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A massive deportation of California’s undocumented residents could cut $275 billion from the state’s economy, eliminate $23 billion in annual tax revenue, significantly disrupting key industries such as agriculture, construction and hospitality, according to a new survey released Tuesday.
The report, published by the Bay Area Council Economic Research Institute in collaboration with UC Merced Public Health Professor Maria-Elena de Trinidad Young, outlines the drastic economic consequences of an increase in federal immigration enforcement.
Undocumented immigrants, which make up 8% of California’s workforce, are found to be essential to the $4.1 trillion economy in the world’s fourth largest state.
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“Undocumented and undocumented immigrants are deeply and intricately woven into our overall economic fabric,” said research co-author Abby Rice, research director at the Bay Area Council’s Economic Research Institute. “The impact of losing 8% of California’s workforce will have a crippling effect on the national economy. The impact is far beyond California’s borders, and labor shortages have contributed to rising food prices across the country.”
The study builds on federal government data, economic modeling, and nearly 40 interviews with business leaders, elected officials and community advocates across the state.
Below are some of the key findings from the report:
Undocumented workers produce almost 5% of the state’s gross domestic product. This is a number that rises to 9% given the indirect impact. The average undocumented resident contributes approximately $7,000 each year in state, local and federal taxes. Immigrants own about 40% of California’s small businesses, with undocumented individuals making up about 11% of them. These businesses generate local revenue and provide essential products and services to the communities they serve.
The study identifies geographical regions that are most vulnerable to economic shocks from mass deportation, such as the San Joaquin Valley, the Inland Empire, the San Francisco Gulf Region, and the Los Angeles region.
In agriculture alone, 63% of the labor force is migrants, and more than a quarter is undocumented. The report predicts that deporting these workers will reduce the sector’s GDP by 14%.
Similarly, undocumented immigrants account for 14% of California’s construction workforce. Their removal would result in a 16% decline in GDP in that industry.
Young said that human influence is just as important as financial sacrifice. “California has a long, rich history of embracing immigrants,” she said. “Understanding how enforcement affects families and communities is important to creating policies that support economic security and human dignity.”
The report comes amid the increased immigration enforcement by President Trump’s administration.
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The report said undocumented residents of California are primarily long-term community members. Almost two-thirds have lived in the state for over a decade, and nearly half have been there for over a decade. Many people have homes with our children born.
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“The vulnerability of undocumented and other non-citizen workers to potential immigration enforcement actions has far-reaching immigration across businesses, industries and states,” the report said.
The study calls for comprehensive federal immigration reform, arguing that legal protection and workforce certainty benefits not only immigrant families, but also businesses and industries that rely on labor.
The full report is available here.
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