With Donald Trump's return to the White House on the horizon, his potential use of executive power to advance an immigration crackdown could soon take effect, bringing significant economic consequences for the U.S. economy, according to a new report. Trump, during his presidential campaign, vowed to expel millions of undocumented immigrants, stating that he had "no choice" but to carry out a mass deportation plan with "no price tag."
As reported by CNBC, Trump's proposal aims not only at recent border-crossers but also targets undocumented workers and temporary laborers. The policy would have far-reaching effects, potentially hitting both low-skilled workers and skilled laborers, which would add to existing labor shortages in certain sectors.
Economic analysts warn that large-scale deportations could lead to as many as 1 million job vacancies, resulting in a contraction of the U.S. GDP by an estimated $1.1 trillion to $1.7 trillion. Industries such as construction, real estate, and agriculture, which rely heavily on immigrant labor, would be hit particularly hard.
The Impact on Undocumented Immigrant Labor
Estimates of the undocumented immigrant population in the U.S. vary. The left-leaning Center for American Progress estimates that approximately 11.3 million undocumented immigrants live in the U.S., with about 7 million of them employed. Pro-immigrant advocacy groups like the American Immigration Council cite U.S. Census data, estimating the number of undocumented immigrants at around 11 million. Pew Research, a non-partisan think tank, suggests that the number is closer to 8 million.
Despite the fact that the most severe labor shortages post-pandemic have largely eased, the U.S. economy continues to struggle with a shortage of available workers to fill open positions. Employers and economists alike have raised concerns that large-scale deportations would exacerbate this problem.
Jason Leverant, president and COO of national recruitment agency AtWork Group, warned that the proposed immigration policy could have a major impact. AtWork, which recruits for labor-intensive industries in 39 states, projects that deportations could leave up to 1 million job vacancies difficult to fill.
In addition to low-skilled workers, experts also fear that tighter immigration policies could harm the availability of skilled labor. Leverant pointed out that this would not only affect low-wage jobs but also impact industries relying on technical workers and engineers. He explained that while doctors and scientists may be exempt from deportation, restrictions on H-1B visas and a general climate of hostility toward immigrants could discourage highly skilled talent from coming to the U.S.
Janeesa Hollingshead, expansion manager at Uber Works, echoed these concerns, noting that the tech industry, which heavily relies on immigrant labor to fill high-skill positions, would also be significantly affected. During Trump's first term, Uber had warned its H-1B visa-holding employees that if they left the U.S. for a vacation, they might not be able to return.
Construction, Real Estate, and Agriculture Face Major Losses
As noted by Nan Wu, research director at the American Immigration Council (AIC), a mass deportation could trigger severe disruptions in the economy. Wu cited AIC's findings, which suggest that industries heavily reliant on undocumented workers would be most affected.
The construction industry, for instance, could lose up to one-eighth of its workforce, as approximately 14% of U.S. construction workers are undocumented. Such a loss would increase construction costs, delay new housing projects, and make housing less affordable in many regions across the U.S.
Agriculture would face similar challenges, with the industry losing up to one-eighth of its workforce. About 25% of farm workers, as well as workers in sorting and packing, are undocumented. The loss of workers in critical agricultural roles would harm U.S. food production and drive up food prices.
The cost of carrying out a large-scale deportation plan would also be significant. The AIC estimates that deporting 1 million people annually could cost an average of $88 billion per year, amounting to a total of $967 billion over a decade. The report further shows that such a policy could lead to a U.S. GDP contraction of between $1.1 trillion and $1.7 trillion, highlighting the severe economic toll of mass deportations.
