Economic Uncertainty Looms as Mass Deportation Plans Take Shape
The United States experienced a welcome drop in inflation in 2024, but experts are sounding the alarm about the potential economic fallout from President-elect Donald Trump’s plan to deport millions of undocumented immigrants. According to David J. Bier, director of immigration studies at the Cato Institute, “The economic impacts are going to be felt… There’s going to be supply chain issues. There’s going to be increases in prices, decreases in services.”
Labor Force Consequences
One of the primary concerns is the potential hole that mass deportation could leave in the labor force. A 2023 study published in the Journal of Labor Economics found that for every 500,000 immigrants removed from the workforce, approximately 44,000 U.S.-born workers could lose their jobs. This is particularly concerning given the crucial role that undocumented immigrants play in certain industries.
Industry-Specific Impacts
Chloe East, a research associate at the National Bureau of Economic Research, notes that “Immigrants, especially unauthorized immigrants, are much more likely to work in the types of jobs that create the goods and services where we’re seeing the prices go up.” This means that industries such as construction and agriculture, which rely heavily on undocumented immigrant labor, could be disproportionately affected by mass deportation. As a result, prices for goods and services in these sectors may increase rather than decrease.
Uncertainty and Unanswered Questions
While experts can make educated predictions about the potential economic consequences of mass deportation, there is still much uncertainty surrounding the issue. As East cautions, “We can’t say for sure what the effects will be… But based on what we know from past mass deportation efforts, it seems like goods and services where unauthorized immigrants are super concentrated… the prices are likely going to go up as a result of a mass deportation effort rather than down.”
Broader Economic Implications
The potential economic impacts of mass deportation extend far beyond the labor force and specific industries. As the United States navigates this complex issue, it is essential to consider the broader implications for the economy as a whole. Will the effects of mass deportation be felt in the form of higher prices, reduced services, and increased economic uncertainty? Only time will tell.
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