Mass Deportations Drain Economic Growth

When even the Wall Street Journal editors tell you that mass deportations are bad for the economy, you can count on it. Not that you had any doubts.
Their editorial reports that the devastating impacts of President Donald Trump’s mass deportations are not confined to immigrants but spread across the economy.
It is important to recognize the unstated conclusion that follows from their editorial. More undocumented immigrants entering the United States is good for the economy, and the U.S. economy relies on that immigration to prosper. Unlike the editors, the study by the Dallas Federal Reserve Board (the Dallas Fed), which is the source of the editors’ data, doesn’t shy away from that conclusion. Its authors write that “Our estimates show that an unexpected increase in net unauthorized immigration raises U.S. output growth for about two years but has almost no effect on inflation.”

Deportations, or “interior removals” as the Dallas Fed study calls them, are not the only thing that have drained the economy; so too have the “reduced immigration inflows at the border,” according to the study. We need to look closely at both deportations and inflows to fully understand the connection between immigration and the U.S. economy.

The Damage Already Done

In 2022, about 11 million undocumented immigrants lived in the United States (2022 is the most recent year for which data are readily available). That was 3.3% of the population. But because undocumented immigrants were more often part of the labor force than were members of the U.S.-born population, they accounted for 4.6% of the employed labor force. The U.S. economy depends on these workers. This August, the Pew Research Center published their preliminary estimate that the number of undocumented immigrants living in the United States increased to 14 million in 2023.

In an earlier Dallas Fed study, Pia Orrenius and Chloe Smith, two of the economists who wrote the 2025 study that the Wall Street Journal editors praised in their editorial, put it this way, “The economy expands with growth in the labor force and its productivity.” They warned that, “Absent offsetting increases in productivity growth, less immigration will, therefore, translate directly into slower gross domestic product growth.”

This July, a White House spokesperson told reporters, “there is no shortage of American minds and hands to grow our labor force.” But the data say otherwise. Over the last 30 years (1994–2024), foreign-born workers accounted for over half (53.2%) of the growth of the U.S. labor force, and a whopping 88.3% from 2019 to 2024, according to the National Foundation for American Policy (NFAP).
Since 2023, net immigration (the number of immigrants who enter the country less the number of emigrants who leave the country) has fallen sharply. A San Francisco Federal Reserve study projects that net immigration in 2025 will be one million to 1.6 million, less than half of the 3.5 million net immigration level in 2023. An American Enterprise Institute study foresees net migration possibly coming to a halt, falling to somewhere between -525,000 and +115,000 in 2025.
That decline alone does real damage to the U.S. economy. The construction and agricultural industries are especially reliant on undocumented workers. In 2022, undocumented workers made up 13% to 14% of their workforce. That included one-third of plasterers, stucco masons, drywall installers, ceiling tilers, and roofers, and one-quarter of construction laborers, agricultural graders, agricultural sorters, and agricultural laborers.

Domestic work—especially housecleaning, childcare, and home care—is also reliant on undocumented workers. A study completed by the University of Chicago Crown Family School of Social Work, Policy, and Practice found that 22% of undocumented immigrants work in private households. A 2021 National Bureau of Economic Research study calculated that a 10-percentage-point increase in the immigrants with less than a high school education in a given geographic area reduces the probability someone 65 years or older would live in a nursing home or other institutional setting by 29%. And the NFAP reports that, “A lack of workers has shuttered nursing homes in rural areas and impeded energy projects, home construction and remodeling.”

Lower immigration also reduces the likelihood that increased productivity can offset the economic impact of a smaller immigrant population. Over the last 20 years, the foreign-born share of the U.S. labor force with graduate degrees has nearly doubled, increasing from 11.1% in 1994 to 21.6% in 2024, according to the NFAP. Today, more than half of STEM degrees awarded by U.S. universities go to international students. And an Economic Innovation Group study estimates that between 2000 and 2018, “immigrants authored or co-authored 30% of patents within U.S. industries that are important for economic and national security, from semiconductors to automobile manufacturing to software development.” What’s more, a Harvard Business School study found “that immigrants account for 30% of all U.S. innovation from 1976 to 2012,” even though immigrants accounted for only 17% of “the total inventor workforce.” As these figures suggest, lower immigration would surely slow innovations and the productivity gains based on those innovations.

“Interior Deportation” Devastation

The damaging economic effect of reduced immigration into the United States at the U.S.-Mexico border is the starting point of the 2025 Dallas Fed report that is the focus of the Wall Street Journal editorial. It finds that “Reduced immigration inflows at the border, not deportations, account for most of the negative effect on GDP growth.”

The study goes on to calculate the reduction in economic output (measured as Gross Domestic Product, or GDP) when two different “interior deportation” scenarios are added to the effect of reduced immigration inflows on economic output:

It’s hard to say. Just how much damage Trump’s deportation plans will inflict depends on how many undocumented immigrants he manages to deport. Deporting the undocumented population is an expensive undertaking. The undocumented population is about seven times larger than the 1.9 million people who were in U.S. prisons and jails in 2022. A 2024 study from the American Immigration Council puts the price tag of a one-time mass deportation of all undocumented residents at at least $315 billion. And that figure does not include the long-term costs of a sustained mass deportation operation or the interim step of mass detention.

Trump’s One Big Beautiful Bill, signed into law on July 4, doubled the budget of the Department of Homeland Security. Much of that $170 billion will go to ramping up federal Immigration and Customs Enforcement (ICE) operations. The Trump administration now pledges to remove one million individuals living in the United States without legal status each year.

