California Growth Stalls as Foreign-Born Population Plummets

California Growth Stalls as Foreign-Born Population Plummets

2026-01-28 economy

Sacramento, Thursday, 29 January 2026.
New Census data reveals the U.S. foreign-born population fell by 1.5 million in early 2025, halting California’s growth and signaling critical labor shortages for the state’s economy.

Demographic Contraction Hits the Golden State

The demographic landscape of the United States shifted dramatically in the first half of 2025, with data released by the U.S. Census Bureau in late January 2026 revealing a contraction of 1.5 million in the foreign-born population between January and July [1]. This steep decline, attributed by experts to intensified deportation efforts and immigration raids during the first year of the new Trump administration, has effectively stalled population growth in California [1]. For a state that has historically relied on international arrivals to offset domestic out-migration, the sudden constriction of this pipeline presents immediate structural challenges. While the U.S. population managed a modest growth of 0.5% overall, California was one of only five states to experience a population decline, shedding 9,465 residents between July 2024 and July 2025 [2][3].

Structural Economic Risks and Political Fallout

The economic implications of this stagnation are severe, particularly regarding the labor market. Jan Brueckner, an emeritus professor of economics at UC Irvine, warns that this trend directly threatens the workforce, noting that population growth is inextricably linked to labor force growth [1]. As the flow of workers tightens, industries reliant on unskilled labor are likely to face significant shortages, increasing operational costs and potentially stifling output [1]. This labor pinch is occurring against a backdrop of declining birth rates, which hit a record low in fiscal year 2025, and an aging population, further compounding the workforce deficit [5].

The slowdown in California is symptomatic of a broader national deceleration driven by the sharp reduction in international arrivals. Nationally, net international migration fell from a peak of 2.7 million in 2024 to 1.3 million in 2025 [1]. This represents a year-over-year decline of approximately -51.852%. The Census Bureau’s 2025 vintage estimates confirm that this “historic decline” was the primary driver behind the sluggish national growth rate of 0.5%, the slowest since 2021 [3][6]. While the Census Bureau has adjusted its methodologies to better account for humanitarian migrants and emigration, the trajectory is unmistakably downward [7].

Sources


Labor Market Demographics