July 22, 2025 - From the July, 2025 issue

Bay Area Council Report on The Economic Impact of Mass Deportation in California

TPR excerpts this latest report from the Bay Area Council Economic Institute on how shifting federal immigration enforcement policies and expanded immigration enforcement could impact California’s economy. With the nation’s largest state economy where immigrants comprise nearly one-third of the population, disruptions in California would reverberate nationwide. Drawing on economic data and stakeholder perspectives, the study analyzes the role undocumented immigrants play in the state and the potential consequences of mass deportation policies. Watch a webinar presentation of the report's findings online, here


A mass deportation policy would also severely disrupt California’s construction industry, which already faces a major labor shortage and relies heavily on immigrant workers – 26% of whom are undocumented and 61% of whom are immigrants. Without undocumented workers, GDP generated by California’s construction industry would shrink by nearly 16%.

Executive Summary This report examines how shifting federal immigration enforcement policies and expanded immigration enforcement could impact California’s economy. With the nation’s largest state economy where immigrants comprise nearly one-third of the population, disruptions in California would reverberate nationwide. Drawing on economic data and stakeholder perspectives, the study analyzes the role undocumented immigrants play in the state and the potential consequences of mass deportation policies.

The following key insights illustrate the potential economic effects on California:

What we stand to lose without California’s immigrant workforce: 

  • Of California’s 10.6 million immigrants, our study found that 2.28 million are undocumented – representing one in five immigrants and 8% of all workers in California. 
  • Based on direct wage contributions alone, undocumented workers generate nearly 5% of California’s gross domestic product (GDP) – a figure that rises to nearly 9% when accounting for the broader ripple effects of their labor across the economy. Undocumented workers also contribute over $23 billion annually in local, state, and federal taxes.

Mass deportation would have uneven impacts across industry sectors:

  • Over a quarter of the state’s agricultural workforce is undocumented, and nearly two-thirds are immigrants of any status. Without undocumented workers, GDP generated by California’s agriculture industry would contract by 14%. 
  •  A mass deportation policy would also severely disrupt California’s construction industry, which already faces a major labor shortage and relies heavily on immigrant workers – 26% of whom are undocumented and 61% of whom are immigrants. Without undocumented workers, GDP generated by California’s construction industry would shrink by nearly 16%.

In interviews, stakeholders shared that businesses and communities across the state are already facing challenges and economic costs due to increased immigration enforcement. There was broad agreement from business and other community leaders for enacting federal policies to provide legalization to undocumented immigrants.

Over the last 30 years, federal policy in the United States has increasingly focused on immigration enforcement – from broadening the grounds for removal to expanding the infrastructure for immigration detention. In California, these federal immigration policies carry particularly significant implications, as immigrants comprise over 27% of the 39 million people living in the state, the highest share of any state in the nation.

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While all recent presidential administrations have enacted some forms of immigration enforcement and control policies, the current administration has made large scale deportation a center piece of its policy priorities: calling for “the largest deportation operation in American history."2,3 This includes proposals to revoke the legal status of many noncitizen groups, expand border control, and enlist local law enforcement in deportation efforts.

Large-scale federal enforcement actions – including proposed mass deportation policies – could trigger widespread labor disruptions with ripple effects felt across the state and nationwide. As shown in Figure 1, immigrants make up more than half the population in key regions – including agricultural centers across the Central Valley and densely populated coastal urban centers like the Bay Area and Los Angeles. These regions are critical drivers of California’s economy and understanding the potential impact of deportation on local, state, and national economies has never been more critical.

Read the full report online, here. 

 

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© 2025 The Planning Report | David Abel, Publisher, ABL, Inc.