Agricultural workers from Bud Farms harvest celery for both American and export consumption on March 26, 2020 in Oxnard, Calif.Brent Stirton/Getty Images
Donald Trump won last month’s election in part by promising to vanquish the inflationary period, now mostly concluded, that scraped at the pocketbooks of U.S. consumers.
But his promises to deport large numbers of migrants from the U.S. portend a new set of economic troubles that are creating disquiet for employers across the country as they confront the prospect of losing staff.
The precise shape of Mr. Trump’s plan is not yet clear, nor is the number of people he could succeed in deporting in the face of what will almost certainly be a concerted effort to erect legal obstacles to his plans.
More clear is the importance of migrant labour to the U.S.
Immigrants who entered the U.S. illegally – a total of about 11 million people, according to Pew Research, some of whom have since received temporary permission to stay and work – make up roughly 5 per cent of the country’s work force, although they are considerably more important in certain sectors.
Roughly 42 per cent of workers on crop farms have no work authorization, according to the U.S. Department of Agriculture. In 2016, Pew reported that nearly 10 per cent of hospitality workers had no formal authorization to work. Roughly 1.7 million undocumented workers are employed in various parts of the U.S. food supply chain, the Center for American Progress has estimated.
More broadly, immigrants, both documented and undocumented, make up one in five food-service workers, one in four construction workers, and nearly a third of skilled trades.
Mr. Trump has blamed migrants for taking jobs from American workers and promised to end the suffering caused by inflation. Economists and those close to the president-elect have warned that some of his changes are likely to cause economic pain – what billionaire Elon Musk, chosen to help lead a new Department of Government Efficiency, has described as “temporary hardship.”
But any coming privations, Mr. Musk said, are a temporary price to pay for “long-term prosperity.”
Some argue that the removal of migrants will help to rebalance the country’s economic inequalities.
If millions of migrants leave the U.S., “the hope would be that wages would rise at the bottom end of the labour force, and that would make life better for the poorest American workers,” said Steven Camarota, the director of research with the Center for Immigration Studies, a Washington-based research organization favoured by supporters of Mr. Trump.
Mr. Camarota is hopeful deportation will heal long-standing economic wounds, in particular the number of American men who no longer work. As recently as 2000, 13 per cent of men aged 25 to 54 had fallen out of the country’s labour pool, meaning they were neither working nor looking for jobs. By 2024, that figure had increased to 18 per cent.
“If we could get it back to 2000 levels, that would add about 4.4 million workers to the U.S. economy. That’s a lot – that’s more than we’re likely to send home in the Trump administration,” Mr. Camarota said.
“And I think that’s possible with better wages.”
Rising wages could lift the price of goods, but Mr. Camarota argues that, for workers, such increases will be outweighed by income gains. Take a Big Mac: Based on overall McDonald’s labour costs, a 20-per-cent hike in worker pay would only add a few per cent to the cost of making the burger, he said.
But for the broader economy, the price tag for such change could be considerable.
Not only has it historically been costly to remove people from the U.S. – more than US$10,000 per deportee, according to U.S. Immigration and Customs Enforcement – but mass deportation is also likely to constrain gross domestic product growth and limit employment of native-born Americans, economists have warned.
“Multiple studies have found that mass deportations would shrink the U.S. economy as well as have a negative impact on employment and wages,” said Debu Gandhi, senior director for immigration policy with the Center for American Progress, a progressive policy group.
Studies of historical U.S. deportations have shown, for example, that eliminating low-income workers can also hurt the higher-income earners whose jobs relied on those workers. Larry Summers, the economist and former U.S. Treasury secretary, has also warned that large-scale deportation will propel inflation.
What’s clear, Mr. Gandhi said, is “that mass deportations will hurt the economy.”
Across the U.S., migrants have integrated into the country’s economy at remarkable speed. Those with work authorization – including the large numbers who have made asylum claims – have found jobs as roofers and home-care workers. Those without documents have tended lawns, shovelled snow and cleaned homes. Across cities such as Denver, young migrant men gather on the edges of Home Depot parking lots, eager for any job that will pay them in cash.
While some of that work is informal, undocumented workers also paid nearly US$100-billion in taxes in 2022, the Institute on Taxation and Economic Policy has calculated. That includes billions in contributions toward health care and unemployment insurance programs that do not typically allow payments to illegal workers.
The arrival of new workers to the U.S. has been among the most significant pillars of economic growth since the time when Bill Clinton was president.
In the past three decades, “virtually all of the work-force growth for prime-age workers has been from immigration,” said Daniel Costa, director of immigration law and policy research with the Economic Policy Institute, a think tank in Washington.
The cost of forcibly reversing that history is likely to be high, he said.
“Worksite raids and worksite audits will also terrify workers and push them to work in the informal economy, which means they’ll pay less in taxes and have fewer rights and benefits,” he said.
If Mr. Trump’s administration “even comes close to achieving its stated goals, there will be fewer workers available, which will hold the economy back.”
Those consequences could be tangible far from the country’s fields and slaughterhouses. A harsh new approach to migrants threatens to “cripple agriculture production in America,” the American Farm Bureau has cautioned.
It also risks altering the outlook for some of the country’s most vulnerable. New arrivals to the U.S. have become personal support workers for those who are elderly or who have disabilities, said Pamela Bisceglia, executive director of AdvocacyDenver, a non-profit that works on behalf of people with disabilities.
“If we don’t have the staff to take care of these individuals, what will happen? We don’t want to see a step back to a time where they look at institutionalization.” It was not that long ago that the care model for people with some disabilities amounted to “simply warehousing people until they died,” she said.
The U.S. has grown deeply reliant upon the migrants it has allowed into the country for many years.
“This is a labour pool that is exceedingly willing to do difficult, strenuous jobs that are not very glamorous. And big sections of our economy have grown to a place where we’re dependent on that,” said Eric Skokan, a chef who runs a Boulder, Colo., restaurant and an organic farm.
“We have swaths of the American economy that are exposed to potentially scary, difficult times coming up.”
This has made for a series of new considerations for business owners.
Carmen Morales has already thought about switching to paper plates and plastic cutlery at Santiago’s, the Mexican restaurant she and her family grew from one location in Colorado into a network of 30.
“Who is going to be washing all those dishes?”
But she has also begun thinking of how to fight back. Could she say she was compelled to hire migrants by her Catholic faith? Could that give her grounds to argue that any deportation attempt would constitute an infringement on her freedom of religion?
“How,” she asks, “is the government going to fight that?”
It is, she knows, a faint hope.