Immigration Policies and Deportation Measures
The US administration has been actively pursuing aggressive deportation measures for illegal immigrants. This trend is not isolated as countries like Italy, France, Germany, and Britain are also reassessing their immigration policies. They are supporting measures such as relocation or deportation of asylum-seekers to address domestic political pressures and potential conflicts.
Economic Implications of Deportation
- Mass deportation proposals raise concerns about significant costs.
- Experts warn of increased inflation and strained growth rates.
- Undocumented immigrants often accept lower wages, which keeps certain industries afloat.
- Employers might need to increase wages to attract American workers, which could hinder the economy.
- Low-skilled labor is scarce in the US but abundant in regions like Mexico and Central America.
Impact on Key Industries
- Undocumented workers constitute a significant portion of the workforce in various sectors:
- 12% in food preparation and serving.
- 19% in maintenance.
- 17% in construction.
- 25% in farming.
- The deportation of undocumented workers could lead to severe labor shortages.
Economic Projections and Costs
- The Petersen Institute for International Economics (PIIE) projected:
- Deporting 1.3 million undocumented immigrants could increase inflation by 0.3% annually.
- It could reduce US GDP by 0.3% annually.
- US GDP may fall between 1.2% to 7.4% below baseline by 2028.
- Deporting all 13.3 million undocumented immigrants is estimated to cost $315 billion.
Human and Social Costs
- Deportation could split 4 million mixed-status families, affecting 8.5 million US citizens, including 5.1 million children.
- 1 million immigrant entrepreneurs, generating $27.1 billion in revenue in 2022, could be deported.
- Undocumented households contribute $46.8 billion in federal taxes and $29.3 billion in state and local taxes.
Overall Economic Impact
- Mass deportation could lead to a 4.2-6.8% annual GDP loss in the US.
- This loss is comparable to the 4.3% GDP shrink during the 2007-09 Great Recession.