If President-elect Donald Trump follows through on his promises to deport millions of people living illegally in the United States, L.A.’s economy stands to lose big.
In addition to creating a gaping void in the labor force, mass deportations could mean less local consumer spending and an increase in the cost of goods.
While the ethical issues related to illegal immigration are hotly disputed among political parties, there is widespread agreement on the part of economists from both sides of the aisle that immigrants are actually a “net plus” for the economy, said Manuel Pastor, a USC professor and director of the school’s Center for the Study of Immigrant Integration.
“The undocumented immigrant population is about $130 billion of our California economy,” said Pastor. If mass deportations are carried out, “everyone predicts a recession as a result.”
New York economic research group Moody’s Analytics concluded in a pre-election report that deporting millions of immigrants, combined with Trump’s other proposed economic policies, likely would sink the country into a recession by as early as 2018.
Of the estimated 11 million immigrants living in the United States without legal status, more than 1 million are in Los Angeles County, according to the Migration Policy Institute. Most of these immigrants are employed in industries such as manufacturing, food services, construction, housekeeping, and elder and child care, said Pastor.
“(They’re) a very important part of the labor force in Los Angeles County in particular,” he said. “They’re an extraordinarily important part of the economy.”
Immigrants living here illegally make up more than 8 percent of the county’s population but are a much higher percentage of the workforce, said Pastor, in large part because there are few undocumented children – most are working adults.
L.A. employers are required to see documentation from workers that proves they’re eligible to work, so it’s likely many undocumented employees operate as independent contractors or work for smaller businesses, said Gary Toebben, chief executive of the Los Angeles Area Chamber of Commerce.
Without these workers, there would be fewer consumers to spend money in the local economy, he said.
The issue could hit particularly close to home in L.A.’s manufacturing industry.
Dov Charney, founder and former chief executive of American Apparel, estimates that more than half of employees who work in light manufacturing in Los Angeles – including apparel, furniture, upholstery, and food processing – are undocumented, though no hard numbers back up his estimate.
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