Trump’s new deportation rules could cost the economy trillions

Deporting all undocumented immigrants would have extreme effects on the economy.

Foreign nationals were arrested this week during a targeted enforcement operation conducted by U.S. Immigration and Customs Enforcement (ICE). CREDIT: Bryan Cox/ U.S. Immigration and Customs Enforcement agency
Foreign nationals were arrested this week during a targeted enforcement operation conducted by U.S. Immigration and Customs Enforcement (ICE). CREDIT: Bryan Cox/ U.S. Immigration and Customs Enforcement agency

President Trump pushed forward on his campaign promise to deport all undocumented immigrants on Tuesday by releasing new guidelines to expand and speed up deportations. The memos from the Department of Homeland Security target all undocumented immigrants for deportation, even those who haven’t committed serious crimes, while necessitating the hiring of thousands of new agents and building new detention facilities.

These policies are going to wreck havoc on the lives, families, and communities of those who end up deported. And they will also come with a steep cost for everyone in this country.

It’s still not clear whether the administration will actually have the resources and ability to deport every undocumented immigrant. But even if it were able to deport just the 7 million undocumented workers in this country, out of the estimated 12 million total, it would reduce GDP by 2.6 percent over a decade, according to research from Ryan Edwards and Francesc Ortega at the Center for American Progress (CAP), taking a $4.7 trillion bite out of the economy. (ThinkProgress is an editorially independent project of CAP.) That’s comparable to the job losses experienced during the recent recession.

That lines up with other recent findings from Edwards and Ortega, which calculated that undocumented workers contribute 3 percent of GDP, or nearly $5 trillion in economic growth over ten years. Those contributions would disappear if all of those workers were deported.

The effects could be even more swift. The American Action Forum recently found that deporting all undocumented immigrants could shrink the economy by 2 percent in one year. The organization also found that things get worse the longer the time horizon: over 20 years, GDP would drop by 6 percent.

The pain also wouldn’t be contained in specific sectors or corners of the country. While some states with large immigrant populations, such as California and Texas, would experience enormous economic losses, every state would lose.

And it wouldn’t just be agriculture that would find itself without workers it depends on. “Just about every single industry would be affected in a large way,” said Philip Wolgin, managing director of immigration at CAP. “Without a doubt it would impact the entire country.” Retail, hospitality, financial services, and even manufacturing, the sector Trump is most focused on helping, would be among those harmed.

Even if the White House only ended up deporting half of all undocumented workers, the effect would still be huge. “It’s still trillions of dollars of losses,” Wolgin pointed out.

None of this factors in the huge cost of actually carrying through on Trump’s plans to deport immigrants and build a wall along the border. The memos released on Tuesday include a pledge to hire 15,000 more border patrol agents and construct new detention centers, as well as to begin building the wall. These will come with their own price tags.

Currently, only a fraction of the people apprehended are detained based on the severity of what they’re being apprehended for and whether they are flight risks. Under Trump’s orders, however, everyone will be detained. The mandatory detention of all undocumented immigrants would cost $902 million a year, or $9 billion over a decade.

On top of that, hiring new ICE officers is a significant cost that will require Congress to get involved. For years, Congress has only doled out enough funding to deport about 400,000 people a year, so the Trump administration will need a good deal more funding to follow through on its new policies.

“It’s going to cost a lot more money,” Wolgin said. “Can they actually come up with the funds to make it happen? That’s going to be a question of what Congress wants to do.”

Overall, apprehending, detaining, processing, and transporting every undocumented immigrant outside of the U.S. would cost between $400 and $600 billion.

The country has already had some natural experiments with what happens to the economy when immigrants are kept out. After Arizona passed a series of laws, the state’s undocumented population dropped by 40 percent between 2007 and 2012, which reduced its economy by 2 percent a year and depressed employment by 2.5 percent. Alabama passed a similar law in 2011, which caused a dramatic slowdown amid a worker shortage that reduced its economy by an estimated $11 billion.

There’s also little evidence that mass deportations will do anything to help native-born workers. In Arizona, for example, less than 10 percent of the jobs vacated by undocumented immigrants were filled by legal immigrants or low-skilled native-born workers. Instead, employment declined for low-skilled, white, native-born Arizonans between 2008 and 2009, the years with the biggest outflows of immigrants. The American Action Forum estimates that millions of jobs would be left empty if all undocumented workers were deported because there aren’t enough authorized employees to fill them.

The country even tried a widespread crackdown on Mexican immigrant workers in the 1960s as an explicit attempt to increase employment and wages for American-born workers. But recent research on the effects of ending the bracero program found that there was barely any impact on native workers’ employment or wages.