On the Job Site, in the Factories: Trump's Deportations Imperil the Pillars of the US Economy
U.S. Economy's Base Crumbling Due to Trump's Deportation Policies
By Lukas Wessling, NYC
Connect: LinkedIn Twitter Email Print Share Copy Link President Trump vowed to execut orders for mass deportations - a promise he's been doggedly pursuing. Yet, this policy choice may dismantle a vital economic cornerstone.
Undocumented immigrants serve as the backbone of America's labor force. They pour concrete, clean toilets, pick strawberries, flip burgers, and much more. The U.S. economy relies heavily on these hardworking individuals, despite some segments echoing disdain for them. Trump's success in the election hinged largely on his pledges for widespread deportations. He referred to migrants as "poison" to the nation, and Americans voted him into office. With Trump now residing in the White House, he's found himself in a predicament: to deport unauthorized immigrants or support a thriving economy.
Protests in Los Angeles have accompanied recent deportation raids, escalating into confrontations at times. The controversy stemming from these incidents will undoubtedly influence public opinion in the heart of the debate. So far, these deportations have only sparked elementary statistical trends and isolated reports, but there's increasing evidence that Trump's immigration policies are already shaking up the labor market. As reported by the "New York Times," Trump appears to be omitting certain areas from deportation actions.
Politics // Judge: LA Protest May Just Be the Beginning
According to a young LA resident, "People aren't leaving their homes. They're not going to work due to the tense atmosphere." Robert Dietz, chief economist of the US homebuilders, affirms this for his sector: the raids act as a deterrent for construction workers. While the effect is localized, Dietz expresses concern. Also because of the housing shortage in the US.
In a recent interview on NPR, Dietz stated, "We will witness intensified workplace raids like never before in this nation's history," according to Tom Homan, Trump's "border czar." But what does this mean for the U.S. economy?
Every Fifth Employee was Born Abroad
Data on undocumented immigrants is scarce due to their covert nature. Several surveys attempt to include them, but many are reluctant to participate for fear of being discovered or due to frequent relocations. The government does publish numbers on the foreign-born employed population, encompassing individuals with legal visas or seeking work.
For the past two months, statistics show the largest employment decline since the pandemic. For the first time since then, the foreign-born employed population shrank by over one million people. Media outlets suspect a connection to Trump's policies. However, this shrinkage is still within the range of normal fluctuations. If the trend persists, the consequences could be dire.
If this group continues to shrink, certain sectors of the U.S. economy could struggle. In May, one in five employed individuals in the U.S. was born abroad - approximately 32 million people. They work primarily in service jobs, on construction sites, in the fields, or on factory floors. They repair roads and transport goods.
Food Prices Could Surge
Statistics estimate that between ten and twelve million people live in the U.S. without legal status, with over eight million working - constituting around five percent of the total workforce. They predominantly populate the sectors mentioned above but are particularly present in some specific industries: Without the cheap, often uninsured migrant workers, agriculture could grind to a halt.
According to the Department of Agriculture, two-thirds of the harvest workers in 2022 were born abroad, with 42% lacking legal documentation. California, the most agriculturally significant state, is believed to host up to 75% of foreign-born harvest workers. Consequently, migration crackdowns could soon manifest themselves on the plates of American families. Or at grocery store checkout lines, where rising food prices are already causing concern.
Economy // US Farmers Fear Staff Shortages
Trump hinted at potential modifications to his immigration policies on Thursday, stating, "We must safeguard our farmers, while removing the criminals from this country." This could be a vaguely disguised sign of a shift in his position, potentially staving off rising food prices and political backlash ahead of the congressional elections next year.
Even income taxes are impacted by immigrants, often appearing as a deduction from their wages or surfacing at payment points like the supermarket or during rent payments. Studies suggest that tax revenues from undocumented immigrants account for over one-third of the revenues flowing into social security systems, from which they have limited access.
Economists like Michael Clemens of "Foreign Policy" contend that the idea that deportations would lead to native-born citizens flooding the same jobs is misguided. A study investigating the consequences of deporting 400,000 immigrants under former President Barack Obama found that the labor market worsened for both migrants and native-born workers.
The Road to Empowerment: Spain's Legalization Approach
In 2004, Spain took a completely different approach: The government legalized around 600,000 immigrants already residing in the country without legal documentation - provided they had a job offer. The result? Around half migrated to long-term legal employment, often with better pay and more demanding responsibilities. This shift also led to a decrease in the number of informally employed locals.
While Trump's administration may reject such a radical policy shift, Spain's experience offers valuable lessons for the U.S. in crafting a more pragmatic approach to immigration reform. By prioritizing fair and effective labor practices, both the economy and the immigrant population could benefit.
- Donald Trump
- Deportation
- USA
- Economy
The European Parliament has also expressed its concern about the situation in the country, given the impact of politics on the general-news. With the U.S. economy heavily relying on unauthorized immigrants, many of whom work in service jobs, construction, agriculture, and manufacturing, there is a growing fear that Trump's deportation policy could lead to staff shortages and increased labor market instability. Consequently, this could impact various economic sectors, including food pricing, if the trend persists.
