According to advocates and scholars, the mass deportations that President-elect Donald Trump threatened could have a devastating economic impact on California, perhaps causing billions of dollars in direct damages to a variety of industries, including small business, agriculture, construction, and child care.
Additionally, the effect might extend to other industries, including tech and other growth engines.
Whether they are undocumented, temporary visa holders, or naturalized U.S. citizens, immigrants play a vital role in the Golden State’s economy. More than 10 million, or 27%, of California s population is foreign-born, according to the most recent U.S. Census data. Roughly a fifth of those are thought to be undocumented; as of 2022, estimates ranged from 1.8 million undocumented immigrants, according to the Pew Research Center, to 2.4 million, according to the left-leaning Institute on Taxation and Economic Policy.
According to Giovanni Peri, a professor of international economics at UC Davis, 10% of California productivity would be lost if undocumented immigrants vanished overnight. Hundreds of billions of dollars are at stake.
Deportations have a financial impact that goes beyond the loss of labor. As taxpayers and consumers, undocumented immigrants also drive the state’s economy.
The deportations can have indirect effects as well. According to Manuel Pastor, a professor of sociology and American studies and ethnicity at the University of Southern California, the loss of workers in the care economy, construction, agriculture (including the state’s renowned wine industry), and hospitality would have repercussions throughout the rest of the state.
According to Pastor, a horde of nannies, food service employees, and gardeners work behind every software programmer.
Given the tight labor market, Pastor believes companies would likely fight large worker reductions. They ve come for the tax cut, they didn t stay for stripping away their labor force, he said, referring to business owners who supported Trump.
Trump has claimed that immigrants are targeting Black and Latino American employment at his campaign rallies. Federal data undermines that claim, instead showing foreign-born, noncitizen Black and Hispanic workers predominantly work different types of jobs than their native-born counterparts.
It could be costly to replace those who are deported. In the construction industry, for example, themedian weekly earningsof full-time, U.S.-born workers as of 2020 were $1,031 vs. $786 for foreign-born workers, according to an analysis by the Bureau of Labor Statistics. In California, themedian hourly wageas of 2021 was $30 an hour for U.S.-born workers vs. $24 an hour for immigrant workers vs. $16 an hour for undocumented workers, according to the California Immigrant Data Portal, a project by the Equity Research Institute at USC, which is directed by Pastor.
According to Maria Lemus, executive director of Vision y Compromiso, a nationwide community-based organization founded in San Francisco that supports promoters—people who act as a bridge between immigrant communities and health and social service providers—the mere threat of deportations will have an economic impact even if Trump does not complete his plan or takes a long time to do so.
There will probably be a lot of people not going to work for fear of getting picked up, Lemus said. Employers will suffer the repercussions of this also.
If a segment of the population goes into hiding, they will earn less and spend less, she said. Their kids who are likely U.S. citizens may not go to school, either, Lemus added.
And undocumented immigrants contribute not just their labor, they also pay significantly into government coffers. In 2022, they paid $8.5 billion in local and state taxes in California, according to anational studyby the Institute on Taxation and Economic Policy. Mass deportations would lead to lost sales, property and income taxes paid by those immigrants including into programs they have never drawn from because they can t, such as unemployment insurance benefits, or,until recently, Medi-Cal.
Then there are the immigrants who have legal status and may be in the state for different reasons, such as for temporary work. During the campaign this time around, Trump and Vice President-elect JD Vance mentioned that they would alsotarget the Temporary Protected Status program, which allows immigrants to stay in this country and work legally if their countries are determined to be unsafe.
The Trump administration may also target different visas that allow people born elsewhere to come to California to work in the fields (the H-2A visa), or in the tech industry (the H-1B visa). During his first term, Trump loosened rules for the issuing of visas for temporary workers such as the ones who worked for businesses he owned, and tightened rules for H-1B visas.
The U.S. approved more than 46,000 H-1B visas for California employers in September, according to the most recent U.S. Citizenship and Immigration Services data. About 30% were for Google, Meta and Apple.
