The Trump campaign wants mass deportations of undocumented immigrants. How would that affect small businesses?
One of Donald Trump’s main talking points on the campaign trail has been immigration, with promises to deport millions of undocumented immigrants during his presidency if elected.
With 8.3 million undocumented immigrants in the United States as of 2022, representing 4.8 percent of the workforce according to Pew Research, mass deportation could have a major impact on the workers, small businesses and the economy as a whole.
What Trump is promising
Both Trump and his running mate J.D. Vance’s rhetoric around deportation has dominated many of their rallies and speeches, with the key promise being that deporting undocumented migrants will lower crime, increase the housing supply and increase jobs and wages for working Americans.
“We cannot have an entire American business community that is giving up on American workers and then importing millions of illegal laborers,” Vance argued in an October 2024 interview with The New York Times. “It’s one of the biggest reasons why we have millions of people who’ve dropped out of the labor force. Why try to re-engage an American citizen in a good job if you can just import somebody from Central America who’s going to work under the table for poverty wages?”
Both Trump and Vance argue that by deporting undocumented migrants, the labor pool will open up for unemployed Americans willing to work for higher wages than migrants, bolstering the middle class and allowing more entryways into the unskilled workforce for American citizens.
The campaign has not specified how the deportations will take place, or what criteria they will apply for undocumented migrants that are in the country with protected status, such as those protected under the Deferred Action for Childhood Arrivals, refugees with Temporary Protected Status or otherwise.
How deporting immigrants will impact small businesses
Several economists have warned that deporting undocumented migrants will have a massive impact on industries that rely on migrant labor, especially the construction, agriculture and food service sectors.
With a limited labor pool, businesses may have to reduce their hours, decrease production and turn to other avenues, such as increasing their wages or relying on automation, to fill the gaps. With fewer construction workers, the price of housing and real estate could increase, which could worsen inflation and raise the rent on businesses and tenants.
Undocumented immigrants also disproportionately fill roles in the caregiving industry. According to the Brookings Institute, immigrants make up roughly a quarter of long-term care workers. While the industry is known for difficult working conditions and low pay, it is essential for supporting the overall economy. Without access to affordable care work, many employees in the US would be forced to either cut hours to quit the workforce entirely to care for elderly parents and children. Should a mass deportation of undocumented workers happen, the fallout could worsen ongoing issues such as the childcare shortage.
Additionally, undocumented immigrants contribute to the consumer economy. Just like anyone else living in the U.S., they spend their money at restaurants, grocery stores, clothing retailers and e-commerce shops. If these consumers are deported, businesses will see a decrease in sales.
Bankrate’s expert take on deporting illegal immigrants
“Widespread deportations as threatened could be disastrous at a number of levels, negatively impacting consumers, some of whom are immigrants, and the workforce which is dependent upon them as well,” says Mark Hamrick, senior economic analyst for Bankrate. “One of the reasons that the United States job market has been able to normalize over the past couple of years has been because of immigration, leading to the recent situation where the number of job openings relative to unemployed is about 1.1 to 1, down from the days of the red hot job market when the ratio was 2 to 1.”
Deporting undocumented migrants: The pros
- Potentially opening up the labor pool for American workers.
- Increasing wages and labor force participation for American citizens, giving them more money to spend.
- More entryways for unskilled workers to work their way up the ladder, increasing the American labor force.
Deporting undocumented migrants: The cons
- A decrease in demand for businesses with an immigrant-heavy clientele.
- Labor gaps and shortages due to workers being deported, impacting the availability of goods and services.
- A shortage of supporting roles that allow American workers to participate in the labor force.
The bottom line
Immigration is a hot-button issue this election cycle, and the Trump campaign’s rhetoric has fueled much of the discourse. In a tough economy, it’s understandable that many American workers would like to see less competition for jobs and would like increased wages. However, a mass deportation of undocumented workers could have less obvious side effects and put strain on many sectors of the economy. With all that said, immigration is an issue that many Americans feel strongly about, and it will continue to be a focal point of public debate regardless of who wins the presidency in November.
