President-elect Donald Trump’s promise to further restrict immigration and roll out “mass deportations” has not been finalized, but the specter of looming policy changes is already reverberating on Main Streets across America.
To veteran restaurateur Sam Sanchez, the effects were plain as day during his visit this week to Chicago’s Little Village, a neighborhood known as the “Mexico of the Midwest.”
“Some of the (Little Village) restaurants told me they’re down 50% in sales,” said Sanchez, founder of Chicago-based restaurant and event management company Third Coast Hospitality Group.
“People are afraid of walking the streets right now; there’s a lot of fear … a lot of fear,” said Sanchez, who’s also a member of the American Business Immigration Coalition, which advocates for business-friendly immigration reform. “And that’s where it starts. The employees will start getting worried and say, ‘Should I go to work? Should I take a chance?’ The big concern is that restaurants will close without employees, and this is just one industry: There are millions of people working who are undocumented.”
There are an estimated 10.5 million undocumented immigrants in the US, according to the Global Migration Center at the University of California-Davis. Of those, about 8.5 million are employed, said Giovanni Peri, an economist and director of UCDavis Global Migration Center.
Business owners, industry members and economists alike warn that large-scale deportations of undocumented immigrants, along with stricter border measures and the revoking of Biden-era protections, could have a seismic impact on the labor market and US economy. Critical industries such as agriculture, leisure and hospitality, construction and health care could take some of the largest hits.
“Shrinking worker (supply) in a period in which those sectors need more workers and are having a hard time finding workers will clearly generate a slowdown,” Peri said. “That will probably shrink the sector; they will not fill vacancies; some companies will close; some will slow down; and then a lot of other ripple effects can happen that can slow growth and reduce the size of the economy.”
‘Front lines of our US food system’
Mass deportations of undocumented immigrants would likely slash farm labor in half, which could result in massive food waste and create risk for the nation’s food security, said Ron Estrada, chief executive officer at advocacy organization Farmworker Justice.
“They’re the front lines of our US food system,” Estrada said.
And many of them have been working the fields for years, he said, adding that an estimated 85% of foreign-born farmworkers came to the US more than 10 years ago.
“We have been really working our best to come up with some type of pathway to citizenship,” he said. “This isn’t an overnight thing. This isn’t something that just happened.”
The current immigration system does not allow for green cards (an ID that shows a person has permanent residency in the US) for farmworkers. Although temporary farm visas — known as H-2A — do exist, there is no legal way to have year-round foreign workers.
Deportations could exacerbate ongoing labor shortages in the food and agriculture sector, and that could ultimately lead to higher prices at the grocery store, economists told CNN.
While proponents of mass deportations have argued that expelling millions of people could help the affordability crisis by curbing demand, that pullback would be overshadowed greatly by the lack of worker supply, economists said.
And there’s little appetite among native-born workers to fill those roles, said Farmworker Justice’s Estrada, who noted a case study of a 2011 effort from the North Carolina Growers Association to hire 6,500 farmworkers. Nearly 270 native-born North Carolinians applied, 245 were hired, and only seven lasted the harvest season.
“Few, if any, American workers are willing to take on these farmworker jobs,” Estrada said. “This plays out in just about in every state.”
Looking past the rhetoric for hope
While businesses and others are sounding the alarm about the potential for stark labor shortages and economic risk, one has to go back only a couple of years to see how labor shortages hindered the economic recovery.
“We lived it,” said Sanchez, the Chicago restaurateur. “There was no labor force. Everybody was collecting $1,000 a week for a year and a half. People were traveling around the world, and people refused to come to work.”
The pandemic leveled in-person industries, and the restaurant sector was among the hardest hit, losing millions of jobs overnight.
While unemployment benefits were extended to affected workers, the demand for workers outstripped the supply for a variety of reasons, including health and safety concerns, caregiving needs and people switching careers.
Still, it took years for the restaurant industry to return to its pre-pandemic job totals.
When the economy was reopening, Sanchez said that restaurants could only operate for “two days, three days a week, because there was no labor force.”
And the labor force that was there and willing was mostly people who could not collect unemployment, he said.
“We know [undocumented immigrants] are working, they’re not sitting at home,” he said. “They’ve been working for 30, 40 years here and paying taxes.”
And some of those immigrants, he said, are looking past the rhetoric on the campaign trail and are optimistic that the new administration could create a pathway to citizenship when that was not accomplished during the Biden administration.
