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San Francisco Chronicle
23-06-2025
- Politics
- San Francisco Chronicle
Mass deportations could cost California in these surprising ways
As the federal government ramps up deportation efforts, a new study by Northern California researchers sought to quantify how much mass deportations would cost the state by measuring undocumented immigrants' economic contributions. The study, conducted by researchers at the San Francisco think tank Bay Area Council Economic Institute and UC Merced, projected that mass deportations of California's almost 2.3 million undocumented immigrants could cost the state's economy $275 billion through a loss of labor, economic output, small business job creation and consumer spending among other impacts. The Trump administration says it wants to deport an estimated 11 million undocumented immigrants who live in the United States to secure borders against immigrants who have committed crimes and because unauthorized immigrants are a drain on public resources, although people in the country illegally are generally ineligible for federal benefits. Still, Trump initially struggled to get his agenda off the ground, with the number of deportations relatively flat before beginning to climb in March through May, partly because fewer people were nabbed at the border. Immigration arrests and detentions have spiked from January to May, however. Anti-immigration advocates have argued that a large supply of undocumented labor depresses wages for some American workers, although there is substantial disagreement about the extent to which that's true. Supporters of immigration argue that undocumented laborers tend to take jobs Americans don't want, especially seasonal farmwork. The report does not answer the question of whether undocumented immigrants cost the country more than they contribute to it. But it found that undocumented immigrants in California are more likely to be working age and employed than native-born residents, with an estimated 72% working compared to 67% for U.S.-born residents. About 1.5 million undocumented immigrants work in California, constituting 8% of the state's workforce, the study estimated. There is no official count of undocumented immigrants in the U.S. As such, researchers, including in this study, use what's called the 'residual method' to estimate it. That involves subtracting the estimated legally present foreign-born population in the U.S. from the total foreign-born population counted by the U.S. Census Bureau to get an estimated unauthorized population. Used by the Department of Homeland Security for its official unauthorized population statistics, as well as research organizations Pew Research Center and the Migration Policy Institute, the method is generally accepted as the best way to estimate these populations. The Bay Area Council Economic Institute is the research arm of the Bay Area Council, an advocacy organization for businesses across the Bay Area. Dennis Feehan, a UC Berkeley demographics professor and quantitative social science methodology expert, reviewed the report's methodology and said the methods used seemed reasonable and typical of this kind of work, although he said it is challenging to estimate the size of the undocumented population. The researchers inferred that someone was likely present legally if they met certain criteria such as being born abroad to American parents, being employed in military or government positions, receiving government assistance such as food stamps or working in some jobs requiring professional licenses, such as engineers or nurses, explained the Institute's research director and report co-author Abby Raisz. The undocumented immigrant population estimate includes both immigrants present without any kind of legal authorization and those with temporary legal protections that could be revoked, such as beneficiaries of the Obama-era program Deferred Action for Childhood Arrivals and Temporary Protected Status, which is given to nationals of certain countries. The researchers measured economic impact in three main ways: First, the direct impact through wages that undocumented workers earn and goods and services they produce. Second, indirect impact such as when employers purchase materials used by undocumented labor. Third, induced impact through consumer spending. Researchers said undocumented workers generate 5% of the state's overall economic activity through their labor, a number that rises to 9% after factoring in ripple effects of their spending and labor. 'We have been reliant on immigration as a source of population growth and driver of labor force growth for many years,' Raisz said. The report found that California would have lost 85,000 people last year if not for immigration. The state instead gained about 40,000 people. 'One thing I want to drive home is how embedded folks are in the state and communities,' Raisz said, pointing to the report finding that almost half of undocumented immigrants in California have been in the U.S. for more than 20 years. The study found that almost 11% of all small businesses are owned by undocumented immigrants. Undocumented immigrants also pay an estimated $10.6 billion in state and local taxes annually and almost $13 billion in federal taxes, the report stated, despite being excluded from most federal benefits. The economic impact of deportations won't be equally felt. It'll be most acute in regions with a greater share of undocumented immigrants — including the Bay Area, San Joaquin Valley, Inland Empire and Los Angeles — and in industries reliant on undocumented workers including housekeeping, agriculture, construction, food service, warehousing and manufacturing. 'Those are pretty staggering numbers,' Raisz said. 'If we lose this workforce, we're not harvesting crops, we're not building homes. These are things we need to survive as an economy and a society.' Maria-Elena De Trinidad Young, an assistant professor of public health at UC Merced who co-wrote the report, said that the economic costs of mass deportation don't just come from the removal of individuals from the U.S. It also comes from absenteeism from schools and work and the loss in productivity due to fear after immigration raids on workplaces, she said. That same chilling effect can apply to people going out to eat or heading downtown, Young said, thus reducing spending and economic activity. 'The term mass deportation leads people to think we're going to see one big workplace raid,' she said. But, she said, 'these economic hits would be the cumulative effect of lots of small enforcement actions… Overall, we stand to lose a lot because of increased enforcement even if we don't see it immediately happening in our backyard right now.'
