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By: Dr. Alejandro Diaz-Bautista, Economist and Researcher (PhD).
President Trump’s mass deportation policies in 2025 could have significant economic consequences. Migrants have a positive impact on economic growth by contributing to the workforce, increasing productivity, and supporting public finances.
Sectors such as agriculture, construction, and hospitality are experiencing labor shortages. For instance, one in five agricultural workers and one in eight construction workers in Arizona lack permanent legal status. The removal of these workers has caused supply chain disruptions and shortages of goods and services.
Labor shortages have increased the costs of housing construction and food production. In Arizona, construction accounted for nearly $33 billion of the state’s economic output in 2023, while agriculture contributed $2.6 billion. The loss of workers in these sectors is driving up prices for homebuyers and grocery shoppers.
The cost of deportation flights is also a concern. Reports indicate that military deportation flights are costing taxpayers around $4,675 per person, which is significantly higher than commercial airline tickets.
Unauthorized immigrants make up a substantial portion of the U.S. workforce, particularly in low-wage, hazardous, and less desirable jobs. Expelling these workers could lead to higher inflation and slower economic growth.
While mass deportations are popular among some voters, concerns remain about their economic impact, especially if families are separated or children who arrived in the United States as minors are deported.
Overall, the economic costs of mass deportations are substantial, affecting multiple sectors and leading to higher prices and labor shortages.
Migrants play a crucial role in economic growth, both in their destination and home countries. They contribute to the workforce, filling essential roles across various industries. In OECD countries, immigrants make up a significant and growing share of the labor force. This helps address labor shortages and supports economic expansion.
Migrants also drive productivity and innovation. They often bring diverse skills and perspectives, which can enhance productivity and foster innovation. Highly skilled immigrants, in particular, can spur technological advancements and entrepreneurial activities.
Immigration boosts both supply and demand in the economy. Migrants increase labor supply, leading to higher production. They also contribute to demand by spending on goods and services, stimulating economic activity.
Immigrants contribute more in taxes and social security payments than they receive in benefits. This positive fiscal impact helps sustain public finances and social services.
Migrants often send money back to their home countries in the form of remittances. These remittances can be a crucial source of income for families and contribute to economic development in their countries of origin.
In the long run, immigration can help offset demographic challenges, such as an aging population, by maintaining a steady supply of working-age individuals.
Dr. Alejandro Díaz-Bautista is a Professor and Researcher in International Economics at Colef. Distinguished member of the National System of Researchers of the National Council of Humanities, Sciences, and Technologies (Conahcyt), now part of the new Secretariat of Science, Humanities, Technology, and Innovation (Secihti)