Donald Trump has vowed to start the mass deportation of millions of undocumented migrants as soon as he takes office as United States president on January 20.
While Trump has provided little detail on his plans for a major immigration crackdown, economic research suggests it would come at a high cost. The deportation of masses of workers would curb production and tax revenues, hitting key industries, state economies and overall growth, the research shows.
Trump issued a series of executive actions, including those aimed at cracking down on legal and illegal immigration and ramping up deportations on Monday.
The Peterson Institute for International Economics estimates the US economy could shrink 1.2% by 2028 if the government deports 1.3 million people, which it considers to be at the “low-end” of the deportation goal. Gross domestic product could fall by a whopping 7.4% over that timeframe if it deports all 8.3 million undocumented immigrants that work in the US, it added.
Here is all you need to know about the economic impact in numbers:
How many workers
Out of the estimated 11 million undocumented immigrants living in the United States in 2022, 8.3 million were part of the workforce that year, according to the Pew Research Center.
While undocumented immigrants only represent a small share of the US labour force – namely 4.8% in 2022 – almost 90% are aged 16 and 64 and have a high participation in the workforce.
Analysis on past mass deportation operations show that US-born workers are also affected by the loss of undocumented workers due to a decline in production and business investment.
A study published in the Journal of Labor Economics found that “Secure Communities” – an immigration policy that resulted in the deportation of over 400,000 people between 2010 and 2015 – led to a decline of 2.5% in the employment rates of US-born workers.
Trump’s mass deportation plan would have the biggest impact on California, Texas and Florida, where one in every 20 residents are undocumented immigrants and therefore could be deported, according to estimates by the American Immigration Council.
What industries will be affected?
The employment of undocumented immigrants sustains multiple industries, such as manufacturing and agriculture, and they represent a large share of construction workers from plasterers and drywall installers to ceiling tilers and roofers.
Undocumented migrants also represent one in every 14 workers in the hospitality industry, and a fourth of cleaners.
According to research by the American Immigration Council, 14% of workers in the construction industry are undocumented immigrants whose deportation would directly hit the construction of homes, public infrastructure projects and businesses.
The loss of undocumented migrant workers could exacerbate a labour shortage in the construction industry, which had 288,000 unfilled vacancies in September, and diminish housing supply amid a housing shortfall in the United States.
As undocumented immigrants represent one in eight workers in the agriculture industry, mass deportations would lead to labour shortages and higher food prices, according to the Peterson Institute for International Economics.
This would have an immediate impact on inflation, as prices would rise up to 9% in a scenario where the highest number of workers are deported, the same research estimates.
Undocumented workers and the US economy
Total immigrants – both legal and undocumented – have accounted for a fifth of the country’s real GDP growth since 2019, according to an analysis by Ernie Tedeshi, the director of Economics at the Yale Budget Lab.
They contributed $4.6 billion in consumer spending and $48 billion in personal income – or overall earnings – in 2023, according to economic policy initiative Hamilton Project.
Tedeshi’s analysis also found that the US labour force would have shrunk by 1.2 million between 2019 and 2023 without the presence of immigrants, making them an important source of tax revenues.
Indeed, mass deportation could lead to a massive loss of tax revenues and contributions to social benefits, according to research by the Institute on Taxation and Economic Policy, particularly in states with high numbers of undocumented workers such as California and Texas.
Undocumented immigrants paid $96.7 billion in federal, state, and local taxes in 2022 – taxes that generally help fund federal spending like social security programs, Medicare, and unemployment insurance.
Undocumented workers contributed $25.7 billion to social security, $6.4 billion to Medicare and $1.8 billion to unemployment insurance in 2022, even though they are not always eligible for such programmes.
This group contributed $8.5 billion in taxes to California, $4.9 billion to Texas, $3.1 billion to New York, and $1.8 billion to Florida in 2022, the research showed.
This article first appeared on Context, powered by the Thomson Reuters Foundation.