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First Post
18-06-2025
- Business
- First Post
At $275 bn, Trump's deportation plan could cripple California's economy, spike food prices
Deporting undocumented immigrants could cost California $275 billion, shrink the workforce by 8% and drive food prices up by 9% — with ripple effects nationwide. read more The photograph shows special agents with Homeland Security Investigations leading a worker away from a workplace raid in Ohio in 2018, part of a string of such operations during the first Donald Trump administration. (Photo: Immigration and Customs Enforcement) A new study by the Bay Area Council Economic Institute (BACEI), led by Professor Maria-Elena De Trinidad Young and research director Abby Raisz, projects that mass deportation of undocumented immigrants, as proposed by former President Trump, could inflict a $275 billion economic loss on California alone. This aligns with peer-reviewed research in the Journal of Labor Economics, which found a 2.5 per cent drop in employment among US-born workers during a previous deportation surge (2010–2015), highlighting the risk of severe labour market disruption. STORY CONTINUES BELOW THIS AD How will this happen? 8 per cent workforce loss: Undocumented immigrants comprise about 8 per cent of California's workforce—roughly 1.75 to 1.85 million people—making up nearly one in ten workers in the state. Economic impact: The projected $275 billion loss spans lost GDP, tax revenue, and business income over several years, challenging claims that mass deportations would benefit the economy by reducing public spending. National context: The American Immigration Council estimates a $315 billion nationwide cost, with California bearing the largest share due to its high undocumented population. Sectors most at risk Agriculture: Nearly 40 per cent of California's agricultural labour force is undocumented. Deportations could reduce crop output by 20–30 per cent especially for key products like almonds, grapes, and strawberries. The Peterson Institute warns food prices could rise by up to nine per cent nationwide, fuelling inflation. Construction: Immigrants, including undocumented workers, make up over half of California's construction workforce. Their removal could delay housing projects and worsen the state's housing crisis. Small businesses: Many small businesses depend on immigrant labour and consumer spending. Deportations would reduce business revenue, causing job losses for U.S.-born workers due to decreased demand. Broader economic implications Ripple effects: The study predicts a 'crippling effect' on California's economy, with national spillovers. Higher food prices could erode consumer purchasing power across the US. Tax revenue loss: Undocumented immigrants contribute $11.7 billion annually in state and local taxes in California. Mass deportations would slash this revenue, straining public services. Federal deficit: Immigrants lower the federal deficit by $40–50 billion yearly through economic activity—a benefit that would be reversed by large-scale deportations. Social and demographic impact Family disruption: About 1.55 million children in California have at least one undocumented parent, meaning deportations could disrupt one in five households, leading to declines in education and health outcomes. Community stability: Co-author Abby Raisz emphasises the 'intricate weaving' of immigrants into California's economy, underscoring a systemic reliance that extends beyond labour to community cohesion. Why this matters National share: California is home to 2.2 million undocumented residents, the largest share in the US. Historical precedent: The 'Secure Communities' programme (2010–2015) saw a 2.5 per cent employment drop among US-born workers in affected areas, supporting BACEI's findings on labour market harm. Economic reality: The study challenges pro-deportation arguments focused on reducing public costs, showing that net economic losses far outweigh any savings from reduced welfare spending, estimated at $10–15 billion annually for undocumented immigrants. Mass deportation could devastate California's economy, drive up food prices, and disrupt millions of families — contradicting claims that such policies would benefit the state or nation.