Preparing for what Trump s deportations could bring
Chris Iglesias, CEO of Unity Council, a nonprofit affordable-housing developer that also provides social services to thousands of residents of Oakland s Fruitvale neighborhood, said people there are alarmed but not panicked.
Iglesias said there is a lot of Trump-proofing going on at organizations such as his, which serve low-income and marginalized communities that include undocumented immigrants.
Though President Joe Biden s administration has also deported immigrants, Trump santi-immigrant rhetoricis different. He has referred to immigrants as criminals, rough people andeven animals. The incoming president has said he will use the U.S. military to carry out deportations.
He built his whole campaign off vilifying Latinos and immigrants, Iglesias said. People feel ready. They know this is coming. Iglesias said the previous Trump term, plus the pandemic, strengthened bonds in the community, which has found different ways to feed and house its members.
He is also taking comfort in the fact that Oakland is a sanctuary city, and in thepromises state officials have made, including Gov. Gavin Newsom and Attorney General Rob Bonta, to fight the Trump administration. Newsom hascalled a special sessionto ask the state Legislature to fund lawsuits against the incoming administration.Bonta told CalMattersin a recent interview that his office is preparing legal challenges to a full frontal assault on our immigrant communities.
In San Francisco, Lemus organization has joined with other community groups to prepare for the deportations.
They are working on getting out information about what people can do to get ready and to inform them of their legal rights. They don t have to open their doors, she said. They can refuse to give out their information.
She also said the fear is bound to be felt by others who could be mistaken for being undocumented: I m a dark Latina. What if I m walking somewhere and don t have my (ID)? What would happen to me?
What business and industry are saying or not saying
Business and labor representatives from some of the industries most likely to be affected refused interview requests from CalMatters, or had no comment. They include the California Restaurant Association, Napa Valley Vintners, the Wine Institute and the State Building and Construction Trades Council of California.
The California Chamber of Commerce emailed a statement from its president, Jennifer Barrera: It is no secret that undocumented workers greatly contribute to California s economy given our geographical proximity to the border, which is why CalChamber has been a long-time supporter of a national comprehensive effort that provides a pathway to citizenship or legal status for these individuals while at the same time addressing border security.
Related ArticlesElon Musk is sharing some details about his immigration path. Experts say they still have questionsHere’s how Trump’s mass deportation threats could play outACLU sues government for records detailing Donald Trump s mass deportation planTrump immigration policy: Will California s undocumented community face deportation?Why mass deportations will drive up your grocery billA.J. Rossitto, advocacy director for the California Hotel and Lodging Association, said the group does not anticipate a significant impact to hotel operations in California at this time.
That contradicts the view of Unite Here Local 11, a union that represents 32,000 hospitality workers in Southern California and Arizona who work in hotels, restaurants, universities, convention centers and airports.
It s really hard to hear that there would be no impact, said Ada Brice o, co-president of the union. It seems there s a shortsightedness about not understanding who (the workers) are.
She said the union is trying to figure out how to support those who would feel the impact of deportations, from its own members to their children and families. That includes educating the workers about what to do in case of workplace raids, or making sure they re able to assign legal guardians to their children.
Many California small businesses could also be affected by deportations.
Iglesias, of Unity Council in Oakland, said a lot of our merchants and business owners in Fruitvale, whether they re immigrants with or without status, are worried about the impact on their businesses.
Carolina Martinez, CEO of small business advocacy group CAMEO Network, said entrepreneurs who are undocumented pay taxes and support the economy.
Latin American immigrants start businesses at double the rate of other Americans, she said, referring to a recentUCLA Luskin Public Policy analysisof U.S. Census data,which also foundthat immigrants started 36% of U.S. businesses last year.
Besides the deportation worries, Martinez is concerned about a possible drop in government funding that helps small businesses get up and running: Business leaders and advocates need to speak up and support ongoing investments. Small businesses are a bipartisan issue.
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