Economic fallout from Trump mass deportations could eclipse Great Recession: Report

President-elect Trump’s mass deportation proposals threaten to gut the U.S. economy, shrinking growth and the labor force while juicing inflation, according to a report released Thursday by Democrats in the Congressional Joint Economic Committee (JEC).

Sourcing data from the Peterson Institute for International Economics, the report found that deporting 8.3 million immigrants in the country illegally would reduce GDP by 7.4 percent and reduce employment by 7 percent by 2028, likely resulting in zero overall growth throughout Trump’s second term.

Trump has proposed deporting all such immigrants in the United States — currently an estimated 11 million — and millions more currently protected by humanitarian programs such as Temporary Protected Status, who could lack legal status if those programs were cut.

According to an American Immigration Council (AIC) estimate sourced by the JEC report, deporting at a clip of 1 million people per year — echoing a proposal by Vice President-elect JD Vance to “start with 1 million” — could generate a 4.2 percent to 6.8 percent loss in GDP. The U.S. economy shrank by 4.3 percent during the Great Recession, the report's authors noted.

“Trump’s plan to deport millions of immigrants does absolutely nothing to address the core problems driving our broken immigration system. Instead, all it will do is raise grocery prices, destroy jobs, and shrink the economy. His immigration policy is reckless and would cause irreparable harm to our economy,” JEC Chair Sen. Martin Heinrich (D-N.M.) said.

Beyond the economic fallout of mass deportations, the AIC estimates Trump’s plan would cost upward of $88 billion, about four times the budget of NASA.

And the JEC report cites multiple studies that mass deportations are likely to reduce employment for U.S.-born workers by virtue of reducing the country’s customer base, removing a population that’s on average more entrepreneurial and gutting a labor force uniquely qualified to work in certain industries.

Between 4.4 percent and 5.4 percent of the overall labor force is made up of workers who are in the country illegally, and industries such as construction, agriculture, health care and hospitality depend on their labor, according to the report.

Many of those jobs, though categorized as unskilled labor, require specialized training and physical stamina that is not readily available in the existing U.S. workforce.

Livestock farmers, for instance, have long fought to expand the visa process to keep their existing, specialized workforce of immigrants lacking legal status.

“The labor shortages that result from mass deportations would raise costs for all Americans. With unemployment near a historic low, employers in sectors like agriculture and construction would produce less, resulting in shortages and higher prices,” the JEC report reads.

“Economists at the Peterson Institute for International Economics estimate that deporting 1.3 million immigrants would raise prices by 1.5% by 2028, while deporting 8.3 million immigrants would raise prices by 9.1%. Additionally, mass deportations would reduce consumer spending, as undocumented workers are not just workers but also consumers. If demand for certain goods and services slows enough, demand for workers in those sectors may also slow, and some businesses may be forced to lay off workers.”

Yet Trump’s rationale for mass deportations, as explained to Kristen Welker on NBC's “Meet the Press” on Sunday, is that the immigrants “are costing us a fortune.”

The JEC report contests that logic, citing a Brookings Institution report that found foreign-born people pay on average $1,300 more in annual taxes and over a lifetime pay $237,000 more in taxes than they receive in services from federal, state and local governments.

And a New American Economy study cited by the JEC Democrats found that, between 2012 and 2018, the average immigrant contributed $166 more to the Medicare Trust Fund than they received in return. Over that time, U.S.-born residents cost the fund $51 on average.

Immigrants in the country illegally who work pay into Medicare and Social Security but are not eligible to withdraw benefits, a factor in driving the programs’ surplus among the group.

Heinrich, who has pushed for immigration reform, won reelection to a third term in November.

“As a son of an immigrant, I know how hard immigrants work, how much they believe in this country, and how much they’re willing to give back. They are the backbone of our economy and the driving force behind our nation’s growth and prosperity,” he said.

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