Mass deportations promised by President-elect Donald Trump could have a seismic economic effect in California 鈥� potentially inflicting billions of dollars in direct damages to a wide range of industries, including small business, agriculture, construction and child care, advocates and academics said.
The impact could also spread outward to other sectors, including growth drivers like tech.
The Golden State relies heavily on the labor of immigrants, whether they鈥檙e naturalized U.S. citizens, have temporary visas or are undocumented. More than 10 million, or 27%, of California鈥檚 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.
If undocumented immigrants 鈥渕agically disappear, you鈥檙e going to erase 10% of California production,鈥� said Giovanni Peri, professor of international economics at UC Davis. 鈥淲e鈥檙e talking about hundreds of billions of dollars.鈥�
The loss of workers only speaks to part of the financial impact of deportations. Undocumented immigrants also power the state鈥檚 economy as consumers and taxpayers.
There may also be indirect impacts from the deportations. The loss of workers in construction, agriculture (including the state鈥檚 world-famous wine industry), hospitality and the care economy would have ripple effects on the rest of the state, according to Manuel Pastor, professor of sociology and American studies and ethnicity at the University of Southern California.
鈥淏ehind every software engineer is an army of nannies, food-service workers and gardeners,鈥� Pastor said.
Pastor thinks businesses are likely to protest significant cuts to their workforces given how tight the labor market is. 鈥淭hey鈥檝e come for the tax cut, they didn鈥檛 stay for stripping away their labor force,鈥� he said, referring to business owners who supported Trump.
At his campaign rallies, Trump has said immigrants are . 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, the of 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, the as 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.
Even if Trump does not fully carry out his plan 鈥� or takes a long time to do so 鈥� the mere threat of deportations will have an economic impact, said Maria Lemus, executive director of Vision y Compromiso, a national community-based organization started in San Francisco that supports promotores, people who serve as liaisons between immigrant communities and health and social service providers.
鈥淭here will probably be a lot of people not going to work for fear of getting picked up,鈥� Lemus said. 鈥淓mployers will suffer the repercussions of this also.鈥�
If a segment of the population goes into hiding, they will earn less and spend less, she said. Their kids 鈥� who are likely U.S. citizens 鈥� 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 a by the Institute on Taxation and Economic Policy. Mass deportations would lead to lost sales, property and income taxes paid by those immigrants 鈥� including into programs they have never drawn from because they can鈥檛, such as unemployment insurance benefits, or, .
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 also , 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鈥檚 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鈥檚 Fruitvale neighborhood, said people there are alarmed but not panicked.
Iglesias said there is 鈥渁 lot of Trump-proofing鈥� going on at organizations such as his, which serve low-income and marginalized communities that include undocumented immigrants.
Though President Joe Biden鈥檚 administration has also deported immigrants, Trump鈥檚 is different. He has referred to immigrants as criminals, 鈥渞ough people鈥� and . The incoming president has said he will use the U.S. military to carry out deportations.
鈥淗e built his whole campaign off vilifying Latinos and immigrants,鈥� Iglesias said. 鈥淧eople feel ready. They know this is coming.鈥� Iglesias said the previous Trump term, plus the pandemic, strengthened bonds in the community, which has found 鈥渄ifferent ways to feed and house鈥� its members.
He is also taking comfort in the fact that Oakland is a sanctuary city, and in the , including Gov. Gavin Newsom and Attorney General Rob Bonta, to fight the Trump administration. Newsom has to ask the state Legislature to fund lawsuits against the incoming administration. in a recent interview that his office is preparing legal challenges to 鈥渁 full frontal assault on our immigrant communities.鈥�
In San Francisco, Lemus鈥� 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. 鈥淭hey don鈥檛 have to open their doors,鈥� she said. 鈥淭hey can refuse to give out their information.鈥�
She also said the fear is bound to be felt by others who could be mistaken for being undocumented: 鈥淚鈥檓 a dark Latina. What if I鈥檓 walking somewhere and don鈥檛 have my (ID)? What would happen to me?鈥�
What business and industry are saying 鈥� 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: 鈥淚t is no secret that undocumented workers greatly contribute to California鈥檚 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.鈥�
A.J. Rossitto, advocacy director for the California Hotel and Lodging Association, said the group 鈥渄oes not anticipate a significant impact to hotel operations in California at this time.鈥�
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.
鈥淚t鈥檚 really hard to hear that there would be no impact,鈥� said Ada Brice帽o, co-president of the union. 鈥淚t seems there鈥檚 a shortsightedness about not understanding who (the workers) are.鈥�
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 鈥渕aking sure they鈥檙e able to assign legal guardians to their children.鈥�
Many California small businesses could also be affected by deportations.
Iglesias, of Unity Council in Oakland, said 鈥渁 lot of our merchants and business owners in Fruitvale, whether they鈥檙e immigrants with or without status, are worried about the impact on their businesses.鈥�
Carolina Martinez, CEO of small business advocacy group CAMEO Network, said 鈥渆ntrepreneurs who are undocumented pay taxes and support the economy.鈥�
Latin American immigrants start businesses at double the rate of other Americans, she said, referring to a recent of U.S. Census data, that 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: 鈥淏usiness leaders and advocates need to speak up and support ongoing investments. Small businesses are a bipartisan issue.鈥