AUSTIN (Nexstar) — In 2025, job growth in Texas is at 1.2%. Nationwide, job growth is at 0.6%. Both of those numbers are the lowest they’ve been since the pandemic, and according to a report authored by three Federal Reserve Bank of Dallas employees and a University of North Florida (UNF) professor, immigration crackdown is likely a contributing factor.
“It is very clear that a lot of immigrants — and even some U.S. natives — are very worried about the crackdown that is occurring,” UNF Economics Professor and survey co-author Madeline Zavodny said. “The heavy presence of ICE in lots of cities and even some rural areas is making lots of people afraid to go to work, afraid to take their children to school, afraid to go shopping and so on.”
The report uses a mixture of economic data and findings from the Dallas Fed’s Texas Business Outlook Surveys (TBOS). The report said it may underestimate the impact on Texas businesses, because TBOS only tracks the manufacturing, service and retail sectors — leaving out the immigrant-heavy sectors of construction and agriculture.
One of the largest impacts on businesses this year has been their ability to retain workers, according to the Dallas Fed. In their July survey, a majority of executives in the manufacturing, services and retail spaces all reported having a worsened ability to retain workers over the past three months, a sharp decline from just six months prior.
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The impact isn’t just limited to the workforce.
“Immigrants are consumers as well,” Zavodny noted. “[We’re] seeing a drop in labor demand, ultimately, that’s just as concerning as the drip in labor supply. If people aren’t spending money, then employers don’t need as many workers and they’re not going to sell as many goods.”
‘Americans care a lot that we change immigration policy’
A separate University of Houston/Texas Southern University poll showed 51% of Texans support President Donald Trump’s immigration policies, with 80% support from those who voted for him.
“I think it was pretty clear from the last election that Americans care a lot that we change immigration policy,” Zavodny said.
On the other hand, 47% of Texans believe his immigration policies are making the economy weaker, while only 41% believe they’re making it stronger.
“Overall, Texans have a nuanced view on the Trump administration’s immigration policy,” Rice University Political Science Professor and co-author of the UH/TSU poll Mark P. Jones, said. “A plurality think that it has reduced the amount of crime in Texas, but a plurality also think that it has weakened or reduced the Texas economy.”
In the TBOS, anonymous executives gave comments on Trump’s immigration enforcement.
“We are very concerned over employees that have worked for 10, 12, 15 years that may or may not be subject to deportation,” a furniture manufacturing executive wrote.
“We were required to fire over 40 employees that had been with the company for over 20 years or face severe penalties,” a wood product manufacturing executive wrote. “The law and reality are in direct conflict. The government punishes the wrong people.”
In addition to cracking down on those who entered the country illegally, the Trump administration has also removed temporary protective status for millions of immigrants who were legally able to work.
“For the past few years most of the growth in our labor force and in our population [was] coming from immigrants who had some form of legal right to be in the United States and a legal right to work,” Zavodny said. “These are being rapidly revoked by the Trump administration, and I think that leaves employers in a bind.”
Some of those employers are represented by the Texas Restaurant Association (TRA), who joined onto the ‘Seat the Table’ movement with other hospitality leaders and American Business Immigration Coalition Action.
“Labor shortages, rising costs, and softening consumer traffic are creating significant challenges for Texas restaurants. Increased immigration enforcement activity is exacerbating all three of these pressure points for the industry,” TRA Chief Public Affairs Officer Kelsey Erickson Streufert, said in a statement. “To address these challenges, the Texas Restaurant Association is partnering with the American Business Immigration Coalition Action and hospitality leaders from all 50 states in Seat the Table, a national campaign urging the federal government to create work permits for long-term, trusted immigrants who are essential to our food system.”
‘All businesses want is reliability’
The report noted that immigration enforcement is just one piece of a complicated economic puzzle — another key piece being uncertainty over tariffs.
“Broadly speaking, Texas’s growth model relies on people moving here… whether that’s coming from other states or other countries,” Angelou Economics Executive Vice President Matt Patton, said. “The Federal Reserve piece also cites things like tariffs [and] interest rates. It’s a combination of all of those policies and then macro-level economic pieces in motion together.”
The lack of clarity on these issues, with many tariffs constantly changing and being announced through various channels of communication, limits how far out businesses can plan.
“All businesses want is reliability,” Patton said. “It’s just an unknown now to look at long-term planning, everything becomes much more short-term. How do we go day-to-day?”
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