The Trump administration‘s immigration crackdown could pummel California‘s economy, which has come to rely on a surge in migration over the past two decades to boost its growth.
California, which boasts the world’s fourth-largest economy, was hobbled earlier this year by President Donald Trump’s tariffs that cut into traffic at Los Angeles and Long Beach ports. Trump’s recent push to arrest illegal immigrants at their work sites has also hit the state, which was already reeling from devastating wildfires earlier this year.
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“The reality is that the U.S. economy is largely today dependent upon foreign-born labor — and in California, more so,” Nicholas Eberstadt, a political economist at the American Enterprise Institute, told the Los Angeles Times. “For the country as a whole, we’re getting towards 1 out of 5 jobs being filled currently by somebody who was born abroad. In California, it’s more like 1 in 3.”
Agriculture, construction, leisure, hospitality, and health care are all heavily reliant on immigrant workers and could be severely affected by Trump’s ramped-up immigration efforts.
Roughly one-third of California’s restaurant and warehouse workers are foreign-born, according to the outlet’s 2022 Census Bureau analysis. That share climbs to 40% in home health care and child day care, nearly 50% in trucking and lodging, and 60% in landscaping and building maintenance. One of the biggest economic hits will be in the construction industry.
On Friday, Immigration and Customs Enforcement officers and others arrested more than 40 immigrants in a raid targeting four businesses, including day laborers in a Home Depot parking lot in Paramount, California, and at Ambiance Apparel clothing manufacturer. The arrests ignited a weekend of civil unrest in Los Angeles that led to Trump deploying 4,000 National Guard troops and 700 Marines to Los Angeles.
The move is expected to affect workers who show up at places such as Home Depot seeking day work.
Dean Baker, a senior economist at the Center for Economic and Policy Research, said the raids will likely scare off workers from gathering in public places, putting pressure on contractors to find employees.
“This will be a big problem. The question is when does it start to hit,” Baker said. “If you need workers and they aren’t there, that really holds up your site. It’s going to raise costs. In some cases, projects won’t be undertaken. There will be projects they don’t bid on.”
Some day laborers who wore masks to shield their faces told NBC News they were apprehensive about looking for work.
“Everybody is scared about ICE,” one man said, adding that he was “absolutely” worried about his friends and family.
The presence of federal troops has already been felt in the tourism industry, said Jackie Filla, president of the Hotel Association of Los Angeles.
“I’m hearing there have been just significant cancellations all across the city,” Filla said, noting it’s too soon to have hard data. “People are nervous to come to Los Angeles.”
The city and county’s economy has already taken a beating from Trump’s tariffs.
Last month, the Port of Los Angeles processed 25% less cargo than forecast. The neighboring ports of Los Angeles and Long Beach, which processed more than 20 million 20-foot-long cargo units last year, are the largest in the country and provide thousands of jobs for dockworkers, truck drivers, and heavy equipment operators.
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Nearly half of the longshoremen involved with operations have not had work for the past two weeks, said Gene Seroka, executive director of the Port of Los Angeles.
“They haven’t been laid off, but they’re not working nearly as much as they did previously,” Seroka said. “Since the tariffs went into place, and in May specifically, we’ve really seen the work go off on the downside.”