Treasury Secretary Scott Bessent is making a sweeping economic case for President Donald Trump’s immigration crackdown. He argues that fewer unauthorized workers are competing in the U.S. labor market, creating more opportunities for American workers and strengthening employers’ incentive to raise wages.
The argument arrives at a politically important moment. Inflation-adjusted hourly earnings jumped in June, but hiring slowed, labor-force participation weakened, and government data still do not establish that deportations caused the improvement in workers’ purchasing power.
To understand what is happening, we must separate the administration’s political message from the measurable changes in employment, wages, inflation and labor supply.
Scott Bessent Says Trump Immigration Policies Are Returning Jobs to Americans
During an interview with Fox News host Jesse Watters, Bessent said the administration had stopped what he described as “mass unfettered immigration.” He cited approximately 1.82 million voluntary and mandatory departures and argued that the reduction was redirecting employment opportunities toward American workers.
Bessent also predicted that sustained real wage gains would return as private employers continued hiring. He emphasized that private-sector jobs matter more for long-term wage growth than government employment, arguing that productive businesses generate the income gains that households can maintain over time.
The administration’s argument follows a straightforward economic theory. When the supply of available workers declines, employers may have to compete harder for labor. That competition can lead to higher wages, better benefits, additional training and improved working conditions.
However, the actual outcome depends on several factors. Employers can raise wages, automate work, reduce production, move operations, increase prices or leave positions unfilled. A smaller workforce does not automatically translate into better jobs for every American.
The 1.82 Million Deportation Figure Requires Important Context
Bessent’s figure combines voluntary departures with mandatory deportations. Those categories should not be treated as identical.
A formal removal generally involves a government order and an official deportation process. A voluntary departure or self-deportation may involve a person leaving without being physically removed by immigration officers. Because these categories are measured differently, a combined total does not reveal how many people were deported through formal enforcement actions.
The Department of Homeland Security said in January 2026 that nearly 3 million undocumented immigrants had left the United States during Trump’s first year back in office. That administration estimate included people DHS believed had departed voluntarily, making it broader than the number of removals directly carried out by immigration authorities.
We should therefore describe the 1.82 million figure as an administration estimate of voluntary and mandatory departures, not as a verified count of formal deportations.
That distinction matters because we cannot accurately measure the labor-market effect without knowing who left, where they worked, whether they held jobs, how quickly employers replaced them and whether their positions remained in the United States.
June Jobs Report Shows Growth, but the Labor Market Is Cooling
The June 2026 employment report offers some evidence that private hiring remains active. It does not show a broad hiring boom.
U.S. employers added 57,000 nonfarm payroll jobs in June, and the unemployment rate remained at 4.2%. The number of unemployed Americans stood at approximately 7.1 million. Payroll growth was close to the average monthly increase of 36,000 recorded during the previous year.
Professional and business services recorded the strongest major increase. Social assistance and health care also added jobs, reflecting continued demand for care workers, family service employees, hospital staff, and professional support roles.
Leisure and hospitality moved in the opposite direction, losing 61,000 jobs because seasonal hiring was weaker than expected. Construction, manufacturing, retail trade, transportation, financial services and government employment showed little change.
These figures complicate the claim that immigration enforcement has produced an immediate return of jobs across the economy. The June report shows modest growth concentrated in a few service industries rather than a widespread surge in employment.
The labor force participation rate also declined by 0.3 percentage points to 61.5%. The employment-to-population ratio slipped to 59%. Approximately 6 million people outside the labor force said they wanted a job, but they were not counted as unemployed because they were not actively searching or were unavailable to begin working.
A genuinely stronger labor market would ideally combine rising payrolls, higher participation, increasing hours and sustained real wage growth. June delivered progress on wages, but the broader picture remained mixed.
Real Wages Jumped in June as Consumer Prices Fell
Bessent’s wage argument received support from the June real earnings report.
Average hourly earnings for private-sector employees rose 0.3% in June to $37.64. Pay for production and nonsupervisory workers increased 0.2% to $32.38 an hour.
The more significant change came from inflation. Consumer prices declined 0.4% in June, resulting in a 0.8% monthly increase in real average hourly earnings. In practical terms, workers’ wages gained purchasing power because prices fell while nominal pay continued to rise.
The monthly improvement was substantial, but the annual comparison was less impressive. Real average hourly earnings remained 0.1% lower in June 2026 than in June 2025. The June gain therefore represented a rebound from recent weakness rather than proof of a fully restored period of sustained wage growth.
Inflation also remained noticeable in household budgets. Consumer prices were 3.5% higher than a year earlier. Food prices increased by 3%, shelter rose by 3.3%, and energy costs were up by 15.7%, despite a sharp monthly decline in gasoline prices.
We can say with confidence that real wages rebounded in June. We cannot yet say American workers have secured a lasting improvement in living standards.
Immigration Enforcement May Tighten Labor Supply
Bessent’s argument is strongest in industries where employers have depended heavily on unauthorized labor.
