President-Elect Donald J. Trump secured the White House, in part, by pledging to control immigration. His proposed policies span from deporting criminal immigrants back to their countries of origin to more expansive measures, such as mass deportations.
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| Go Nakamura | Reuters |
Among his campaign promises was a commitment to terminate the Temporary Protected Status (TPS) program, which currently permits workers from select nations to enter the United States for employment.
Experts suggest that if significant deportation measures, like reversing TPS, are enacted, these changes could have a widespread impact on the U.S. economy, particularly in key industries such as construction, housing, and agriculture.
Economists and labor specialists express the greatest concern over the potential economic fallout from policies that would deport both documented and undocumented workers currently in the U.S. Staffing agencies were particularly vigilant during the election, anticipating potential challenges.
Jason Leverant, president and COO of the AtWork Group, a staffing agency serving industries with substantial immigrant workforces like warehouses, industrial sites, and agriculture, shared that his leadership team met right after the election to discuss how changes might affect labor availability.
There is already a shortage of workers in the U.S. labor market, especially following the labor shifts of the post-COVID-19 economic boom. Although the labor supply has somewhat stabilized, the number of available workers remains a critical issue.
Employers and economists warn that mass deportations could intensify this labor gap. Leverant highlighted that a large-scale deportation program could open up to a million difficult-to-fill job vacancies.
The exact number of undocumented immigrants working in the U.S. varies depending on the source. The Center for American Progress estimates around 11.3 million undocumented immigrants, with 7 million of them employed.
The American Immigration Council, using data from the American Community Survey, also places the undocumented population at approximately 11 million, while the Pew Research Center provides a more conservative estimate of 8 million.
In the construction sector, Chad Prinkey, CEO of Well Built Construction Consulting, emphasized the indispensable role that undocumented workers play in the industry. "We need these workers; what we all want is for them to be documented," Prinkey said. "We want to know who they are, where they are, and ensure they are paying taxes, not to see them expelled."
Leverant echoed these sentiments, underscoring the challenges in reallocating labor if deportations lead to significant job losses. If other companies lose workers, they would likely depend even more on staffing agencies, and the resulting supply-demand imbalance would drive wages higher, affecting supply chains and retail prices.
The impact of labor shortages due to deportation could also ripple through the skilled labor and tech sectors. Leverant noted that this issue goes beyond low-skilled labor, reaching into fields that demand skilled workers, such as technology and engineering.
Restrictive immigration policies could create a less welcoming environment, discouraging skilled talent from seeking U.S. opportunities. Janeesa Hollingshead, head of expansion at Uber Works, recalled how, during Trump’s first term, tech workers on H-1B visas were advised not to travel abroad, as they risked being denied reentry.
The American Immigration Council highlighted a sharp increase in H-1B visa denials during Trump’s administration, although the number of denials declined by fiscal year 2020. Hollingshead suggests that U.S. tech companies might need to look inward for talent, emphasizing untapped potential within the country.
During a rally at Madison Square Garden before the election, Trump stated his intention to launch an extensive deportation program. Immigration law expert David Leopold cautioned that Trump’s commitment to mass deportations should be taken seriously, although implementing such a program would be costly and complex.
Leopold anticipates Trump might use federal agencies alongside local law enforcement to execute these plans. The American Immigration Council estimates that a mass deportation targeting one million individuals annually would cost approximately $88 billion per year, amounting to nearly $1 trillion over a decade.
Despite these projections, Trump dismissed concerns over costs in a post-election interview, stressing that there is no price too high for ensuring safety in the U.S. Nonetheless, such sweeping policies would likely influence consumer prices and the accessibility of goods and services.
The construction and housing markets would face particular challenges if immigration policies led to significant labor shortages. Nan Wu, research director of the American Immigration Council, explained that mass deportation would deepen the labor deficit, especially in industries reliant on undocumented workers, such as construction and agriculture.
Wu emphasized that the construction industry could lose one in eight workers, leading to higher costs and delays in new housing projects, making housing even less affordable.
Agriculture, too, would suffer from labor shortages if undocumented workers were deported. Wu noted that about one-quarter of agricultural roles are filled by undocumented workers, including those who handle essential tasks like picking and packing produce. Without these workers, food production would decline, and prices would rise.
To mitigate the economic impact of a mass deportation, the conservative think tank American Compass has suggested a skills-based immigration policy. This policy would involve rigorous immigration enforcement, mandatory E-Verify use, and short-term work permits for undocumented immigrants who have lived in the U.S. for a significant period, with pathways for permanent legal status after paying a fine.
Prinkey, in particular, foresees dramatic repercussions if large-scale deportations take place, particularly in construction, where undocumented workers make up a substantial portion of on-site labor in certain regions.
While Prinkey doubts that mass deportations will come to pass due to their potential economic ramifications, he acknowledged that certain sectors, like high-oversight construction projects, might feel less impact. However, single-family and multi-family housing construction could face paralysis, extending project timelines significantly.
Ultimately, Prinkey believes that Trump’s background as a developer might prevent him from enacting mass deportation policies that would harm the economy. Nonetheless, the debate over immigration and labor shortages remains pressing, with significant implications for various sectors and the broader U.S. economy.