“That’s why you saw so many of the Hispanic and Latinos overwhelmingly voted for President-elect Trump, because I think they believe that he can pass a law,” Sanchez said.
Big impacts, bigger unknowns
Earlier this year, the Congressional Budget Office upwardly revised its population growth estimate, citing strong net immigration. The CBO estimated that net immigration was 2.6 million and 3.3 million people in 2022 and 2023, respectively, which far outpaced the 2010-2019 average of 900,000 people per year.
While the increase in immigration was a key factor behind strong income and output growth as well as robust homebuilding activity and government spending, the surge likely hasn’t had a first order effect on inflation, because they added both to labor supply as well as consumer demand, wrote JPMorgan economists earlier this year.
If immigration flows were to return to pre-2020 levels, it likely would result in 100,000 fewer jobs added per month, said Michael Feroli, chief US economist at JPMorgan.
“The slowing in immigration that’s broadly anticipated will probably show up in tighter labor markets for lower-skilled workers,” he said in an interview.
A bigger unknown is trying to estimate the impact from deportations, he said.
“First of all, we should also keep in mind that deportations aren’t going from zero to X; they’re going from a substantial number to that number plus X,” he said. “There’s an issue of how quickly can that get ramped up, just given the constraints and the backlog from the immigration courts.”
Grand deportation plans
So as it stands now, Feroli doesn’t expect deportations to materially impact the labor market in 2025.
Deportations won’t come without costs — both the billions of dollars estimated to fund efforts but also economically, research shows.
Julia Pollak, chief economist at employment site ZipRecruiter, noted studies that show how deportations can reduce employment and earnings among native-born workers. As such, enforcement could play out differently from state to state, she said.
“Of course, some states and cities will publicly resist federal efforts and declare themselves sanctuary states or cities,” she said. “But there will be quieter, less advertised differences, too. Places with more acute labor shortages where employers view unauthorized immigrants as a valuable resource tend to have weaker enforcement.”
Still, it’s simply too early to tell what the administration may end up doing, said Joe Brusuelas, chief economist at RSM US.
“The first Trump administration can be very useful as a benchmark,” he said. “Many times what we ended up getting were essentially PR stunts in which small changes were made and then big victories were declared. … There will be some people who will be forced to go back to their countries of origin; but at one point, it will prove too difficult, too expensive, victory will be declared and then move on to another policy.”
Members of the Trump transition team did not directly address CNN’s questions about immigration-related plans and economic outcomes but provided the following statement:
“President Trump will marshal every federal and state power necessary to institute the largest deportation operation of illegal criminals, drug dealers, and human traffickers in American history while simultaneously lowering costs for families,” Karoline Leavitt, spokeswoman for the Trump-Vance Transition team, said in an emailed statement. “The American people re-elected President Trump by a resounding margin giving him a mandate to implement the promises he made on the campaign trail, like deporting migrant criminals and restoring our economic greatness. He will deliver.”
‘I don’t think he will be able to survive’
As uncertainty looms, fear persists, whether it’s in Chicago’s Little Village; Springfield, Ohio; or New York City, where Joanne Eriaku, a single mother and owner of three businesses is still “waiting and waiting” after seven years in asylum processing after fleeing Uganda.
Eriaku, who has a degree in communication and a Masters in knowledge management, was for many years a serial entrepreneur in Kenya. She was eventually recruited by the United Nations, where she spearheaded a financial inclusion project in Uganda.
However, Uganda became increasingly dangerous for her and her two boys, so she sought asylum in the United States, where she quickly tried to find safe housing, employment and a means to become a citizen.
“I had to set aside all my degrees and the grandness of all I used to be with the UN; it was just about I need to make sure I do what I need to do for my boys,” she said.
Once she was provided with a Social Security number, she hopped back into the serial entrepreneur zone and now runs three businesses, two e-commerce stores and a small business consulting firm.
Despite building a life here, Eriaku said she’s worried about what the future may bring, especially for her sons.
“There are different types of immigrants here, and my fear is that we are all getting bunched up into this undocumented immigrant bucket, despite the fact that there is nuance to it,” she said.
“Another part is that I came here with children who were way (younger) than 16; when my son hits 21 next year, he has to apply (for asylum) on his own.” she said. “I really want him to finish school. I really want him to be a man and be able to stand on his own.”
She added: “I don’t think he will be able to survive being deported back to (Uganda).”
CNN’s Matt Egan contributed to this report.
