When federal immigration enforcement raids began in Los Angeles last June, the outcry among local leaders was immediate and pronounced. L.A. Mayor Karen Bass and others slammed the detainments and deportations that ripped families apart. They also cited something else — the economic repercussions of activity by Immigration and Customs Enforcement and other agents in largely Latino areas.
News reports were detailing how the raids, and the fear they fueled, resulted in empty stores in the normally bustling Fashion District, the dearth of customers in Boyle Heights restaurants, and people not showing up for work.
When asked at a press conference that month what she would tell President Trump, Bass responded, “I want to tell him that if you want to devastate the economy of the city of Los Angeles, then attack the immigrant population.” In a video, District 11 Councilmember Traci Park added, “Whether documented or not, they own homes and businesses. They work in every layer of the economy. … They shop in our stores and they pay taxes.”
Since that time, a growing body of research is demonstrating just how significant the economic impacts of the immigration crackdown are — not just in Los Angeles but across California, and potentially the country as a whole.
An integrated economy
There are an estimated 948,700 undocumented immigrants among the 10 million people living in L.A.
County, and 795,000 of them are Latino, according to a comprehensive February report from the L.A. County Department of Economic Opportunity and the L.A. County Economic Development Corporation. Undocumented workers, the report found, contribute an estimated $254 billion in total economic output, or about 17% of the county’s gross domestic product.
A November brief from UCLA’s Latino Policy & Politics Institute highlights the potential reverberations in both blue and red states. Using data from the Census Bureau’s 2023 American Community Survey, it finds that there are 14.1 million Latino immigrant workers across the United States (many have legal residency). Further, it found that in each of the 10 states with the largest Latino immigrant populations—from California to Texas to North Carolina — Latino immigrants participate in the labor force at a higher rate than the overall state population.
Dr. Amada Armenta, director of the LPPI, recognizes that this trend in red states — consider the 74% Latino immigrant worker participation rate in North Carolina, exceeding the overall 63% — may surprise people. But she noted that Latino immigrants have dispersed in recent decades and become part of the workforce across the country.
“Sometimes what we think we know may be from 20 years ago, when it was absolutely the case that most immigrants were concentrated in U.S. border states or places we know of, like California, Arizona, Texas, New York and Florida,” said Armenta, who is also an associate professor in the Department of Urban Planning. But those impressions, she added, are dated, as populations have shifted.
The brief, titled “What the United States Stands to Lose: Latino Immigrant Labor in the Crosshairs,” includes data showing how, even without citizenship, many Latino immigrants contribute to sectors of the U.S. economy. It points out, for example, that in California, 57% of those who work in the agriculture industry — where many jobs are “labor-intensive and physically demanding” — are Latino immigrants. In Florida the figure is a hefty 38%.
Backbone of the service economy
The paper declares that Latino immigrants “form the backbone of the nation’s service economy,” with large numbers of workers cleaning, preparing food and performing additional tasks in hospitals, restaurants and other sectors. Latino immigrants account for 25% of the service occupations in California, and 20% in Florida.
Armenta and the LPPI team understood, even before the raids began, that the mass deportations Trump threatened during his 2024 campaign could hamper the economy of many states. The headline warning what the country “stands to lose” was intentional.
“We are really passionate about changing the way people think about and understand immigration, and particularly immigration enforcement,” she said. “To understand immigration enforcement as something that wrecks economies, and local economies, and immigrants as something that sustains economies. And there’s a lot of empirical evidence that shows this is true.”
Work on the first major report on the subject, the 68-page “The Economic Impacts of Mass Deportation in California,” began after Trump won a second term. Produced by the Bay Area Council Economic Institute in partnership with the University of California, Merced, it was released last June, the same month the raids began in Los Angeles.
Like the other research studies, it includes some head-spinning numbers: Removing the undocumented workforce in California would lead to the loss of $153 billion in direct effects (their wages and the value of their labor). Undocumented workers in California pay more than $23 billion annually in local, state and federal taxes, the report found.
Abby Raisz, a report author and the vice president of Research of the Bay Area Council Economic Institute, recognizes that there is disagreement about what the term “mass deportation” even means. Still, a goal was to demonstrate immigrants’ pivotal role in the working fabric of California, and their importance in sectors such as agriculture and construction. It noted that California’s population of nearly 40 million people includes 10.6 million immigrants, with the 2.28 million who are undocumented accounting for 6% of the population.
It also cited longevity, finding that 63% of the undocumented individuals have resided in California for more than a decade. “Because most immigrants have lived in California for long periods and have extensive experience in their respective industries,” the report found, “they bring critical skills and knowledge to their work, despite taking on jobs often categorized as ‘low skilled.’”