CNA
06-05-2025
- Business
- CNA
US West Coast ports brace for impact from bruising trade war with China
OAKLAND: Ports on the West Coast of the United States are bracing for a major impact as the country's bruising trade war with China continues. Around half of the goods that arrive at these ports from overseas are made in China, but the figure is expected to drastically fall as the tariff cycle continues. Tit-for-tat escalation between the world's two largest economies have pushed US levies on Chinese goods to a whooping 145 per cent and Chinese tariffs on American products to 125 per cent. GLOBAL MARKET VOLATILITY The Port of Oakland, for instance, is the first US stop for millions of products arriving from China each year, as well as the last stop for agricultural products from California headed the other direction. However, industry analysts believe the recent tariffs on goods means a slowdown at the port is almost certain. 'They've estimated that cargo volume will drop by about 10 per cent with the current level of tariffs,' said Sean Randolph, senior director of the Bay Area Council Economic Institute. 'That's a lot for any port, and it has ripples going through the economy.' At the East Bay Restaurant Supply warehouse near the port, prices for its products have gone up as soon as US President Donald Trump made it clear that tariffs were going to be imposed. The business sells kitchen goods, many of which are made in China, to restaurants and consumers. 'Since the early part of this year, we've been receiving communications from our partners, from our vendors about the increase in prices,' said the firm's chief financial officer David Wong. 'When they pass down the prices to us, unfortunately, in this industry, we will pass down to the end-consumers.' Recent data has shown that fewer ships are leaving China for West Coast ports, which adds to market volatility, said observers. But there is some hope that Trump may be backing down from his tough stance on Beijing, after his comments late last month that the tariffs could 'come down substantially'. In a statement to CNA, the Port of Oakland said it 'is closely monitoring the evolving tariff situation which remains uncertain, especially regarding global countermeasures, deals and retaliation'. TRUMP'S 'UNLAWFUL TARIFFS' The Trump administration had earlier indicated that one of its key goals with its tariffs is to encourage domestic manufacturing. The strategy is based on the idea of reshoring where instead of using factories abroad, companies would build their products in the US. But experts believe that creates a dilemma for US companies that had already been reducing their reliance on China by moving their manufacturing to countries more closely aligned with Washington. Bay Area Council Economic Institute's Randolph questioned whether such firms' efforts to move their production out of China have been in vain. He said: '(They thought) they were doing the right thing, they were diversifying, they were doing what the US government was asking'. California, which is home to the US's largest economy by a wide margin, recently became the first state to sue the Trump administration over the broad-sweeping tariffs. This comes as global trade disruptions have the potential to leave the state high and dry. California Governor Gavin Newsom said last month that the tariffs have already inflated costs, inflicted billions in damages and caused 'immediate and irreparable harm'. 'President Trump's unlawful tariffs are wreaking chaos on California families, businesses, and our economy — driving up prices and threatening jobs,' he said. 'We're standing up for American families who can't afford to let the chaos continue.'
