President-elect Donald J. Trump won the White House based partly on his promises to rein in immigration, with targeted policies that range from sending criminals to their home countries to more sweeping ones like mass deportations. During the campaign, Trump pledged to end the Temporary Protected Status that allows workers from select countries to come to the U.S. to work. If some of the larger deportation efforts, like rolling back TPS, come to fruition, experts say that there will be ripple effects felt in most sectors of the economy, in particular construction, housing and agriculture.
On Sunday night, Trump announced in a social media post that Tom Homan, the former acting director of U.S. Immigration and Customs Enforcement, will be his administration’s “border czar.” Homan had said at a conservative conference earlier this year “No one’s off the table. If you’re here illegally, you better be looking over your shoulder.” He vowed to “run the biggest deportation force this country has ever seen.”
Economists and labor specialists are most worried about the economic impact of policies that would deport workers already in the U.S., both documented and undocumented.
Staffing agencies were watching the election especially closely.
“The morning after the election, we sat down as a leadership team and explored what does this mean for talent availability?” said Jason Leverant, president and COO of the AtWork Group, a franchise-based national staffing agency. AtWork provides commercial staffing in immigrant-heavy verticals like warehouses, industrial, and agriculture in 39 states.
Workers – “talent” in industry parlance – are already in short supply. While the worst of the labor crisis spurred by the post-Covid economic boom has passed, and labor supply and demand has come back into balance in recent months, the number of workers available to fill jobs across the U.S. economy remains a closely watched data point. Mass deportation would exacerbate this economic issue, say employers and economists.
“If the proposed immigration policies come into reality, there could be a significant impact,” Leverant said, pointing to estimates that a mass deportation program could leave as many as one million difficult-to-fill potential job openings.
How many undocumented immigrants work in the U.S.
There are various statistics offered up about the undocumented immigrant population in the United States. The left-leaning Center for American Progress puts the number at around 11.3 million, with 7 million of them working. The American Immigration Council, an advocacy group in favor of expanding immigration, citing data from an American Community Survey, also puts the number of undocumented people in the United States around 11 million. The non-partisan Pew Research Center puts the number at closer to 8 million people.
“There are millions, many millions who are undocumented who are in the trades; we don’t have the Americans to do the work,” said Chad Prinkey, the CEO of Well Built Construction Consulting, which works with construction companies. “We need these workers; what we all want is for them to be documented; we want to know who they are, where they are, and make sure they are paying taxes; we don’t want them gone.”
Leverant says it is still being determined how jobs lost from a mass deportation would be filled.
“Do we pull talent from one area to another, but then someone else loses it,” Leverant said. “This is pretty significant and we have to stay ahead of it.”
Leverant says he is not concerned about losing any of the 20,000 workers AtWork sends to various places because document status is strenuously checked, but if other companies lose workers, they will be leaning even more heavily on staffing agencies like AtWork for talent that is already in short supply. And supply and demand dictate worker wages, which will be forced upwards. And that will ripple throughout the supply chain right into the supermarket or sporting goods store.
“We are playing the long game now, the pain will be felt and we will see shortages, and slow-downs and delays on every front,” he said.
Produce not making it to market because there are not enough workers to bring it to distribution, or delayed construction projects, are among likely outcomes from limited labor supply.
Worries about workforce extend to skilled labor, tech
There are also concerns about how stricter immigration policy could negatively impact skilled workers.
“This is more than low-skilled labor; this ripples into tech workers and engineers. We don’t have enough skilled talent there either to fill the jobs,” Leverant said, adding that he is not envisioning doctors and scientists being rounded up and deported, but restrictions on H-1B visas and a generally more unwelcoming atmosphere could deter talent from coming.
Janeesa Hollingshead, head of expansion at Uber Works, an on-demand staffing arm of the ride-share company, agrees tech will be impacted, if past is prologue.
“The tech industry relies heavily on immigrants to fill highly technical, crucial roles,” Hollingshead said, recalling that Uber informed all tech workers on H-1B visas during Trump’s first presidency that if they went to their home countries for holidays, they may not be able to return.
According to the American Immigration Council, during the first Trump administration, the government’s U.S. Citizenship and Immigration Services denied a larger percentage of H-1B petitions than in the preceding four years, but many of the denials were overturned, leading to a lower level of denials by fiscal 2020, 13%, versus 24% in 2018. Fiscal years 2021and 2022 had the lowest denial rates ever recorded.
Hollingshead says that tech companies in the United States are going to be forced to find tech talent from currently overlooked pools of people already in the country.
“U.S. companies are going to need to figure out how to do this or face an even more dire labor shortage,” Hollingshead says.
