CNN
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President-elect Donald Trump has made tougher immigration enforcement a key campaign promise in each of his White House bids. If he follows through on his pledge for mass deportations and tighter immigration policies, it could create a financial burden for many Americans.
That’s because immigrants – including people who are in America illegally – support the job market, keep inflation in check and add to the federal coffers. That contributes to the overall US economy: If current immigration levels are sustained, the country’s real gross domestic product (GDP) could increase by 0.2 percentage points each year over the next decade, leaving it 2% higher in 2034, according to the Congressional Budget Office’s outlook report for the next decade. By contrast, that projected growth would take a hit if Trump were able to enact his mass deportation plans.
An estimated 11 million unauthorized immigrants reside in the United States, but Trump’s focus has mostly been on deporting immigrants with criminal records. Goldman Sachs reported in June that it estimates about 1.2 million unauthorized immigrants, or 8% of that population, have criminal convictions.
Here’s the financial impact for Americans if Trump follows through on his mass deportation plan.
Deporting millions of undocumented workers would mean that businesses will need to replace those laborers. With historically low unemployment, finding people willing to work for low pay could be difficult, and companies may need to advertise higher wages to attract workers to replace deported laborers.
Consumers would foot the bill if companies’ productivity slows or paychecks increase in the agriculture, construction and services sectors, which have a large number of undocumented workers.
The University of New Hampshire Carsey School of Public Policy reported that the supply of goods would take a hit, similar to what happened during the pandemic. The report noted that inflation could peak at 0.5 percentage points higher under a mass deportation plan.
If huge populations of migrants are deported — or at the very least population growth slows as a result of tighter immigration policies — there will be less consumption of goods, which could hurt the labor market.
Businesses would likely crack down on hiring due to a drop in revenue. Decreased consumer spending and demand could also lead to layoffs, as companies reassess their 2025 budgets, according to a Brookings Institute report.
If there is negative net migration in 2025, the Brookings Institute estimates job growth would reduce by about 100,000 a month.
Even as some people who fill the jobs left by deported laborers could get higher pay than the people they replace, in aggregate, deportations can lower paychecks for US-born workers.
Between 2008 and 2015, wages for US-born workers decreased 0.6% after the deportation of 454,000 unauthorized immigrant workers, according to a report by the University of New Hampshire Carsey School of Public Policy.
The report said with fewer people consuming goods, job losses mounted across all skill levels, which offset gains by US-born low-skilled workers.
Goldman Sachs said in a recent report that “moderate fluctuations” in immigration would likely have “little impact” on wage growth and inflation. The opposite would happen if there were “dramatic policy changes.”
If a large number of unauthorized workers are deported, it would cause funding problems for key federal programs. The American Immigration Council estimated in 2022 that unauthorized immigrants contributed $46.8 billion in federal taxes, with $22.6 billion going to Social Security and $5.7 billion going to Medicare.
Unauthorized immigrants also paid $29.3 billion in state and local taxes.
The deportation plan itself could be enormously expensive. Trump recently told NBC News that “it’s not a question of a price tag” for his plans for militarized deportations. The average cost of apprehending, detaining, processing and removing one undocumented immigrant in 2016 was $10,900, according to figures released by US Immigration and Customs Enforcement (ICE) at the time. That year, ICE said the average cost of transporting one deportee to their home country was $1,978. Since then, the costs have grown.
CNN’s Matt Egan and Elisabeth Buchwald contributed to this report.
