The deportation economy is backfiring on American workers, top economist warns

The Trump administration's aggressive deportation efforts may be inadvertently harming American workers, warns top economist Diane Swonk. Despite the unemployment rate dropping, the economy lost 23,000 jobs in the latest month, as shrinking workforce numbers played a role. Sectors such as healthcare, social assistance, and construction, which heavily rely on immigrant labor, have experienced job declines.

In 2022, 28% of direct care workers in the U.S. were immigrants, a number that has risen from 21% in 2011. As the aging population demands more long-term care positions, the loss of roughly 200,000 temporary protective status holders in October, along with 400,000 Venezuelan workers, could lead to a labor shortage. This comes at a time when state-level Medicaid cuts are adding to the financial burden for employers.

The unpaid care provided by family members is estimated to be worth $1 trillion annually, with 59 million Americans dedicating an average of 27 hours per week. The loss of paid caregivers could push more Americans into unpaid care, further shrinking the labor force and failing to register as unemployment. Bill Adams, chief U.S. economist at Fifth Third Bank, notes that immigration's role in compensating for the aging workforce has diminished.

In construction, where immigrants make up 26.3% of the workforce, larger ICE enforcement led to employment declines among U.S.-born workers, suggesting that native-born workers do not easily replace immigrant labor. This interdependence of foreign-born and native-born workers highlights the interconnectedness of regional economies.