Deportations are taking a toll on California's economy - and have only just begun

USA Today

7 days ago

ICE raids and mass deportations could cost California $275 billion in lost wages and other funds, a report finds.
Lupe Lopez can't help but notice that business and foot traffic are painfully slow these days in the predominantly Hispanic neighborhood of East San Jose, California.
"A lot more people are either staying closer to home or not coming out at all," said Lopez, 69, whose family owns nine Arteagas Food Center supermarkets, one of which is in East San Jose.
Young people are buying in bulk, she said, because their parents are afraid of being outside, where they might be picked up by immigration agents. "We're seeing a change in shopping habits," said Lopez, co-founder of Avanzando, a nonprofit helping Latinos make advances through education.
Even as the Trump administration prepares to ramp up its immigration enforcement nationwide, the focus so far in California has already hurt local economies, research and anecdotal reports suggest.
One recent study estimated that the hit to California, the world's fourth-largest economy, could be as much as $275 billion.
"It's a pretty massive amount that even took us by surprise," said Bay Area Council Economic Institute Research Director Abby Raisz, author of the nonprofit's June report. "We anticipated it would be big, but we didn't realize how expansive and significant a role undocumented workers play in sustaining California's economy. It's bigger than we thought."
Immigration raids led to drop in California's workforce
Since the report's release, the Trump administration has expanded immigration raids to include many more people without criminal records.
The Department of Homeland Security said nearly 2,800 undocumented immigrants have been arrested in Greater Los Angeles. Local media reported that many were between June 6 and 22.
The raids had a dramatic and immediate impact on the workforce. Almost 465,000 California workers fled from the labor ranks during the week of June 8, as immigration authorities raided worksites across the Los Angeles area, according to a July University of California, Merced study.
As a result, people working in private-sector jobs in California dropped by 3.1%, a decline not seen since the COVID-19 pandemic, the study noted, though it's unclear whether they left permanently or just for a short time.
California Lieutenant Governor Eleni Kounalakis said immigrants are the backbone of the state's economic workforce.
"They are the workers who feed us, the caretakers who support us, the entrepreneurs who drive innovation, and the neighbors who strengthen our communities," Kounalakis said in a statement. "The ripple effects of mass deportation in California would be felt nationwide and beyond."
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Report: Undocumented workers' imprint cannot be underestimated
Of California's 10.6 million immigrants, 2.3 million are undocumented, according to Pew Research Center. They account for 8% of all workers statewide.
Undocumented immigrants are more likely to be in the workforce than Californians born in the United States, Bay Area Council's Raisz said, with 72% of undocumented immigrants participating in the workforce compared to about 67% of native-born.
Immigrants are widespread, but concentrated in certain fields and geographic areas. More than 60% of California's agricultural workers are immigrants and almost 26% are undocumented; about 41% of the state's construction workers are immigrants and 14% are undocumented, Raisz' report found.
Those workers are concentrated in coastal urban areas in the Bay Area and Greater Los Angeles, as well as in agricultural hubs in the Central Valley.
"These regions are critical drivers of California's economy and understanding the potential impact of deportation on local, state, and national economies has never been more critical," the report said.
And even these high figures are probably an undercount, said Darlene Tenes, the executive director of Farmworker Caravan, a San Jose-based nonprofit assisting area farmworkers with some basic needs.
"It's very, very difficult to document the undocumented. They are very much a shadow community," Tenes told USA TODAY. "I think it's hard to put a number on it. You have to understand, almost every industry in California uses undocumented workers."
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Undocumented workers' impact on agriculture, construction
Raisz said her report shows how entrenched undocumented immigrants are in California and how much they contribute to their communities.
"About two-thirds of them have lived here for more than a decade, and about a third own their own homes, so they pay both income and property taxes," Raisz said.
Without undocumented labor, GDP generated by California's agriculture would decline by 14%, Raisz said, and the state's construction industry would see a 16% decrease. Both sectors were already experiencing labor shortages, he said, which will only be compounded by immigration crackdowns.
Tenes said Americans and some parts of the world won't have access to fresh fruits and vegetables without undocumented workers, as California's coastal counties and Central Valley are consistently among the largest agricultural producers in the nation.
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"Without (undocumented workers), we don't eat, period," Tenes said. "Everything that you eat from a grocery store, strawberries, grapes, lettuce, bread, cereal, all came from the ground at some point. Guess who picks them?"
About half of the nation's 4.3 million construction workers are Hispanic and as many as 1 million of them are undocumented, according to George Carillo, CEO of the Hispanic Construction Council.
Thousands of those workers are in California and will be needed as the nation faces a housing shortage of around 4.5 million homes and Los Angeles recovers from this year's deadly wildfires, Carillo said.
"Who do you think is going to help rebuild those homes that were lost?" Carillo said.