Yahoo
25-04-2025
- Business
- Yahoo
California becomes world's 4th-largest economic superpower
The Brief California is now the world's fourth-largest economic superpower in the world. California overtakes Japan in the ranking. Gov. Gavin Newsom says the Golden State is growing at a faster rate than the world's top three economies. OAKLAND, Calif. - If the state of California was its own country, it would be the fourth-largest economic superpower, according to the International Monetary Fund and the U.S. Bureau of Economic Analysis. Gov. Gavin Newsom released the official results and sent a warning about why it could all be fleeting. Most nations, including some bigger economies, will envy what so relatively few people have done and continue to do. "California has not just a strong economy, but a major global presence," said Sean Randolph. Randolph serves as director of the Bay Area Council Economic Institute. By the numbers California's $1.4 trillion economy is fourth only behind the entire United States, China, and Germany and has now overtaken Japan, a nation with almost three times California's population. "We achieved that because Japan's economy is actually shrinking," said Randolph. India, the world's most populated country, is behind California's economy, even though its population of 1.4 billion is 37 times that of the Golden State's. "They have a long way to go still to really achieve the kind of the environment for investment and regulation that they're gonna need to grow faster," said Randolph. Newsom says at 6% annual growth, California's economy is growing at a faster rate than the world's top three economies, especially those of China and Germany, possibly eventually overtaking the latter. But to do that, California must streamline and speed up processes for growth. "It makes it hard to build anything. It makes it hard to build factories," said Randolph. One example: California captured very little from the CHIPS Act that funds domestic microchip production because of its high cost and the pace to build it in the state. "We need to find a way to build more housing and reduce the cost of living and the cost of doing business here," said Randolph. However, Newsom says the one thing that stands in the way of all this can be distilled down to one word: "Tariffs, literally gutting the economy of the state and creating so much uncertainty. It's going to take years and years. To wreck the economy, now the fourth-largest economy in the world, California," said Newsom. This story was reported out of Oakland, Calif.
San Francisco Chronicle
22-04-2025
- Business
- San Francisco Chronicle
‘Freaking out': California businesses are feeling the burn from Trump's tariffs
A supermarket in San Francisco's Chinatown suffered plummeting sales due to rising prices of Chinese imports. A Bayview auto repair shop paid more for batteries and brakes. An almond farmer in the Central Valley has seen Chinese export demand for his goods evaporate. California, the nation's biggest importer from and second biggest exporter to China, is already seeing the effects of President Trump's new 145% tariffs on Chinese imports and China's retaliatory levies on U.S. exports. Economic and cultural ties to China run deep in the Golden State and those bonds are particularly strong in the Bay Area, the symbolic and literal gateway for Chinese businesses connecting to the American market. 'California's competitive advantage is being a coastal state and the gateway of trade to the U.S.,' said Sung Wook Lee, an import broker who serves as president of the Custom Brokers and Forwarders Association of Northern California. But that could also be a weakness for the state with arguably the closest economic ties to China. It means California will have larger exposure to the impact of the U.S.-China trade war, which will almost certainly mean a rise in the price of goods, Lee said. The Port of Oakland, which handles almost all shipments of containerized goods moving through Northern California, anticipates a 10% drop in cargo volume as a result of tariff impacts, said Robert Bernardo, a port spokesperson. The port, a major employer, supports 100,000 jobs. In 2024, a quarter of California's imports came from China, including household appliances and computer, communications and electrical equipment. About 8% of exports went to China, mostly machinery, medical instruments, semiconductors, medicine, fruits and nuts. Trump has long been a big fan of tariffs to reduce the U.S. trade deficit with China, which was $295.4 billion in 2024, but economists generally agree that tariffs aren't a good way to address it. He imposed up to 25% tariffs in 2018 on some Chinese goods, which Biden maintained. In Trump's second term, he has issued a flurry of tariffs, including hitting all Chinese imports with 10% tariffs in February, doubling them in March, and raising it to a total of 145% in April, while promising to pause tariffs ondozens of other countries. China has retaliated, raising taxes on American imports up to 125%. The chaos has been felt in California. The biggest risk, said Sean Randolph, senior director of the Bay Area Council Economic Institute which supports Bay Area-China trade, business and investment relations, is an 'almost complete cutoff in trade' between the two countries. 