Trump’s Plans for Mass Deportation Would Be an Economic Disaster
Besides being cruel, deporting 11 million unauthorized immigrants would cause labor shortages and slash national wage and salary income, likely triggering a recession and reigniting inflation.
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Donald Trump’s fierce enmity towards immigrants is a central theme of his campaign, as it was in 2016. This time, though, he is offering detailed plans that, if carried out, would inflict misery on a mass level and major costs for taxpayers and the economy.
Trump’s plans include once again barring entry from selected Muslim-majority countries and, despite the waning threat from COVID-19, denying all asylum claims because a petitioner might carry an infectious disease. Even more radical, the former president promises, if he’s returned to office, to round up millions of unauthorized immigrants, hold them in large detention camps built by the military, and summarily deport them. In a recent interview in Time magazine with Washington Monthly Contributing Editor Eric Cortellessa, Trump said that he is prepared to use the National Guard and the armed forces to execute his plan: “I can see myself using the National Guard and, if necessary, I’d have to go a step further. We have to do whatever we have to do to stop the problem we have.” He justifies all of this with wild claims that other nations are sending patients from insane asylums to the southern border, people akin to Hannibal Lecter, and echoing Adolf Hitler’s attacks on German Jews by warning that immigrants are “poisoning the blood of our country.”
The program’s alarming dimensions are evident from new data on unauthorized immigrants issued by the Department of Homeland Security (DHS). In 2022, 11 million unauthorized or undocumented immigrants lived here, comprising 3.3 percent of the U.S. population. Trump’s dragnet also could end up detaining and deporting 4.4 million children who are U.S. citizens—because at least one of their parents is an unauthorized immigrant.
The MAGA attacks on immigration also draw on common fallacies and reckless misrepresentations. For example, the vast majority of unauthorized immigrants have deep ties to their communities and the country, with 79 percent having lived here for at least 12 years and 44 percent for 20 to 40 years. Some also work for businesses, which is the equivalent of 4.5 percent of all employment today. Removing them from the workforce could, at once, bring on a recession while reigniting inflation.
Despite the popular misconception that most of these unauthorized immigrants are farm workers, only 4 percent, or 283,000, work in agriculture. Mass deportation would be particularly damaging to the construction industry, which employs 1.5 million or 21 percent of all working unauthorized immigrants, and hospitality companies, which employ 1.1 million or 16 percent. Another 1 million or 14 percent of working unauthorized immigrants have jobs providing professional, scientific, technical, or administrative services; 10 percent or 714,000 work in manufacturing; and 8 percent or 570,000 have jobs in retail.
In important part, this reflects unauthorized immigrants’ unrecognized range of educational attainments. While 40 percent did not graduate high school, 27 percent have only high school diplomas, the same share as all U.S. adults. Contrary to their portrayals by Trump and his followers, 14.5 percent have some college or associate degrees, and another 18.5 percent have college or graduate degrees. That’s the same share of college graduates as Black adults in 2006 and Hispanic adults in 2018.
By any measure, a policy that eliminated 4.5 percent of the current workforce, including large numbers of college and high school graduates, would set off serious economic tremors. Using Okun’s Law on the relationship between rising unemployment and GDP, a 4.5 percent drop in employment is associated with depressing GDP growth by more than 9 percentage points. This estimate also includes the impact on other jobs. A recent study of much more modest programs to deport immigrants found clear evidence that they cost other American jobs. By one calculation, deporting 1 million immigrants would lead to 88,000 additional employment losses by other Americans, suggesting that Trump’s program could cost up to 968,000 Americans their jobs on top of the 7.1 million jobs held by immigrants up for deportation.
The application of Okun’s law to mass deportations is not precise. Nevertheless, it suggests that if Trump’s program were carried out over three years, it would produce a downturn that could approximate the Great Recession in 2009, when GDP fell 2.6 percent and sluggish growth persisted for years.
Another gauge of how mass deportations could depress the economy is their direct effects on national wage and salary income. To measure this effect, we start with a landmark study by Harvard economist George Borjas, who found that legal immigrants earned just 4 percent more than their unauthorized counterparts. The Bureau of Labor Statistics (BLS) reports that the median earnings of all foreign-born people working full-time in 2022 was $45,029. Since undocumented immigrants account for 22 percent of foreign-born workers, we can estimate that the median labor income of undocumented immigrants working full time was about $43,300 in 2022. And since wage and salary costs have risen 6.7 percent since 2022, the median labor income of full-time working undocumented immigrants today is about $46,200.
Some work part-time, so we also used data on the share of men and women working part-time and the shares of male and female unauthorized immigrants to estimate that 16.6 percent of employed unauthorized immigrants work part-time (nearly 1.2 million) and 83.7 percent work full-time (almost 6 million). Assuming conservatively that part-timers work about 30 hours per week, their median wage and salary income is $34,650.
Doing the math, we find that a mass deportation program could depress national wage and salary income by $317.2 billion or 2.7 percent of labor income in 2023. This would be a much larger percentage loss than during the 1980, 1991, and 2002 recessions. It also would be more than half the 5 percent decline in 2009 at the height of the Great Recession. By these measures, too, a severe recession would likely accompany Trump’s draconian program.
There would be more costs because a mass deportation program could revive inflation. Labor costs account for about 60 percent of business costs, which increase when companies have to replace large numbers of workers—as happened when restaurants, bars, and hotels reopened after COVID-19 crested. Businesses facing significant labor shortages have three main options: Pay more overtime, pay more to recruit new workers, or live with lower productivity. In all cases, the additional costs are typically passed on through higher prices. While Federal Reserve researchers have found that tight labor markets usually have modest effects on overall inflation, the impact is greater when the tightness is severe and persistent—as it would be if a new administration moved to deport more than 7 million current workers in construction, hospitality, manufacturing, retail, and other industries.
On top of these blows, mass deportations would involve enormous costs for taxpayers. One study found that apprehending, detaining, transporting, processing, and finally deporting unauthorized immigrants in 2015 cost the government an average of $18,214 per deportee or $24,094 in current dollars. Using the latest DHS estimates, the taxpayer costs to deport 11 million people would come to $265 billion—without including their American children or the costs to build and maintain large detention camps. For perspective, $265 billion is equivalent to 11 percent of all projected income tax revenues in 2024 and 30 percent of the Pentagon’s 2024 budget.
It’s commonplace to call the United States a nation of immigrants. In fact, we now trail at least 40 countries in the foreign-born (legal and unauthorized) share of the population. One reason is the surge of formal deportations following the passage of the Patriot Act in 2001. In the aftermath, George W. Bush’s administration deported about 125,100 people per year, or 1 million in all. Those numbers increased under Barack Obama to 155,300 annually and 1.2 million people over eight years. Remarkably, deportations fell sharply under Trump, averaging 81,400 people annually and 325,000 over four years. President Joe Biden has continued that new trend, with deportations declining to 70,200 annually.
Now, Trump seems determined to set new records for deportations, regardless of the costs to taxpayers and the economy.
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