It’s American taxpayers who will bear the economic burdens of Trump’s immigration enforcement plans.
By Jared Keller
People protest outside of the Elizabeth Detention Center during a rally attended by immigrant residents and activists on February 23rd, 2017, in Elizabeth, New Jersey. (Photo: Spencer Platt/Getty Images)
Following widespread protests and a series of defeats in state and federal courts amid challenges to the president’s travel ban, the Trump administration last week released broad guidelines for the aggressive enforcement of immigration laws. The new directives, which are designed to empower state and local law enforcement officials to enforce federal immigration measures, came with rumors that the Department of Homeland Security had considered mobilizing some 100,000 National Guard troops to round up undocumented immigrants, sparking fears among migrant communities and civil rights advocates of mass deportations.
Department of Homeland Security Secretary John Kelly sought to allay those anxieties during an official trip to Mexico alongside Secretary of State Rex Tillerson last week. “Let me be clear, there will be no mass deportations, everything we do in DHS will be done legally,” Kelly said following meetings with Mexican officials, where he and Tillerson attempted to walk back the president’s harsh rhetoric toward America’s southern neighbor. “The focus of deportation will be on the criminal element, all of this will be done in close coordination with Mexico.”
President Donald Trump may want to heed his DHS chief’s advice. While it’s fairly well understood that America’s inward turn will have a deleterious effect on the country’s long-term competitiveness in research and innovation, new reports suggest that mass deportations would have an even more immediate effect on the United States’ economy. According to two independent reports, the implementation of mass deportations would reduce the national gross domestic product (GDP) by 1.4 percent in the first year alone and, ultimately, 2.6 percent in the next decade — a cumulative economic loss of $4.7 trillion.
The reports, compiled by researchers at the the Center for Migration Studies and Center for American Progress over the last several months, paint a dire picture of an American economy strained by the sudden, rapid evaporation of its undocumented immigrant population. Of the 11.3 million undocumented residents targeted by the Trump administration, some seven million are workers (4.9 percent of the overall U.S. workforce), which means key industries that rely on migrant labor — agriculture, construction, and hospitality — would face workforce reductions between 10 and 18 percent, according to the CAP. The irony is that the bulk of the economic losses will be endured not by immigrant-dependent sectors, but large industries like financial activities, manufacturing, and the wholesale and retail trade, which stand to see annual losses of $193 billion total. Overall, U.S. industries face a short-run loss of $236 billion.
(Chart: Center for Migration Studies/Center for American Progress)
Forget business: Let’s talk about actual households. According to the CMS, there were 5.3 million households with at least one undocumented resident as of 2014, more than half of which (2.8 million) are home to nearly 5.7 million U.S.-born children under the age of 18. Swiftly removing undocumented residents from these mixed-status households would result in an immediate reduction of median household income from $41,300 to $22,000, a 47 percent drop that would suddenly place millions of American families below the poverty line. It’s also worth noting that some 2.4 million mortgages are held by households with undocumented occupants, per the CMS report, and their sudden absence would certainly make markets still recovering from the meltdown of 2008 as skittish as they’ve been in years.
All of this is to say nothing of the actual cost of deportation to the federal government. According to ThinkProgress, the long process of “apprehending, detaining, processing, and transporting” every undocumented immigrant beyond U.S. borders would cost somewhere between $400 and $600 billion (focusing just on workers would cost about $114 billion, according to the CAP report). Even if the federal government attempted to spread these costs over several years, jailing every undocumented immigrant in the country would cost roughly $902 million annually, or $9 billion over a decade. And let’s not forget the the American citizen children of undocumented parents: Raising them through age 18 after throwing their parents out if the country would cost around $118 billion, according to the CMS report.
Those additional costs are going to fall on Trump administration already facing tax revenue shortfalls thanks to the broader economic effects from mass deportations — and facing losses up to $900 billion over the next decade. “Federal government revenues are roughly proportional to GDP, while federal spending is less responsive,” CAP researchers Ryan Edwards and Francesc Ortega explain. “With associated increases in interest payments, removal would thus raise the federal debt by $982 billion by 2026 and increase the debt-to-GDP ratio, a common measure of fiscal sustainability, by 6 percentage points over the same time period. Unsustainably high levels of the debt-to-GDP ratio may ultimately raise interest rates and choke off economic growth.”
The week the Trump administration unveiled its new deportation regime, activists staged “A Day Without Immigrants,” a nationwide strike by immigrant workers designed to make their potential absence felt in the wallets of both their employers and lawmakers. Perhaps that symbolism went unnoticed in the White House—but a glance at the national balance sheet might get the president’s attention.