Deportation raids have already disrupted employment. In April, the U.S. Border Patrol raided Pleasant Valley Farms, the largest dairy farm in Vermont, taking away undocumented immigrant workers. Vermont’s farm economy depends on immigrant workers, including the undocumented. In July, ICE raided Glenn Valley Foods, a meatpacking company in Omaha, Neb., and took half of its workers. Production dropped by nearly 70% after the raid. In June, ICE arrests averaged 1,224 per day.

Still, Trump has pledged to launch “the largest deportation program in history.” During his 2024 campaign, he repeatedly promised to deport between 15 and 20 million people, a number that far exceeds the number of undocumented people who are currently in the United States. The economic effects of such a program would be catastrophic. The American Immigration Council study estimated that deporting all 11 million undocumented immigrants who were in the country in 2022 (plus the additional 2.3 million people who have crossed the U.S. southern border without legal immigration status and were released by the Department of Homeland Security from January 2023 through April 2024) would cause the economy to crash. Between 4.2% to 6.8% of U.S. GDP, or $1.1 trillion to $1.7 trillion in 2022 dollars, would be lost. (For reference, some 4.3% of output was lost in the Great Recession between 2007 and 2009.) Deporting the undocumented population in 2022 would have removed 1.5 million workers in construction, 224,700 workers in agriculture, about one million workers in hospitality, 870,400 workers in manufacturing, as well as many more workers in additional sectors.

Deporting undocumented workers would also open up a gaping hole in the federal government’s tax revenues. The American Immigration Council study also found that if all 11 million undocumented immigrants had been deported in 2022, U.S. tax revenues would have fallen by $46.8 billion a year, and state and local government tax revenues would have decreased by $29.38 billion a year.

The federal social safety net would also be hard hit. In 2022, undocumented households paid $22.6 billion in taxes that fund Social Security and another $5.7 billion in taxes that fund Medicare, even though they are often not eligible to collect those benefits. The loss of these payments would become especially painful as the U.S.-born population ages.

There Is No Tradeoff

The Wall Street Journal editors worry that the Trump administration will crank up the mass deportation of undocumented immigrants to levels where the economic losses become prohibitive. But the studies by the Dallas Fed and the American Immigration Council have made it clear that reducing undocumented immigration below historical trends, by whatever amount, is unambiguously bad for the economy. And it’s a human catastrophe for undocumented immigrants and their families.

We need to put an end to Trump’s policies of closing down the U.S.-Mexican border and deporting the undocumented. And the undocumented immigrants who do the hard work that fuels the economic growth of the United States should be granted legal status, not deported. Providing a pathway to legal status would reduce the undocumented population and improve their lives, so they, too, can insist on their rights at work, on boosting the minimum wage, and on passing legislation that makes it easier for all workers to organize unions.

JOHN MILLER is a professor emeritus of economics at Wheaton College and a member of the Dollars & Sense collective.

Sources: Pia Orrenius, Grace Ozor, Madeline Zavodny, and Xiaoqing Zhou, “Declining immigration weighs on GDP growth, with little impact on inflation,” Dallas Fed Economics, Federal Reserve Bank of Dallas, July 8, 2025 (dallasfed.org); Pia Orrenius and Chloe Smith, “Without immigration, U.S. economy will struggle to grow,” Dallas Fed Economics, Federal Reserve Bank of Dallas, April 9, 2020 (dallasfed.org); “Mass Deportation: Devastating Costs to America, Its Budget and Economy,” American Immigration Council, October 2024 (americanimmigrationcouncil.org); “Immigrants and America’s Labor Force Growth,” NFAP Policy Brief, National Foundation for American Policy, October 2024 (nfap.com); Wendy Edelberg, Stan Veuger, and Tara Watson, “Immigration Policy and Its Macroeconomic Effects in the Second Trump Administration,” AEI Economic Perspectives, July, 2025; Evgeniya Duzhak, “Updated Estimates of Net International Migration,” SF Fed Blog, Federal Reserve Bank of San Francisco, July 17, 2025 (frbsf.org); Katie Johnston, “Trump’s immigration crackdown could cause widespread workforce disruption,” Boston Globe, August 10, 2025 (bostonglobe.com); Josselyn Andrea Garcia Quijano, “Workplace Discrimination and Undocumented First-Generation Latinx Immigrants,” University of Chicago, Crown Family School of Social Work, Policy, and Practice (crownschool.uchicago.edu); Kristin F. Butcher, Kelsey Moran, and Tara Watson, “Immigrant labor and the institutionalization of the U.S.-born elderly,” National Bureau of Economic Research, Working Paper 29520, November 2021 (nber.org); Paul Bean and Guy Page, “BREAKING: Feds raid biggest dairy farm in Vermont, arrest migrant workers,” Vermont Daily Chronicle, April 22, 2025 (vermontdailychronicle.com); Eli Shaw (visuals Erin Schaff), “ICE Took Half Their Work Force. What Do They Do Now?” New York Times, July 27, 2025 (nytimes.com); Jeffrey Passel and Jens Mauel Krogstad, “U.S. Unauthorized Immigrant Population Reached a Record 14 Million in 2023,” Pew Research Center Report, July 21, 2025 (pewresearch.org); Shai Bernstein, Rebecca Diamond, Timothy McQuade, and Beatriz Pousada, “The Contribution of High-Skilled Immigrants to Innovation in the United States,” Harvard Business School Working Paper, 22-065, December 1, 2021 (hbs.edu).