White House pauses ICE raids on farms, hospitality firms; Businesses lower recession expectations: Labor shortage threatens economy

President Donald Trump’s administration has directed immigration officials to pause raids on farms, hotels, restaurants and meatpacking plants, after leaders of those industries warned of worker shortages caused by roundups and deportations of noncitizens.

U.S. Immigration and Customs Enforcement workplace raids in Los Angeles and other large cities have spurred nationwide protests, with lawmakers of both major parties calling on federal officials to focus more on criminal offenders rather than conducting general workplace sweeps.

Hospitality and agricultural firms, which rely heavily on immigrant workers, were among several expressing concern in recent weeks as raids and deportations ramped up. Clashes over immigration policy have also caused some property damage in places such as downtown Los Angeles.

“When our workforce is afraid, fields go unharvested, packinghouses fall behind, and market supply chains, from local grocery stores to national retailers, are affected,” Maureen McGuire, CEO of the Ventura County Farm Bureau in Southern California, said in a statement. The bureau reported that between 25% and 45% of the region’s farmworkers have stopped coming to work since large-scale ICE raids began this month.

Businesses have grown less pessimistic about the world economy’s near-term outlook, putting the chance of a 2025 global recession at less than 15% in the latest global risk survey by forecasting firm Oxford Economics. That was down from April, when respondents put the recession risk on average at more than 25%.

“Respondents perceive a significant reduction in the probability of a severe deterioration in economic prospects,” Jamie Thompson, Oxford’s head of macro scenarios, said in a statement Monday.

But forecasters said business sentiment has not fully recovered, with respondents predicting the global economy to grow at a 1.5% annual rate this year. That is 0.3 percentage points below Oxford’s baseline forecast and down a full percentage point from business leaders’ forecast in the January sentiment survey.

Oxford Economics researchers noted the latest survey was completed by leaders of 106 businesses worldwide between May 28 and June 10, before the recent flare-up in tensions between Israel and Iran. The conflict has spurred concerns among analysts about potential effects on energy prices, combined with other worries over trade tariffs. 

Demographic shifts and pandemic-related career exits have created a shortage of around 3 million in the U.S. labor force, requiring a rethinking of flexible work arrangements among other changes to keep people working, according to a new Conference Board report.

“With an aging labor force and projected population shrinkage, existing labor shortages may grow, hindering economic growth and making businesses less competitive,” the New York-based economic research group said in a report Monday. Artificial intelligence technologies may provide some relief, but other shifts may be needed after about 8.2 million left the labor force at the 2020 onset of the pandemic and many older workers made those exits permanent.

Changes might include altering immigration policies to expand certain worker visa programs while providing more paths to citizenship, though policies have recently been tightened, and repealing certain income restrictions on Social Security benefits that discourage many from staying in the workforce.

“Flexible work arrangements support workforce participation for many groups, including older workers, parents with young children, caregivers and those with disabilities,” the report said. Moves like enhanced workforce training and provision of on-site childcare facilities could also help with retention, it said.