How will Trump’s plans to deport undocumented migrants impact US economy? | Business and Economy News

Gloria Solis moved to the United States from Mexico in 1998. To put food on the table for her four children, she works in the agricultural sector in Washington state. She’s one of the estimated 31 million foreign-born workers in the US — documented or otherwise — who are helping to drive the US economy.

She’s worried that if Republican presidential nominee Donald Trump gets elected, the life she has built for her and her family could be in jeopardy.

Trump has made immigration, a hot-button issue this election, one of the pillars of his campaign. The role of immigrants in the startup economy is well known – 55 percent of US startups valued at $1bn or more were founded by immigrants, and some of the most famous names in Silicon Valley are those of foreign-born entrepreneurs, including Tesla chief Elon Musk and Google co-founder Sergey Brin.

But what is often overlooked is the importance of immigrants, including undocumented ones, in other sections of the US society and economy.

In his comments, Trump has drawn a stark line defining who would be welcome in the US should he be elected the next US president. In June, he promised “to staple a Green Card to anyone who graduates from any college, even 2-yr community colleges” — a claim that the campaign later walked back on.

He has also publicly stated that he wishes to deport the 11 million undocumented immigrants in the US. His plan, championed by loyalists like Stephen Miller, who served as a top adviser during his first term, is inspired by a policy from the 1950s put in place by then-President Dwight Eisenhower who, during his time in office, deported more than a million undocumented migrants, primarily from Mexico.

Much like human rights groups, economists too have slammed Trump’s plan.

A report earlier this year from Moody’s said that Trump’s immigration policy would cause “significant tightening in the already-tight job market” and would greatly affect sectors of the economy such as healthcare, retail, agriculture and construction that depend on many of these workers.

Workforce shortage

Trump has argued that deportations would increase job opportunities for native-born workers, but a look at any of these sectors suggests that is not how things would necessarily pan out.

Between farms, food-processing facilities and supermarkets, for instance, an estimated 1.7 million undocumented migrants work in the food supply chain, according to the Center For American Progress.

According to a study from the University of Arkansas, 73 percent of agricultural workers are immigrants and 48 percent of them are unauthorised. In California, nine out of 10 agricultural workers are foreign-born like Solis.

Miller, who before his stint in Trump’s administration was an aide to lawmakers, now runs American First Legal, a legal organisation which focuses on conservative causes. He told the New York Times in an interview last November that “Mass deportation will be a labour-market disruption celebrated by American workers, who will now be offered higher wages with better benefits to fill these jobs.”

But “farmers have said again and again that they can’t find a local workforce”, Teresa Romero, president of the United Farm Workers, told Al Jazeera.

In 2019, more than half of Californian farmers said they had trouble finding workers. It’s largely expected that if Trump gets his way, those shortages will only get worse.

A study published in the Journal of Labor Economics found that for every one million deported migrant workers, there would be a loss of 88,000 jobs for US natives. That’s because businesses are less likely to expand labour opportunities if they lose their workforce and more likely to use the savings to invest in technology that can automate their work.

“Estimates of the impact of that policy are vast and have a negative effect on the US economy … including [on] American natives,” Michael Clemens, professor of Economics at George Mason University, told Al Jazeera.

Trump’s deportation plan “not only is going to impact the lives of farm workers, but is going to impact all of us. We depend on their work to make sure that we have food on our table,” Romero added.

One study suggests that a total ban on immigrant labour would raise the cost of milk by 90 percent.

The role of such workers is not restricted to the US food supply chain. Undocumented migrants account for more than 346,000 workers in the healthcare sector, 236,300 of whom are filling roles like personal health and home aides and nursing assistants.

The US already has a healthcare worker shortage. For instance, according to Mercer Health, there are roughly 12,000 open nursing assistant jobs in Texas alone and more than 14,000 in California.

Similarly, the construction sector overwhelmingly relies on foreign-born labourers. In immigrant-heavy states like Texas and California, migrant workers make up 40 percent of the sector’s workforce. And a National Association of Home Builders/Wells Fargo Housing Market Index (HMI) report found as much as a 65 percent construction labour shortage in some jobs like finished carpentry. Mass deportation would exacerbate that shortage.

Trump has also blamed migrants for the current housing shortage, arguing they are taking up portions of the limited supply that would otherwise go to documented immigrants or native-born Americans.

In a speech for the Economic Club of New York, Trump said he would ban mortgages for undocumented migrants, but as Al Jazeera has previously reported, those mortgages are a tiny fraction of overall mortgages. On the contrary, his proposal of across-the-board tariffs will raise construction costs on imports of lumber and steel, among many other items, further shooting up home prices.

Trump’s policy proposals impact other sectors, too, including the transportation sector, where undocumented workers make up 6 percent of the workforce, and leisure and hospitality, where they comprise 8.4 percent.

The Trump campaign did not respond to Al Jazeera’s request to clarify how the former president would address the exacerbated worker shortage if he is re-elected in November.

Household incomes tumble

A key part of Trump’s plan is to get rid of a programme known as Deferred Action for Childhood Arrivals (DACA). It is a law which was introduced during the administration of former US President Barack Obama and which shields from deportation those who came to the US without documentation as children.

Trump’s attempts to end DACA as president were blocked by the Supreme Court, but he has vowed to try again if re-elected. That would impact the more than half a million people living in the US under DACA protections and their families.

“The biggest impact would be the potential separation of my family. If Trump does what he says he’s going to do, which is try to clear out all the undocumented people, obviously that would leave my kids who are US citizens without their parents,” Solis told Al Jazeera.

Apart from impacting Solis and families like hers, this would drastically affect the average household income amongst immigrant communities.

A report from the Center For Migration Studies published during the 2017-2021 Trump administration shows that removing undocumented migrants from mixed-status households would cause a 47 percent reduction in average household income.

An estimated 33 percent of unauthorised immigrants have at least one child who is a US citizen, according to the Migration Policy Institute. The Solis household fits this mould. Gloria has four children – all of them native-born US citizens.

Revenue void

It’s not just migrants who would be affected, but also the tax revenue they bring in.

Undocumented immigrants paid $96.7bn in taxes – almost $60bn of which went to the federal government – in 2022. Migrants paid $25.7bn towards US Social Security programmes that they are unable to use themselves. Trump’s plan would undermine these workers and limit tax revenues that help fuel the US economy.

“We would not only be missing out on the hard work that they do if they were to potentially be deported, but we’re also missing out on that additional revenue,” Marco Guzman, senior policy analyst at the Institute on Taxation and Economic Policy, told Al Jazeera.

According to a report from the non-partisan Peterson Institute, deporting 7.5 million migrants would result in a 6.2 percent reduction in the US gross domestic product (GDP). And these estimates are still far short of the impact of Trump’s ideal plan, which would deport 11 million migrants.

Alternatively, the non-partisan Congressional Budget Office forecasts that based on current trends, new immigrants would bring in $788bn in tax revenue over the next 10 years.

In March, Goldman Sachs noted that increased migration would cause a slight increase in economic output – three-tenths of a percentage point.

Neither Miller nor the Trump campaign responded to Al Jazeera’s request for comment.