary

Texas, known for its robust economy, is experiencing a downturn in job growth due to ongoing federal immigration policies. Recent analysis reveals a drop in the job growth rate from 2% to 1.2%. This decline is attributed to a reduced immigrant workforce, which has historically supported job creation in Texas. Concerns from businesses about hiring foreign-born employees have increased, impacting sectors dependent on immigrant labor. As Texas navigates these challenges, it’s crucial for stakeholders to adapt strategies to sustain economic growth.

Texas is facing a decline in job growth largely attributed to the federal immigration crackdown, according to an analysis by the Federal Reserve Bank of Dallas. The state’s annual job growth rate, traditionally around 2%, has decreased to approximately 1.2%, indicating a troubling trend for the Texas economy.

The analysis, conducted by Dallas Fed researchers, reveals that a reduced number of immigrants in the labor supply is a significant contributing factor to this decline. The report outlines that immigration inflows have slowed, which has historically enabled job growth in Texas to surpass the national average.

Around 20% of Texas businesses are expecting challenges in hiring and retaining foreign-born workers this year due to recent changes in immigration policy. The report identifies a “chilling effect,” where increased immigration enforcement has led to a lower participation rate of foreign-born individuals in the workforce, resulting in missed work or school days.

The survey data indicates that about 40% of firms have reported disruptions caused by employees missing work due to fears of immigration enforcement. Simultaneously, 60% of businesses have struggled to hire qualified candidates because of immigration status issues. Nearly 49% of companies have faced hiring difficulties due to a decrease in the number of foreign-born applicants.

The analysis utilized findings from the Federal Reserve Bank’s monthly Texas Business Outlook Surveys, which gathered responses across various sectors, including manufacturing, services, and retail. The research highlights that the landscape of immigration in Texas has significantly shifted over time; census data shows the percentage of immigrants in Texas’ labor force rose from less than 5% in 1970 to an estimated 23% by 2024. It is projected that over half a million new immigrants will join the Texas workforce between 2021 and 2024.

Foreign-born workers play a crucial role in Texas’ economy, contributing approximately $200 billion annually in personal income. They comprise around half of the workforce in sectors like landscaping, construction, and taxi services. The analysis points out that increases in border enforcement and prolonged processing times for entries into the U.S. have been significant factors behind the drop in immigration rates.

Additionally, there has been a surge in Immigration and Customs Enforcement (ICE) arrests, which has likely intensified the fear among immigrant communities. Current findings suggest that about 3% of surveyed businesses have already noted a detrimental impact from the changes in immigration policy.

The survey’s results may not fully capture the extent of the immigration policies’ effects as it did not include sectors that heavily rely on immigrant workers, such as construction and agriculture. In response to labor shortages, affected businesses are adopting various strategies, with 48% indicating plans to increase employee working hours, 38% mentioning potential wage and benefit raises, and 33% expressing intentions to hire more U.S.-born workers, naturalized citizens, and green card holders.

Despite the implications of the report, the Dallas Fed declined further commentary due to a media blackout preceding the Federal Reserve’s Open Market Committee rate-setting policy meeting.

In summary, the analysis highlights the interconnectedness of immigration policy and job growth in Texas, revealing potential concerns for the future economic landscape of the state. With a projected increase in new immigrants but current obstacles impacting their participation in the workforce, the long-term implications on Texas’ economy remain to be seen.

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Author: STAFF HERE GEORGETOWN

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