Mass Deportations Are Gutting Local Economies
From farm fields in California to meatpacking plants in Iowa, Trump’s immigration raids are leaving businesses without workers and families too afraid to show up.
WASHINGTON — The Trump administration’s expanding mass deportation operations are sending shockwaves through local economies across the country, according to a new report from the American Immigration Council.
Seven months into President Trump’s term, federal immigration enforcement has ramped up worksite raids, targeting industries from agriculture and construction to hospitality and food service. Instead of focusing on “the worst of the worst,” the administration has swept up delivery drivers, street vendors, farmworkers, and meatpackers. The result, researchers warn, is a labor disruption with far-reaching consequences.
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California Hit Hard
In California, where raids have been especially aggressive, state workforce data shows a sharp drop in participation. From May to June, the total workforce fell by 3.1 percent, while the number of noncitizens reporting to work dropped by 7.2 percent — the steepest decline since the Great Recession. Researchers attribute the decline not only to deportations but also to widespread fear, with many workers avoiding job sites altogether.
The fallout has extended into classrooms. A study of school attendance in the Central Valley, where Border Patrol raids were concentrated, found attendance plunged 22 percent in June.
Broader National Impact
Beyond California, the economic effects are beginning to mount. According to Economic Insights and Research Consulting, construction employment dropped 0.1 percent in the 10 states with the largest undocumented workforce — a stark contrast with the 1.9 percent growth seen elsewhere. Hospitality growth slowed to just 0.2 percent in June 2025, down from 1.5 percent the year before.
Agriculture was hit hardest: farm employment fell by 155,000 workers between March and July 2025, compared with gains during the same period in 2024. Prices for vegetables, beef, and pork climbed at a similar pace, suggesting labor shortages are driving up costs for consumers.
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Businesses in Crisis
Individual communities are feeling the strain. In Ottumwa, Iowa, a meatpacking plant fired 200 workers after Trump revoked their legal status. In Omaha, Nebraska, another plant lost half its workforce after a raid, forcing production cuts as beef prices rise.
In South Florida, a Latino grocery store reported a 20 percent decline in sales. In Los Angeles, immigrant-run food trucks are struggling as customers vanish. A warehouse hub in Edison, New Jersey, shut down for days after an I-9 audit. In New Mexico, a dairy farm raided by ICE had to close temporarily after losing 11 workers.
Employers Left in the Dark
Adding to the confusion, many of the targeted employers had relied on E-Verify, a federal program designed to confirm workers’ legal status. Yet the White House has called businesses that rely on the system “reckless,” leaving small business owners uncertain about how to comply with federal law.
The American Immigration Council warns that if mass deportation operations continue, the early signs of labor shortages, rising consumer prices, and economic instability could escalate into a deeper crisis.
“Employers are being left in the lurch without tools to stabilize their workforce,” the report concludes. “The warning signs are flashing red.”
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