The Trump administration has offered little consolation to American businesses worried about losing undocumented workers to deportations.
US Agriculture Secretary Brooke Rollins did offer them one solution last week: to replace immigrant farmworkers with Americans who are now required to work in order to access Medicaid benefits, under the recently signed Republican spending bill.
“When you think about it, there are 34 million able-bodied adults in our Medicaid program,” she said Tuesday in a news conference. “So, no amnesty under any circumstances, mass deportations continue, but in a strategic and intentional way, as we move our workforce towards more automation and towards a 100 percent American workforce.”
Unfortunately for the industries targeted in escalating immigration raids — at farms, construction sites, restaurants, hotels, and other businesses — that is not a serious proposal.
Agricultural and hospitality industry leaders are pushing back and raising concerns about how deportations could lead to labor shortages. Though President Donald Trump has appeared publicly sympathetic to those concerns, it’s become clear that business interests aren’t driving his policy.
Rather, it’s immigration hardliners, led by White House deputy chief of staff Stephen Miller and Homeland Security Secretary Kristi Noem, who are. Republicans have handed US Immigration and Customs Enforcement an additional $75 billion, and the agency is more well-resourced than ever as the administration aims for 3,000 immigration arrests per day and 1 million deportations in a single year.
“I have complete faith that Secretary Noem and Stephen Miller and everyone else in the administration is 100 percent committed to this agenda,” said David Bier, director of immigration studies at the Cato Institute, a libertarian think tank.
The conflict between those hardliners and the affected industries reveals a key fiction at the center of Trump’s immigration policy: that masses of immigrant workers are taking away jobs from Americans who are willing and able to fill them. They aren’t. But that hasn’t stopped the administration from ramping up ICE raids that don’t just endanger immigrants and the businesses that rely on them. They’re also imperiling job opportunities and the affordability of goods and services available to all Americans.
Trump’s mixed messages about deportations
Following the ICE raids in Los Angeles that spurred mass protests in early June, some business leaders started becoming more vocal about their fears that worksite immigration raids could upend their companies.
That prompted Trump, at the urging of Rollins, to publicly pledge to work with farming and hospitality businesses to protect their workers and to pause workplace raids for a few days.
“Our great Farmers and people in the Hotel and Leisure business have been stating that our very aggressive policy on immigration is taking very good, long time workers away from them, with those jobs being almost impossible to replace,” Trump wrote on his Truth Social platform in June.
On July 4, he said he would put farmers “in charge” of immigration enforcement when it came to their own businesses, but warned that if they did not do a “good job, we’ll throw [undocumented workers] out of the country.”
In practice, however, it’s not clear that the Trump administration has retreated on immigration raids since then.
ICE carried out a major raid at MacArthur Park in Los Angeles on July 7 and on two California cannabis farms on July 10. At one called Glass House, farmworker Jaime Alanis fell from the top of a greenhouse during the operation and died from his injuries. The New York Times also reported that no business is exempt from worksite immigration enforcement under current ICE policy.
Bier said that he has not put any stock into Trump’s overtures to industry leaders on deportations.
“I said when he first made a statement to this effect that he was not going to change anything about ICE’s operations,” he said.
The fundamental misunderstanding behind Trump’s immigration raids
Immigration hardliners in the Trump administration are operating under the assumption that businesses affected by raids can just hire Americans instead of undocumented immigrants.
In reality, many of those immigrants work jobs that no Americans want — even during times of high unemployment and especially when it comes to low-paid, back-breaking positions in agriculture.
“The idea that there are millions of people waiting around who are willing and able to do this type of farm labor is misguided,” said Tara Watson, director of the Center of Economic Security and Opportunity and a senior fellow at the Brookings Institution.
Bier said some of the best evidence of that is a study of the North Carolina agricultural industry in 2011.
Researchers found that, of the nearly half a million unemployed North Carolinians at the time, only 268 native-born Americans applied for 6,500 farm job openings despite the fact that employers were required to publicly advertise the positions. Over 90 percent of those applicants were hired, but most did not show up for their first day of work or quit within a month. Only seven completed the entire growing season.
Medicaid recipients in particular are even less likely to fill agricultural job openings than Americans overall, despite Rollins’s suggestion to the contrary.
For one, there aren’t actually many Medicaid recipients who don’t already have a job and are able to work at all, let alone able to work a physically demanding job in agriculture. A Brookings study found that out of the roughly 71.3 million recipients of Medicaid, only 300,000 people did not qualify for exemptions to the new work requirements and were not working because they didn’t want to.
“There’s a reason why they’re on Medicaid, and that’s because they’re kids, they’re elderly, or they’re disabled, or they already have a job that just doesn’t provide them with the kind of health insurance that they need,” said Ben Zipperer, a senior economist at the Economic Policy Institute.
Medicaid recipients are also predominantly located in urban areas and aren’t likely to relocate for a low-paid job in agriculture. They are very unlikely to swoop in and save farms hard-hit by immigration raids. The fact that the administration is pushing that fantasy shows that its theory of how its immigration policies will affect businesses and the broader economy is misguided.
The economic cost of immigration raids
Mass deportations of farm workers alone could deal the US a significant blow. It would likely slash domestic agricultural production, driving up food prices for most Americans.
Watson said that farms would find it almost impossible to hire people to do labor that cannot be automated, forcing some to move their production abroad. The US might have to start importing certain crops at a higher price depending on the outcome of Trump’s tariff negotiations. He has already slapped a 17 percent tariff on Mexican tomatoes.
“If the labor supply for farms is greatly restricted, then farms will produce less, and that will be passed on to consumers as higher prices,” Bier, of the Cato Institute, said.
Beyond agriculture, Trump’s immigration raids could actually cause the overall job supply to shrink, rather than creating openings that Americans would readily fill.
A study by the Economic Policy Institute found that, if Trump meets his goal of deporting 1 million immigrants every year of his second term, it would eliminate the jobs of 3.3 million immigrants and 2.6 million US-born workers by the time he leaves office. The job supply in construction would be particularly hard-hit, falling almost 19 percent overall.
That’s because immigrants typically have jobs that complement those worked by Americans, filling job openings that the latter will not, and because immigrants also create jobs as business owners and consumers of American goods and services.
For that reason, deporting immigrant workers who have no criminal record as part of Trump’s “America First” agenda is “just building on a myth that immigrants in the US are ‘taking American jobs,’” Watson said.
“There’s been a huge amount of economics literature suggesting that that’s not the case, and that, in fact, immigrants end up generating more jobs for US-born people,” she said.
