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Here's how Trump's immigration crackdown will hurt the US job market

President Donald Trump signs a revised executive order for a U.S. travel ban on Monday, leaving Iraq off the list of targeted countries, at the Pentagon in Washington.
Carlos Barria | Reuters
President Donald Trump signs a revised executive order for a U.S. travel ban on Monday, leaving Iraq off the list of targeted countries, at the Pentagon in Washington.

President Donald Trump won his new job in the White House with a series of promises that included renewed economic growth and tight restrictions on immigration.

Unfortunately, though popular with millions of voters, those two campaign pledges will be hard to pull off together.

The problem: A falling birth rate and the aging baby-boom generation is slowing the growth of the job force. Without a steady influx of younger workers, the working-age population into the U.S will begin shrinking, putting a serious damper on economic growth.

The math is fairly simple: It's difficult to create new jobs without workers to fill them.

For now, the economic expansion that began after the Great Recession that ended in 2009 continues to employ more workers at a healthy clip.

American employers boosted nonfarm payrolls by 235,000 in February, pushing the jobless rate down a notch to 4.7 percent, the Bureau of Labor Statistics reported Friday.

Construction jobs led the way, growing by 58,000, and manufacturing also posted strong gains of 28,000. Earlier in the week, ADP and Moody's Analytics reported that private payrolls increased by a whopping 298,000 last month.

With the jobless rate down to levels last seen almost a decade ago, some employers are already having a hard time filling positions. As of last month, some 5.5 million jobs were unfilled, more than the peak level during the last expansion before the Great Recession.

The tight labor market is also helping to boost wages, as employers have to pay more to find and keep skilled workers. Last month, average hourly earnings increased by 2.8 percent, the BLS said.

That's good news for workers. But those unfilled jobs are bad news for companies trying to grow their businesses.

The Trump administration has promised a series of "pro-business" policies, from deregulation to tax reform. It has also begun a crackdown on unauthorized workers already in the U.S. and has proposed new restrictions on those who want to come here.

That immigration policy will make it harder to create and fill new jobs, especially in industries that rely most heavily on unauthorized workers, including farming, construction and leisure and hospitality.

Though unauthorized workers represent a relatively small share of the overall American workforce, they are the fastest-growing segment, according to a new Pew Research Center study.

Over the next two decades, as baby boomers leave the workforce they entered in droves in the 1960s, the growth of the labor force will slow to levels not seen in five decades. Among those born in the U.S., whose parents were also born in the U.S., the working-age population is expected to shrink by 8.2 million over the next two decades, according to Pew.

That drop with will be partly offset by an increase of about 13.5 million working-age adults born in the U.S. to immigrant parents.

But the most important driver of growth in the working-age population over the next two decades will be the arrival of future immigrants, according to the researchers. Without these new arrivals, the number of immigrants of working age would decline by 17.6 million by 2035, as would the total projected U.S. working-age population, which would fall to 165.6 million, they predict.

In fact, the share of undocumented workers in the labor force had already begun falling well before the Trump administration came into office. Thanks to a strong labor market in Mexico, more people have been moving from the U.S. to Mexico than from Mexico to the U.S. for years, despite Trump's insistence that immigrants are "flooding over the border" into the country.

Opponents of allowing undocumented workers to remain in the U.S. have argued that those workers are displacing U.S.-born job seekers.

While Trump has pledged to create more opportunities for those "forgotten" Americans, many of the jobs held by unauthorized workers are low paid.

Among the most common are drywall installers, farm workers, roofers and housekeepers, according to a separate Pew Reserach study.

So far, the U.S. economy has largely escaped the headwinds of a tightening labor supply and aging demographics.

But those forces are already confounding policymakers in Europe and Japan. As the countries' populations age, younger people aren't entering the labor force fast enough to replace the retiring workers. That also means there fewer younger taxpayers to cover the cost of providing retirement income and health care for older workers.

The economic drag of an aging workforce can be costly. In the developed world, the effects are most pronounced in Japan, where the government of Prime Minister Shinzo Abe has struggled for the past three years to rescue the nation from two lost decades of economic stagnation.

The three-pronged policy includes massive government spending and borrowing, coupled with a central bank eager to buy up the government's new bonds. That's left the country saddled with a debt pile that's more than twice the size of its gross domestic product.

Abe's government has also proposed reforms to domestic regulations and trade barriers that protect Japanese industries but stifle growth. The government has also tried to expand Japan's workforce by encouraging more young women to go to work with increased funding to eliminate waiting lists for government-sponsored day care, among others.

More workers would generate more wages and taxes, helping Japan care for its aging population without borrowing to pay the bill.

But the policies have had only mixed success. In the fourth quarter of last year, Japan's economy grew at an annual rate of just 1 percent.

The country's economy is expected to remain stuck at that growth rate at least through 2018, according to the latest forecast by the Organization for Economic Cooperation and Development.

(Reuters contributed.)

Watch: Immigration ban's impact on agriculture