A new study by the Bay Area Council Economic Institute and UC Merced says mass deportations could strip more than $275 billion from California’s economy and severely disrupt industries that rely on migrant labor.

Christian De Jesus Betancourt
The Merced FOCUS

Released Monday, “The Economic Impact of Mass Deportation in California” found that while about 2.28 million undocumented migrants live in California, an estimated 1.5 million of them are part of the state’s workforce, making up about 8% of all workers.

This working population drives most of the economic activity analyzed in the study.

The study comes as federal immigration enforcement intensifies, with expanded operations and faster deportations of people without legal status.

Agricultural Sector Faces Major Disruption

In the state’s vast agricultural sector, more than a quarter of workers are undocumented and over two-thirds are immigrants overall, according to the study. Removing these workers could shrink California’s farm economy by 14%, raise grocery prices, and create labor gaps that technology cannot quickly solve.

Construction would face similar strain. The study projects the sector’s gross domestic product could drop by nearly 16% if undocumented labor were lost, worsening housing delays and driving up costs in a state already struggling with affordability.

“Immigrants, both documented and undocumented, are deeply and intricately woven into our overall economic fabric,” study co-author Abby Raisz, research director for the Bay Area Council Economic Institute, said in the release.

“The impact of losing 8% of California’s workforce would have a crippling effect on the state economy. The impacts would extend far beyond California’s borders, with labor shortages contributing to higher food prices nationwide.”

Small Businesses and Tax Contributions at Risk

Beyond farms and job sites, the economic fallout would reach local shops, restaurants, schools and hospitals, the study found.

It’s estimated in the study that undocumented immigrants contribute more than $23 billion in combined federal, state and local taxes each year and help sustain small businesses as both workers and customers.

Nearly 40% of California’s small businesses are immigrant-owned, and about 11% are owned by undocumented entrepreneurs. Without them, the report warns, many towns and neighborhood business districts risk losing the foot traffic and local spending that keep them alive.

Research Incorporates Human Impact

Researchers also noted that the fear of stepped-up federal enforcement is already impacting families and small businesses.

The study, conducted by UC Merced public health professor Maria-Elena De Trinidad Young and her team, included interviews with nearly 40 people, including business leaders, elected officials and the heads of community-based organizations.

Young’s approach to the research, according to the release, added nuance to the economic data by incorporating the voices of individuals who have already experienced the impacts of tighter immigration enforcement.

Young said in the release that California has a deep history of welcoming migrants and benefiting from their economic, cultural and community contributions.

“Understanding how increased immigration enforcement is affecting such a large swath of our population is critical to addressing the fears many in the immigrant community are experiencing and informing how we plan for not only economic and fiscal impacts but the human impacts,” she said.

About the Author
As the Bilingual Community Issues Reporter for The Merced FOCUS, Christian De Jesus Betancourt is dedicated to illuminating the vibrant stories of the Latino Community of Merced. His journey is deeply rooted in the experiences of migration and the pursuit of a better life.