Current POTUS Donald Trump’s presidential campaign promised to bring reforms in immigration and build a wall around the Mexican border. But what will happen to the U.S economy if all the immigrants were deported?
With a population close to 319 million people (according to U.S. Census Bureau) only 3.5%, of the entire U.S. population can be categorized as ‘undocumented immigrants’.
First of all, the U.S would see a significant loss in sectors like farming and construction because these sectors employ the most immigrants. But even if U.S born workers are able to replace the workforce, it is unknown whether they will agree to do the work at the current wage.
According to a 2017 Pew Research Center study, there were 11.3 million unauthorized immigrants living in the United States in 2014 and 71%, or 8 million of those 11.3 million, participating in the U.S. labor force. The Bureau of Labor Statistics, however, estimated the percentage to be only 49%.
The U.S. would lose revenue generated by the immigrants who spend money on food, shelter, energy, health, and entertainment (like the rest of the American population). Right now, U.S can provide minimum wage to workers and generate revenue from both legal citizens and undocumented immigrants. But if the immigrants leave, the revenue generated from them spending their incomes will cause a downfall in the U.S economy. U.S. Census Bureau’s latest American Community Survey showed that in 2014 immigrants had almost $927 billion in consumer spending power.
Daniel Costa, the director of immigration law and policy research at the Economic Policy Institute said
If all immigrants were just to disappear from the U.S. workforce tomorrow, that would have a tremendous negative impact on the economy. Immigrants are overrepresented in a lot of occupations in both low- and high-skilled jobs. You’d feel an impact and loss in many, many different occupations and industries, from construction and landscape to finance and IT.
If citizens and legal immigrants are not willing to work at the prevailing wage rate, industries will be forced to boost wages and their product prices will also rise. This gets even more complex if you look at the example of America’s War on Drugs. The war attracted more people into drug trade and increased illegal drug supply as a whole. Similarly, increased wages of industries will attract more immigrant workers to the U.S in the future.
But here’s the other thing: the U.S. economy COULD see a boost in the economy. This will occur if American citizens or legal immigrants agree to work at the prevailing wage rate. Although undocumented immigrants are a huge part of the U.S labor force, they are not filing tax returns due to fear of deportation. So, if citizens replace undocumented immigrants, payment of tax returns could boost U.S. tax revenues.
Truth is, we won’t see the real impact of mass deportation unlil it actually happens. Here’s to hoping that won’t be necessary.