Mass deportations could cost California in these surprising ways

San Francisco Chronicle​

23-06-2025

As the federal government ramps up deportation efforts, a new study by Northern California researchers sought to quantify how much mass deportations would cost the state by measuring undocumented immigrants' economic contributions.
The study, conducted by researchers at the San Francisco think tank Bay Area Council Economic Institute and UC Merced, projected that mass deportations of California's almost 2.3 million undocumented immigrants could cost the state's economy $275 billion through a loss of labor, economic output, small business job creation and consumer spending among other impacts.
The Trump administration says it wants to deport an estimated 11 million undocumented immigrants who live in the United States to secure borders against immigrants who have committed crimes and because unauthorized immigrants are a drain on public resources, although people in the country illegally are generally ineligible for federal benefits.
Still, Trump initially struggled to get his agenda off the ground, with the number of deportations relatively flat before beginning to climb in March through May, partly because fewer people were nabbed at the border. Immigration arrests and detentions have spiked from January to May, however.
Anti-immigration advocates have argued that a large supply of undocumented labor depresses wages for some American workers, although there is substantial disagreement about the extent to which that's true. Supporters of immigration argue that undocumented laborers tend to take jobs Americans don't want, especially seasonal farmwork.
The report does not answer the question of whether undocumented immigrants cost the country more than they contribute to it. But it found that undocumented immigrants in California are more likely to be working age and employed than native-born residents, with an estimated 72% working compared to 67% for U.S.-born residents.
About 1.5 million undocumented immigrants work in California, constituting 8% of the state's workforce, the study estimated.
There is no official count of undocumented immigrants in the U.S. As such, researchers, including in this study, use what's called the 'residual method' to estimate it. That involves subtracting the estimated legally present foreign-born population in the U.S. from the total foreign-born population counted by the U.S. Census Bureau to get an estimated unauthorized population.
Used by the Department of Homeland Security for its official unauthorized population statistics, as well as research organizations Pew Research Center and the Migration Policy Institute, the method is generally accepted as the best way to estimate these populations.
The Bay Area Council Economic Institute is the research arm of the Bay Area Council, an advocacy organization for businesses across the Bay Area. Dennis Feehan, a UC Berkeley demographics professor and quantitative social science methodology expert, reviewed the report's methodology and said the methods used seemed reasonable and typical of this kind of work, although he said it is challenging to estimate the size of the undocumented population.
The researchers inferred that someone was likely present legally if they met certain criteria such as being born abroad to American parents, being employed in military or government positions, receiving government assistance such as food stamps or working in some jobs requiring professional licenses, such as engineers or nurses, explained the Institute's research director and report co-author Abby Raisz.
The undocumented immigrant population estimate includes both immigrants present without any kind of legal authorization and those with temporary legal protections that could be revoked, such as beneficiaries of the Obama-era program Deferred Action for Childhood Arrivals and Temporary Protected Status, which is given to nationals of certain countries.
The researchers measured economic impact in three main ways: First, the direct impact through wages that undocumented workers earn and goods and services they produce. Second, indirect impact such as when employers purchase materials used by undocumented labor. Third, induced impact through consumer spending.
Researchers said undocumented workers generate 5% of the state's overall economic activity through their labor, a number that rises to 9% after factoring in ripple effects of their spending and labor.
'We have been reliant on immigration as a source of population growth and driver of labor force growth for many years,' Raisz said. The report found that California would have lost 85,000 people last year if not for immigration. The state instead gained about 40,000 people.
'One thing I want to drive home is how embedded folks are in the state and communities,' Raisz said, pointing to the report finding that almost half of undocumented immigrants in California have been in the U.S. for more than 20 years.
The study found that almost 11% of all small businesses are owned by undocumented immigrants.
Undocumented immigrants also pay an estimated $10.6 billion in state and local taxes annually and almost $13 billion in federal taxes, the report stated, despite being excluded from most federal benefits.
The economic impact of deportations won't be equally felt. It'll be most acute in regions with a greater share of undocumented immigrants — including the Bay Area, San Joaquin Valley, Inland Empire and Los Angeles — and in industries reliant on undocumented workers including housekeeping, agriculture, construction, food service, warehousing and manufacturing.
'Those are pretty staggering numbers,' Raisz said. 'If we lose this workforce, we're not harvesting crops, we're not building homes. These are things we need to survive as an economy and a society.'
Maria-Elena De Trinidad Young, an assistant professor of public health at UC Merced who co-wrote the report, said that the economic costs of mass deportation don't just come from the removal of individuals from the U.S. It also comes from absenteeism from schools and work and the loss in productivity due to fear after immigration raids on workplaces, she said.
That same chilling effect can apply to people going out to eat or heading downtown, Young said, thus reducing spending and economic activity.
'The term mass deportation leads people to think we're going to see one big workplace raid,' she said. But, she said, 'these economic hits would be the cumulative effect of lots of small enforcement actions… Overall, we stand to lose a lot because of increased enforcement even if we don't see it immediately happening in our backyard right now.'