Construction, agriculture, food processing, landscaping, hospitality, cleaning services and parts of manufacturing can experience labor shortages when immigration declines. Businesses facing fewer applicants may raise starting pay, offer bonuses, improve schedules or recruit workers who previously avoided those jobs.
Some American workers could benefit, particularly people without college degrees who compete in labor-intensive occupations. Greater bargaining power may allow them to demand higher pay or move into positions that employers previously filled through a larger pool of lower-cost labor.
The Congressional Budget Office has said that immigration can place modest downward pressure on average hourly compensation in the short term, partly because many new arrivals initially earn below-average wages. CBO estimated that the recent immigration surge slightly reduced wage growth for people already living in the United States through 2026, before productivity gains produced more positive effects later.
That analysis provides some support for the administration’s position that a rapid increase in labor supply can weaken wage growth for certain workers. It does not show that mass deportation will produce large, immediate wage gains throughout the economy.
Immigrants often possess skills that complement rather than replace those of native-born workers. They also rent homes, buy groceries, use transportation and purchase services, creating demand that supports other jobs.
Native-Born Employment Data Do Not Yet Confirm a Job Transfer
The most direct test of Bessent’s claim would be a clear rise in employment among native-born Americans as foreign-born employment declined.
June’s unadjusted year-over-year data do not show that pattern.
The number of employed foreign-born people declined from approximately 31.23 million in June 2025 to 30.73 million in June 2026. That was a decrease of roughly 506,000.
However, native-born employment also declined. The number of employed native-born people fell from about 132.65 million to 132 million, a decrease of approximately 655,000. Native-born unemployment increased from 6.12 million to 6.33 million, and the native-born unemployment rate rose from 4.4% to 4.6%.
These numbers do not prove that Americans failed to gain specific jobs vacated by departing immigrants. Monthly surveys cannot track each position or determine whether one worker directly replaced another.
They do show why we should avoid claiming that the national data have already confirmed a large-scale transfer of jobs to American workers. Employment fell for both foreign-born and native-born groups in the year-over-year comparison.
The Bureau of Labor Statistics also warns that its foreign-born category includes naturalized U.S. citizens, legal permanent residents, temporary visa holders and undocumented immigrants. The survey does not identify a respondent’s legal immigration status.
A decline in foreign-born employment cannot automatically be described as a decline in unauthorized employment.
Fewer Immigrant Workers Can Also Slow Job Creation
Removing workers can create openings, but it can also cause some positions to disappear.
Research published by the Federal Reserve Bank of San Francisco in February 2026 found that unauthorized immigration flows were nearly one-for-one with local employment growth. Areas experiencing larger declines in immigration also experienced weaker employment growth, particularly in construction, manufacturing, and other service industries.
The researchers concluded that reductions in unauthorized immigrant labor could place continued downward pressure on total U.S. job growth. They also found little evidence of broad crowding out, as additional workers expanded employment and local consumer demand roughly simultaneously.
Construction offers a clear example. A developer may hire an American worker after an immigrant employee leaves. However, if labor shortages raise the cost of building homes, the developer may cancel projects, purchase more prefabricated materials or build fewer properties.
The first outcome creates a replacement job. The second reduces total employment.
The long-term result depends on how employers respond and how quickly American workers can be recruited, trained and relocated.
America’s Aging Workforce Adds Another Economic Pressure
The debate is also unfolding as the native-born working-age population grows more slowly.
Federal Reserve researchers estimated that the native-born working-age population declined by roughly 740,000 between 2024 and 2025. They warned that lower immigration combined with an aging population could shrink the future labor supply, reduce the number of consumers and limit the economy’s ability to expand.
The Census Bureau projected that net international migration could fall to approximately 321,000 in 2026, down from 2.7 million in 2024 and 1.3 million in 2025.
A smaller labor supply may strengthen wages in certain occupations, but it can also create shortages in nursing, home care, construction, farming, engineering and other fields where demand remains strong.
This is why immigration policy cannot be judged solely by counting how many workers leave. We must also measure production, business formation, housing construction, consumer demand, productivity and the country’s ability to support an aging population.
Private-Sector Hiring Will Determine Whether Wage Gains Last
Bessent is correct that sustainable wage growth ultimately depends on productive private-sector activity.
The government can temporarily increase employment through public hiring, but long-term improvements in household income require businesses to invest, expand and produce more value per worker. Higher productivity gives employers room to raise wages without passing every additional labor cost to customers.
June’s data offered several encouraging signs. Private hourly pay increased, professional services added jobs and inflation declined during the month. Personal income also increased by 0.7% in May, partly due to higher private wages and salaries.
However, businesses will need more than a smaller immigrant labor supply to generate a durable wage boom. They need stable energy prices, affordable credit, predictable trade policy, skilled employees, stronger productivity and enough consumer demand to justify expansion.
Without those conditions, labor shortages can produce inflation rather than prosperity. Employers may raise prices to cover higher payroll costs, leaving workers with larger paychecks but little improvement in purchasing power.
