(Image Credit: IMAGN) Heidi Yojana Chali Chiyal is hugged by her grandmother, Catarina Chiyal, after being deported to Guatemala on Feb. 19, 2025. Chiyal was apprehended in Laredo, Texas, after trying to enter the U.S. illegally.
Sacramento, California – A new study projects that the Trump-era approach to immigration enforcement could carry a staggering $275 billion price tag for California, underscoring the economic consequences of mass deportation policies on the state’s labor force, industries, and communities.
The research, conducted by the Bay Area Council Economic Institute in partnership with UC Merced public health professor Maria-Elena De Trinidad Young, analyzes the statewide impact of removing the roughly 2.28 million undocumented immigrants living in California—about one in five of the state’s immigrant population and 8% of its total workforce.
At the core of the findings is a simple, if politically uncomfortable, truth: California’s economy runs on immigrant labor, regardless of legal status. The study estimates that undocumented workers generate nearly 5% of the state’s gross domestic product (GDP) directly, and almost 9% when indirect and induced effects are included. These workers also contribute more than $23 billion annually in local, state, and federal taxes.
“This is not a marginal population,” said study co-author Abby Raisz, research director for the Institute. “Immigrants, both documented and undocumented, are deeply and intricately woven into our overall economic fabric.”
The agricultural sector, long dependent on immigrant labor, would be among the hardest hit. More than a quarter of the state’s agricultural workers are undocumented, and nearly two-thirds are immigrants. Removing this labor force would shrink the industry’s GDP by 14%, disrupting food production not only in California but across the nation.
The construction industry, already grappling with a persistent labor shortage, would see a GDP contraction of nearly 16% without its undocumented workforce. According to the report, 26% of California’s construction workers are undocumented, while 61% are immigrants. Removing them would not only stall building projects but further drive up housing costs in an already unaffordable state.
The economic impact, however, goes beyond statistics. Interviews with business owners and local leaders across California reveal communities already contending with the collateral damage of heightened immigration enforcement—delayed projects, strained public services, and emotional distress. There was broad consensus among those interviewed that federal legalization efforts would offer a more stable and economically sound path forward.
While debates over immigration policy often focus on legality and national security, this study reframes the conversation in terms of practical economics. The message is clear: California’s undocumented immigrants are not just residents in the shadows—they are essential workers at the heart of the state’s economic engine. And removing them may cost more than the state, and the country, can afford.
