Millions of jobs. Billions in output. A key driver of the US labour market for over two decades will be shaken up.
The Biden-era approach to immigration left room for labour force participation and tax contribution from undocumented immigrants. The Trump administration is moving in the opposite direction, that is mass deportations.
Backed by as much as $175 billion in new funding, the administration is building what officials describe as a tech-powered, private-sector-driven “deportation machine.”
The scale of disruption is measurable, and far more significant than most political rhetoric suggests.
How much labor does the US actually stand to lose?
According to a report by Baker Institute, the US is home to an estimated 11 million undocumented immigrants. Around 8 million of them are working. They make up 3.3% of the population and nearly one-fifth of the foreign-born labour force.
Those numbers may seem modest at the national level, but their concentration in key industries is what makes them economically significant.
Agriculture is the most exposed. Over 41% of all farm workers are undocumented. In the broader food supply chain, roughly 1.7 million workers fall into this group. On an absolute basis, the construction sector is the largest employer of undocumented workers, making up 14%, according to a recent report by Oxford Economics.
Source: Oxford Economics
In states like California and Texas, immigrants make up 40% of the construction workforce. Across the country, 14.2% of construction workers are undocumented.
Manufacturing employs another 870,000 undocumented immigrants. Hospitality holds around 1 million. Transportation and warehousing add 461,000 more. These numbers are not easily replaced.
The US is already facing labour shortages. In 2023, there were 3.2 million job openings the market could not fill.
As fertility rates drop and the population ages, immigration has been the main force sustaining labour supply. Deporting a sizable chunk of the undocumented workforce would reverse that trend.
Can businesses adjust, or would prices spike?
Not every industry can simply raise wages and move on. Some operate on thin margins. Some face global competition.
In agriculture, for instance, wages make up a large share of costs, and productivity gains are slow. Prices at the supermarket would go up, and output may shrink as producers scale back.
Construction faces a different but equally serious challenge. Replacing workers takes time. Laborers may be less skilled than subcontractors, but they are essential.
Wage growth in construction already outpaces the broader economy. Hourly earnings rose 4.4% in Q4 2024, a full percentage point above pre-COVID averages.
The National Association of Home Builders estimates that labour makes up nearly 25% of the cost of a new home. With fewer workers, costs rise, projects get delayed, and housing becomes less affordable.
Oxford Economics estimates that deporting half of the undocumented construction workforce would cut sector growth in half through 2028.
That means over $55 billion in lost output. Efforts to replace labour with automation won’t work fast enough. Construction has seen some of the lowest productivity growth in the economy for decades.
What about the bigger picture: GDP, inflation, and taxes?
Studies project that mass deportations could reduce GDP by 2.6% to 6.2% over the next decade. That is a staggering figure in an economy of over $27 trillion.
The pressure would also show up in prices. A 9.1% increase in the general price level by 2028 is one projection tied directly to widespread deportation efforts.
Tax revenues would likely fall. Undocumented immigrants contribute approximately $60 billion annually in local, state, and federal taxes.
Over their lifetime, they contribute $237,000 more in taxes than they receive in benefits. Removing this group shrinks the tax base and pushes up deficits.
Even for US-born workers, there’s little to gain. Past deportation waves did not lead to higher wages. In fact, removing 500,000 immigrants from the labor force could cost native-born workers 44,000 jobs. Fewer workers means less demand across the economy.
Can the deportation machine actually scale?
ICE deported about 271,000 people in FY 2024. In March 2025, monthly deportations dropped to 18,500. That’s well below the target of 1 million per year. So the bottleneck is not policy; it’s capacity.
ICE employs roughly 5,500 field agents. Its planes can carry only about 135 deportees per flight. Its daily detention limit is around 49,000 people.
But Trump’s team is pushing hard to change that. Contracts worth $45 billion have been floated to build new detention centers.
Tent facilities from the Biden era are being repurposed into jails. Funding is being requested to hold over 100,000 people at once.
The private sector is being brought in at scale. According to federal contracts, Palantir received a $30 million contract upgrade to supply ICE with AI-powered targeting and enforcement tools.
Officials are looking to manage deportations with logistics platforms, drawing comparisons to Amazon Prime.
Apparently, “deportation-as-a-service is not just a slogan. It is an operational model in the works.
What does this mean for Mexico and the border?
Mexico stands to feel the economic aftershock. In 2024, it received $65 billion in remittances, representing 3.3% of its GDP.
Many of these transfers come from undocumented workers in the US. Deportations would cut off that stream.
The Mexican government has responded with programs to support returning migrants, but resources are limited. Cuts to consulate budgets and immigration offices raise doubts about implementation.
Trump’s tariff threat further complicates matters. A 25% tax on all Mexican imports could slow trade and push Mexico toward a recession. That, in turn, could drive more people to attempt migration north.
The irony is hard to miss. An economic crackdown on immigration may well fuel the very patterns it aims to stop.
Where does this leave the US economy?
If the goal of mass deportation is to restore jobs and wages for US citizens, the evidence doesn’t support it.
Most undocumented immigrants work in jobs Americans have long avoided. Their removal wouldn’t fill gaps but it would rather widen them.
Labour-intensive industries would shrink. Prices would climb. Housing projects would stall. Tax revenues would fall. The logistics of deporting millions are expensive, slow, and disruptive.
A more economically sound approach would be to fix the visa system, expand legal pathways, and recognize the long-term contribution of workers already here.
For now, the US is heading toward a test of whether it can forcibly reshape its economy without breaking it.
The test is whether the economic engine can keep running with fewer hands on deck. That’s what the current administration is betting on.
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