“If you are residing illegally, pack your bags, because you are going home.” JD Vance’s remarks sum up one of Donald Trump’s big promises: to massively deport all immigrants without residency permits, as well as increase restrictions on refugees and other groups. Estimates indicate, at least, that 11 million people affected who could be forced to leave the United States. The economic impact could be equivalent to the 2008 financial crisis.
Although attention in recent weeks outside the United States has focused on the new Trump administration’s predictable tariff war, there is a greater concern in domestic politics: the forced departure of millions of people could have harmful consequences. negative impact on employment, prices and GDP of the American economy.
Equivalent of the 2008 crisis
Reducing the working and consuming population in the United States by 11 million people (plus possibly another 3 million listed as refugees) would not be free. Estimates vary among companies that have analyzed the impact: Capital Economics estimates a reduction in annual GDP growth of at least one percentage point. According to a report cited by EFE from the American Business Immigration Coalition, losses could be between 1.1 and 1.7 trillion dollars (1.04 and 1.61 trillion euros), the equivalent of reduce US GDP from 4.2% to 6.8%more than during the 2008 crisis.
By expelling millions of people, direct consequences would be visible on the labor market and prices. The Peterson Institute estimates that, in the base scenario, it could increase price rates to growth between 4 and 7% in 2027, in addition to warning of the loss of economic initiative and dependence increasing with regard to strategic sectors.
This increase in prices would be due to the increase in wages to compensate for the lack of labor. Capital Economics estimates that four-fifths of job growth The American situation in recent years was due to immigration, which limited the effects on inflation and unemployment. The Congressional Budget Office estimates that increased immigration has led to an increase in federal revenue of up to $900 billion.
Impact on services and cities
The effects of the drop in the immigrant population would imply pressure on labor-intensive sectors such as hospitality, construction, agriculture or social and health services. The reduction in the number of available immigrants would result an increase in wages to attract other segments of the populationaccording to Capital Economics. The consequence would be an increase in prices.
Brookings suggests that the impact would not be equitable, since the immigrant population is concentrated in large cities. Border states with a great capacity for economic attraction such as California, Florida or Texas would be the most affected.
Administration cost
The American Immigration Council estimates that the cost to the state of organizing detentions and deportations, as well as restrictions on legal immigration pathways, would mean spend 88 billion dollars per year (83 billion euros). Given Trump and Musk’s announcement to cut government spending, this would mean a significant increase in government spending, on top of the predictable drop in tax collection due to the shutdown of the economy.
