Which Industries Are Most Vulnerable to Trump’s Immigration Crackdown?

President Trump’s recent push to crack down on immigration has sparked concerns across various sectors of the U.S. economy. While his administration explores measures to ease consumer prices, experts warn that stricter immigration policies could unintentionally exacerbate inflation and harm businesses by reducing the labor force.

Immigration and Its Economic Impact

The U.S. workforce relies heavily on immigrant labor, with undocumented immigrants making up about 5% of the total workforce—roughly 8.3 million people, according to the Center for Migration Studies. A reduction in this labor pool could drive wages upward, leading to inflationary pressures, especially in industries dependent on immigrant labor.

“A reduction in labor supply means upward pressure on wages, which has different sector implications including inflationary pressure, especially for food prices,” said Stephen Brown, deputy chief North America economist with Capital Economics.

David Bier, director of immigration studies at the Cato Institute, echoes these concerns, warning that labor shortages could hinder production in key industries. “If jobs are left open and production is unable to keep up with demand, that’s going to lead to higher prices,” he said.

Agriculture: A Key Sector at Risk

The agriculture industry is particularly vulnerable to immigration crackdowns. Undocumented immigrants account for about 20% of its workforce, a figure that rises to nearly half for certain specialty farms. The labor-intensive nature of harvesting delicate fruits means that mass deportations could lead to significant price hikes in fresh produce.

“The inflationary impact could affect food overall, but particularly fresher fruits, rather than the ingredients in more processed foods,” Brown noted.

Construction and Home Renovation

Construction and related fields, such as home renovations and landscaping, also depend heavily on immigrant labor. A reduced labor force in these industries could lead to higher costs and delays in projects.

“Prices for home improvement projects might become unaffordable, and the lack of supply will be a big issue,” Brown said. The ripple effect could also impact legally employed workers in supervisory roles.

Restaurants and Food Services

Restaurants and food service businesses, which employ a significant number of undocumented workers, face similar challenges. A labor shortage could force businesses to raise wages, driving up menu prices and potentially alienating customers.

“They don’t necessarily have the ability to bid up wages, so it might be that those places just shut down because they don’t have the labor,” Brown warned.

Broader Economic Ripple Effects

The impact of immigration restrictions could extend beyond specific industries. Julia Gelatt of the Migration Policy Institute highlights the interconnected nature of the workforce, noting that some jobs, such as farming, are difficult to fill even with higher wages.

“Removing large numbers of immigrants would drastically reduce the labor force, which could lead to rising wages, but potentially just higher prices for food, building and repairing homes, hotel stays, and more,” Gelatt said.

Bier also pointed out that eliminating undocumented workers could undermine the jobs of American-born supervisors and managers. “The economic effects are going to be much more diffuse than people expect,” he said.

Conclusion

As the Trump administration continues its push for tighter immigration policies, the potential economic consequences are becoming increasingly apparent. From agriculture to construction and hospitality, industries reliant on immigrant labor may face labor shortages, higher costs, and inflationary pressures. The broader effects on the U.S. economy remain uncertain, but experts caution that the repercussions could be far-reaching and complex.