At his Madison Square Garden rally in New York right before the election, Trump said: “On Day 1, I will launch the largest deportation program in American history to get the criminals out.”
“I would not write off his mass deportation process as rhetoric. We have to assume he means what he says,” according to David Leopold, chair of the immigration practice group at law firm U.B. Greensfelder.
Still, despite the impact that could churn through the labor market, in practice, the mass deportations might be difficult to pull off.
“It is very expensive to remove 11 million people,” Leopold said, predicting that Trump will use ICE and federal agencies but also lean on local law enforcement to round up immigrants.
In a phone interview with NBC News’ Kristen Welker shortly after the election results, Trump invoked the darker rhetoric on migrants that proved successful during the campaign while saying he isn’t opposed to people coming into the country — in fact, he said more people will be required if his administration’s strategy of requiring businesses to set up operations within the U.S. is successful. “We want people to come in,” Trump said. “We’re gonna have a lot of businesses coming into our country. They want to come into our country. … We want companies and factories and plants and automobile factories to come into our country, and they will be coming. And therefore we need people, but we want people that aren’t necessarily sitting in a jail because they murdered seven people.”
The American Immigration Council estimates that in a longer-term mass deportation operation targeting one million people per year — which it said reflects “more conservative proposals” made by mass-deportation proponents — the cost would average out to $88 billion annually, for a total cost of $967.9 billion over the course of more than a decade.
In his interview with NBC News, Trump dismissed concerns about cost. “It’s not a question of a price tag,” he said. “We have no choice. When people have killed and murdered, when drug lords have destroyed countries and now they’re going to go back to those countries because they’re not staying here. … there is no price tag,” Trump said.
Leopold says depending in the severity of the plan, changes could reach consumers in the form of increasing prices, supply problems, and restricted access to goods and services.
Construction and housing damage
Nan Wu, research director of the American Immigration Council, echoes the concerns of others in predicting turmoil for consumers if deportations tick upward under Trump.
“Mass deportation would exacerbate ongoing U.S. labor shortages, especially in industries that rely heavily on undocumented immigrant workers,” Wu said, citing AIC’s research that shows the construction industry would lose one in eight workers, citing AIC”s research that 14 percent of construction workers in the United States are undocumented.
“The removal of so many workers within a short period would push up construction costs and lead to delays in building new homes, making housing even less affordable in many parts of the country,” Wu said.
The same, she says, applies to the agriculture industry which would also see a loss of one in eight workers.
“Looking at specific occupations, about one-quarter of farm workers, agricultural graders, and sorters are undocumented workers. Losing the agricultural workers who grow, pick, and pack our food would hurt domestic food production and raise food prices,” Wu said.
Figures from the USDA put the number of undocumented farm workers at 41 percent in 2018, the most recent year figures are available, with California having the highest number.
The AIC estimates that the U.S. GDP would shrink by $1.1 trillion to $1.7 trillion.
Conservative think tank American Compass argues for a “skills-based immigration policy” which it says would require “serious immigration enforcement that prevents people from working illegally. Such enforcement will need to deal prospectively with the future flow of immigrants as well as grapple with the millions of illegal workers already here,” it stated in a policy brief.
Among its policy priorities are mandatory use of the E-Verify system by all employers, along with severe criminal penalties for repeated or willful violations; short-term work permits available to illegal immigrants who have already been in the country for a significant period of time — but with establishment of a timeline for when they must leave the country based on how long they’ve already been residing in it; and for those who have resided in U.S. for the longest, the ability to obtain permanent legal status after paying a substantial fine.
Homan said in a recent “60 Minutes” interview that “work-site enforcement operations” — he rejected the use of the word “raids” — will resume. “That’s gonna be necessary,” he said, though he added public safety threats and national security threats are the first priorities.
Prinkey says the impact of a mass deportation program would be dramatic. “One of the natural problems with undocumented workers, we don’t know how many are here because they are undocumented. It isn’t straightforward. I would wager that half or more of on-site labor is undocumented in specific geographic regions,” he said.
“If you are building a nuclear facility or colleges and universities, you might be working with very few undocumented workers because there is a much higher level of oversight,” Prinkey said. “Those are sectors that will shrug and go forward.” He expected the same for union workers.
But there will be big impacts on single-family and multi-family housing construction, according to Prinkey, sectors of the housing market which he thinks could be “paralyzed.”
“There will be incredible delays; the average 18-month project could take five years to complete because there are so few bodies,” Prinkey said. “It will be less devastating in Boston than Austin; in Austin, it would shut down every project,” he added.
Despite the dire forecast, Prinkey doesn’t think mass deportation will come to pass. “Donald Trump is a developer; he understands what is going on. A mass deportation is not possible without crippling economic impact,” he said.
(CNBC)
