A new report from the US Congress Joint Economic Committee sheds light on the severe consequences of the President-elect Donald Trump administration’s proposed mass deportation policy. Immigrants play a critical role in the US economy, contributing billions in taxes, powering industries, and driving entrepreneurship. Deporting millions of undocumented immigrants would disrupt key sectors, shrink GDP, and trigger price hikes across the board, according to the committee’s analysis.
Deporting immigrants will not only upend their lives but also harm the US economy through reduced economic growth, a smaller labor force, lost jobs, and higher costs to the detriment of all Americans.
US Congress Joint Economic Committee report
Economic impact: A nation at risk
The economic fallout from mass deportations would be unprecedented. Experts warn that removing 8.3 million undocumented immigrants could reduce the gross domestic product (GDP) by 7.4% by 2028, effectively stalling economic growth during President Trump’s potential second term. This level of economic contraction is comparable to the Great Recession, a financial crisis that left lasting scars on the American economy.
“This 7.4% reduction in GDP over four years would likely mean that the U.S. economy would not grow at all during President Trump’s second term,” the report highlights.
Additionally, deporting 1.3 million undocumented immigrants—a fraction of the total undocumented population—would still cause a 1.2% drop in GDP, underscoring the economic reliance on immigrant labor even at smaller scales.
Also read: 18k Indians, mostly from Gujarat, Punjab and Andhra Pradesh, in line for US exit as Donald Trump eyes deportations
The repercussions wouldn’t stop there. Economists predict that the resulting labor shortages could push prices up by as much as 9.1% by 2028, straining household budgets and disproportionately impacting low- and middle-income Americans.
Key industries in crisis
- Immigrants have an outsized presence in sectors critical to the U.S. economy, including construction, agriculture, healthcare, and hospitality. Deporting undocumented workers would devastate these industries, which are already grappling with labor shortages.
- Construction: A quarter of the construction workforce is undocumented, and the industry is already facing a shortfall of 454,000 workers. Mass deportations could remove 1.5 million construction workers, stalling housing projects and driving up home prices.
- Agriculture: With 225,000 agricultural workers at risk of deportation, the food supply chain would be severely disrupted, causing shortages and higher food prices.
- Healthcare: Many undocumented immigrants serve as home health aides and caregivers, roles that are increasingly vital as America’s population ages. Deportations could leave countless seniors and disabled individuals without necessary care.
Ripple effects on US-born workers
The impact of mass deportations would extend far beyond immigrant communities. For every 500,000 immigrants removed from the labor force, 44,000 US-born workers could lose their jobs, the report estimates. This is because industries reliant on immigrant labor would shrink, creating ripple effects throughout the economy.
Employers would not simply hire US-born workers to fill the vacancies created by deportations. The vacancies would be too many, and US-born workers are unlikely to move into these industries.
US Congress Joint Economic Committee
The construction industry, for instance, would struggle to find qualified replacements, leading employers to downsize operations or invest in automation. These changes would destabilize local economies and reduce job opportunities for American workers.
A blow to social programs
Immigrants don’t just work; they also contribute significantly to the social safety net. Deportations would strip funding from vital programs like Social Security and Medicare. Each year, undocumented immigrants contribute $23 billion to Social Security and $6 billion to Medicare, despite being ineligible to receive most benefits.
“The economy is heavily reliant on immigrant labor, not just for tax contributions but also for keeping critical industries afloat,” the report stresses.
Without these contributions, both programs could face intensified financial challenges, further threatening their solvency at a time when they are already under strain.
Immigrants: Economic drivers and innovators
Beyond their immediate labor contributions, immigrants play an integral role in driving economic growth through entrepreneurship and innovation. Immigrants represent 14% of the US population but account for 25% of startup founders and 55% of billion-dollar companies in the US immigrant-founded companies such as Google, Tesla, and Uber employ tens of thousands of Americans and stimulate economic activity.
“Immigrants are helping meet labor demand while demonstrating that more legal pathways to working in the United States are needed,” the report notes.
Additionally, immigrants’ high employment rates and younger demographics mean they contribute more in taxes than they receive in benefits. Over their lifetimes, immigrants pay an average of $237,000 more in taxes than they consume, helping offset the costs of aging US-born populations.
A call for immigration reform
Rather than pursuing mass deportations, which would harm both the economy and society, the report calls for comprehensive immigration reform. Creating legal pathways for undocumented immigrants and expanding avenues for new immigration could address labor shortages, enhance border security, and strengthen the U.S. economy.
“The massive costs associated with these deportation plans underscore just how vital immigrants are to the US economy,” the report concludes.
With immigrant and US-born employment rates at historic highs, the report argues that immigrants are not taking jobs from Americans but instead filling critical gaps in the labor force. Addressing these realities through sound policy is essential for ensuring long-term economic stability.
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