The report examines what would be lost if vast populations were removed or self-deported — it found that 35% of the maids and housekeepers in the state are undocumented, as are nearly 26% of California’s construction laborers. A sizable decline in undocumented agricultural workers would increase costs for businesses, which would be passed on to consumers; it references national studies finding food prices would climb 5%-6%.
“Inflation knows no status,” Raisz said. “Inflation is not going to say, ‘Oh, you’re undocumented, so we’ll punish you, and you’re not, so we won’t.’ Costs are going to rise for every consumer, no matter what your status is.”
Raisz mentioned other points of concern, including the Bay Area Council’s new research into “mixed-status” households, those with both citizens and undocumented individuals (often parents from another country and children born in the U.S.). In these residences, she said, the average income is $117,000, but “if you were to deport the undocumented breadwinner of that household, that would be reduced almost 66%, to $44,000 a year in household income.”
The ripples are extensive — a family might not be able to afford rent, or could have to sell a vehicle, she said. Their neighborhood buying power would be severely curtailed.
Yes, undocumented immigrants pay taxes
That relates to another way that immigrants contribute to the economy — taxes. The report finds that in California, the average undocumented worker pays over $7,000 in annual taxes, and it extends beyond that to what is taken out of paychecks (which occurs even if someone is not a legal resident).
“Sales taxes are a huge part of it,” said Raisz. “You’re paying sales taxes that go toward infrastructure and public services for all residents, citizens and non-citizens alike.”
She adds, “So obviously that’s going to take a hit when enforcement activity happens.”
When the raids began, the L.A. County Board of Supervisors was one of the governmental entities that sought to determine who was being affected, and to identify what help exists. It directed the County Department of Economic Opportunity to report back monthly. That work culminated in February’s 102-page “Economic Impacts of Federal Enforcement in Los Angeles County.”
Kelly LoBianco, director of the Department of Economic Opportunity, said the findings were not surprising, but rather “underscored what we already knew.”
“This is not just a political or social issue, though it is all those,” she added. “It is a real economic issue that will have ripple effects now into the future.”
Like many others, LoBianco noted that the raids followed the financial hits suffered in the region through COVID-19 and the 2025 wildfires.
A variety of data detail the impacts to date. Surveys and interviews conducted with hundreds of business owners (the L.A. Economic Equity Accelerator & Fellowship, or LEEAF, helped with this) found that 82% were negatively affected by the raids, with many reporting a sizable drop in revenue or customer traffic. Nearly one-third of businesses responded by reducing hours, and 60% were concerned about the ability to maintain their workforces.
The report included a focus on downtown Los Angeles, where large, sometimes boisterous protests of the raids caused a week of nightly curfews. Total losses in the area during June, the research found, “was $312 million in labor income, and $840 million in total output.”
Given the ebb-and-flow nature of the raids — including another burst in January of this year — LoBianco is worried about the cumulative impact, particularly on small businesses.
“What we know about small businesses, as an agency that supports them, [is] that a month or two of destabilization can be the thing that makes or breaks whether or not they can keep the doors open,” she said. The impact is pronounced, she added, because “small business communities tend to hire local, diverse residents, and that means less dollars coming home to families as well.”
In December, the Department of Homeland Security reported that its agents “have made more than 10,000 arrests of illegal aliens” in Los Angeles since June 2025. Although that is only a fraction of the area’s undocumented population, the resulting fear has changed many people’s behavior.
Ripple effects
An analysis of Metro ridership in the county report found 17,000 fewer monthly customers on what were termed “low vulnerability bus lines” during the peak of the raids, evidence that many people were not going to their jobs.
“This sort of absenteeism that’s tied to fear, sometimes rather than actual enforcement, has become one of the largest constraints for employers,” Raisz said.
Others have watched this play out. At a December luncheon hosted by the Los Angeles Current Affairs Forum, City Council President Marqueece Harris-Dawson explained how the threat of raids had altered the daily activity of undocumented Angelenos. He described their thinking as, “I’m not leaving my house to go to movies. I’m not leaving my house to go shopping. I’m not leaving my house to do anything. That impacts the economy of Los Angeles in a devastating way.”
While the pain is being felt across the region, many local leaders are seeking to extend protections and help. UCLA’s Armenta praised the mutual-aid efforts, with politicians and community groups that have responded in Los Angeles, Minnesota and elsewhere. Raisz described the importance of making business owners and leaders part of the “active mobilization” effort and encouraging them to communicate that continued enforcement actions are “going to be bad for business.”
LoBianco said the county has dispensed millions of dollars through a small business resiliency fund and is striving to preserve the safety net. Part of doing that, she said, requires understanding what is actually happening — the research and data lead to the opportunity to provide aid.
“It really helps us better understand what we need to do and what levers we can pull from the county perspective,” she said, “to try to stabilize as much as we can with care.”
