As the Trump administration aims to increase deportations and weaken protections for immigrants, businesses are feeling the impact on their labor supply. Executives express concerns that this crackdown could lead to a substantial decline in available workers, ultimately hindering economic growth.
Migrant Crackdown Poses Threat to Labor Supply and US Economy
Migrant Crackdown Poses Threat to Labor Supply and US Economy
President Trump’s intensified immigration enforcement raises alarms among businesses relying on immigrant labor, warning of potential economic slowdown.
In Maryland, Victor Moran, CEO of a 1,200-person cleaning business called Total Quality, is feeling the strain amid President Trump's immigration policies. Since the administration moved to revoke protections for certain Venezuelan and Nicaraguan immigrants, he has already lost around 15 employees. If the crackdown expands, he expects to see far more workers depart, particularly those dependent on similar temporary work permits. This trend is alarming many businesses across the U.S., as Trump's deportation policies threaten to disrupt the already critical supply of immigrant workers.
According to census data, nearly 20% of the U.S. workforce last year comprised immigrants, a notable increase from less than 10% in 1994. Trump has emphasized targeting individuals living in the U.S. illegally, who constitute an estimated 4% of the workforce. His campaign promise to conduct mass deportations resonated with a significant portion of the electorate, including many Hispanic voters.
Under this renewed focus, workplace raids have been reinstated, targeting individuals with expired student visas and those on temporary protections, as the administration seeks to roll back policies created by previous administrations. This approach is causing anxiety for many long-term residents like Justino Gomez, a cleaner originally from El Salvador. Authorized to work through the Temporary Protected Status (TPS), Gomez lives in fear that his protections could be addressed next. "Every time I leave home, I have this stress on my mind," he explained through a translator.
Experts warn that even if legal challenges limit the extent of Trump's policies, the mere perception of risk may drive workers like Gomez to retreat from public life or abandon their jobs, further locking businesses in a tight labor market. Economist Giovanni Peri points to a slowdown in workforce growth since Trump’s inauguration as evidence of the potential economic toll, positing that companies facing worker shortages may struggle to expand, triggering a slow economic decline.
The agricultural sector, similarly impacted, faces potential inflation as demand for labor grows but availability shrinks. Adam Lampert, CEO of a care provider based in Texas, highlights that about 80% of his 350 employees are immigrants. Current policies have already translated to loss of workers and challenges in meeting demand without further raising wages.
As significant sectors, including healthcare and construction, experience similar labor shortages, local leaders emphasize the need for immigration reform. Jim Tobin of the National Association of Homebuilders cautions that without legislative action to address labor needs, the construction industry risks facing additional cost pressures and project delays.
Despite acknowledging the disruption to sectors dependent on undocumented labor, the Department of Homeland Security maintains that workplace raids are a fundamental aspect of their immigration strategy. The interaction of these enforcement efforts with the labor supply raises concerns anew about the broader economic ramifications, threatening to turn a historically dynamic economy into a stagnant one.