'The erratic nature of the tariffs and lack of clarity around what the end game is, that's causing a lot of companies to freeze up or delay decision making as long as they can over the long term,' Randolph said. 'That's not a good thing for the economy as a whole.' Although China has a big enough domestic market that many companies won't be hurt by the tariffs, some Chinese companies are eyeing shifting production to the U.S. — just as Trump wants, said Darlene Chiu-Bryant, executive director of GlobalSF. That's because the U.S. is the world's largest consumer market by far. Chiu-Bryant said she is a business consultant for some Chinese manufacturers of everyday consumer goods who have started looking to open factories in the U.S. to circumvent tariffs. But ultimately, she said, the 'decoupling' of the U.S. and Chinese economies will be 'really unhealthy' for both countries as it'll mean loss of consumer choices, slower growth and higher prices. Donald Luu, president of the San Francisco Chinese Chamber of Commerce, said that many local Chinese restaurants have already raised menu prices but that they're eating some of the tariff costs. 'This is going to be worse than during the COVID-19 pandemic,' he said, because those struggling won't get the federal stimulus dollars distributed during the pandemic to bring economic relief. He voiced concern for immigrants who depend on the nation's oldest Chinatown as an engine of employment and entrepreneurship. 'It's going to be less opportunities for new immigrants who need jobs when they come here,' he said. 'This trade war will always affect the little guys most.' Hon So, owner of New Asia supermarket In Chinatown, imports most of his goods from China. He saw about a 20% drop in sales in the week after the biggest China tariffs took effect, he said. Even though he's raised prices between 15% to 30%, he's afraid hiking them further would drive away his customers, many of whom are lower-income Chinatown residents. 'They cannot pay that much more,' he said. 'They're all very worried.' If the tariffs continue, he said he's worried his business — and Chinatown, which he said had just bounced back from the pandemic's economic downturn — will take a big hit. Lee said the trade war not only hurts wallets but cultural ties in the Bay Area, where more than a quarter of residents are Asian American. That share is even higher in San Francisco with about 37% of residents identifying as Asian American. 'Many immigrant communities, including the Chinese, are somewhat disappointed that this particular trade gateway and their connection to their culture is being closed,' Lee said. Other sectors are also feeling the hit, especially auto repair shops that import parts and machinery from China that are also subject to 25% steel and aluminum import tariffs, which took effect in March, Lee said. Job Garcia, director of T-21 Auto Services and Repairs in San Francisco's Bayview neighborhood, said he's been paying more for car parts including brakes, car batteries and tires, and had to raise prices as a result. He used to price tires at about $95 apiece. This month, due to tariff-related cost increases from his supplier, he raised his tire price to about $141. He used to sell up to 50 tires a week. He's down to selling 15 to 20 a week. 'I'm freaking out,' Garcia said. 'Definitely, small businesses are being affected.' California farmers are being hurt just like other small business owners like Garcia. The state's farmers, which exported $1.4 billion worth of agricultural products to China last year, have seen blunted demand. Peter Friedmann, executive director of the Agriculture Transportation Coalition, who advocates for agriculture exporters in D.C., said China's latest round of reciprocal tariffs on U.S. exports will cause significant damage because China isn't reliant on the U.S. for even its most prolific exports. 'We have nothing we produce in agriculture or forest products in this country that cannot be sourced somewhere else in the world,' he said. 'Almonds, walnuts, soybeans, lumber, pork, beef, anything — you can get it somewhere else in the world.' The harms will be felt throughout the employment chain, he said, from farmers to truckers, from warehouse and cold storage facilities workers to port employees. PJ Sandhu is a third-generation almond farmer in Tracy, a Central Valley city in San Joaquin County. The CEO of Crown Nut Co., said in the past two months, he's received no orders from China. The almond processing plant used to export 10% of its nuts, or about 4 millions pounds a year, to China. China's reciprocal tariffs have shifted demand from California almonds to places like Australia, he said. Sandhu said business has already been tough since 2018, when Trump first imposed tariffs, but that the latest round of tariffs are 'ludicrous.' 'It is more or less killing the entire relationship. It's taking China and the billion people right off the map as far as almond consumption is concerned,' he said. 'The lasting damage the tariffs will do to the industry is incalculable.'
