In what ways might the current mass deportation campaign alter U.S. labor market composition in low‑skill sectors and affect bilateral remittance flows to source countries over the next decade?
The current mass deportation campaign represents a structural shock to the U.S. labor market that will reshape workforce composition in low-skill sectors while fundamentally altering remittance corridors to Latin America over the coming decade. The interplay between enforcement intensity, labor substitution possibilities, and source country economic dependencies creates a complex trajectory with divergent outcomes across regions and industries.
The deportation campaign has already achieved significant scale. By January 2026, the Department of Homeland Security reported that nearly 3 million unauthorized immigrants had left the United States, comprising an estimated 2.2 million self-deportations and more than 675,000 formal removalsDHS Sets the Stage for Another Historic, Record-Breaking Year Under President Trump | Homeland Securitydhs . However, independent analysis suggests the self-deportation figures may be substantially inflated, with credible estimates placing actual voluntary departures closer to 200,000 for 2025—approximately one-tenth of the official claim.
Brookings Institution modeling projects 310,000 to 315,000 formal removals for 2025, with potential escalation to 510,000 in 2026 as funding from the One Big Beautiful Bill Act enables expanded infrastructure and staffingMacroeconomic implications of immigration flows in 2025 and 2026: January 2026 update | Brookingsbrookings . The nature of enforcement has shifted dramatically—whereas fiscal year 2024 saw only 18% of ICE removals initiated from interior enforcement, 2025 operations have concentrated on established communities rather than recent border crossersMacroeconomic implications of immigration flows in 2025 and 2026: January 2026 update | Brookingsbrookings .
Net migration has turned sharply negative, falling from positive 3.3 million in 2024 to negative 740,000 in 2025Trump’s mass deportation plan could end up hurting economic growthdigitaljournal . The foreign-born workforce share has declined from 20% to 19%, representing approximately 750,000 fewer workers by mid-2025—the first such decline in decadesHow New Federal Immigration Policies and Practices Are Impacting Small Businesses in Greater Philadelphia | Economy League of Greater Philadelphiaeconomyleague .
The construction sector faces acute disruption, with undocumented workers comprising approximately 14% of the workforce—roughly 1.5 million individualsMass Deportation - American Immigration Councilamericanimmigrationcouncil . Concentration is far higher in specific trades: foreign-born workers constitute nearly 60% of drywall and ceiling installers and approximately half of all roofers and paintersThe Economic Reality of Mass Deportation: Construction, Food, and Inflationyoutube .
States with large unauthorized immigrant populations have already experienced measurable effects. Construction employment in the ten states with highest undocumented worker concentration declined 0.1% during a period when other states recorded 1.9% growthTrump’s Immigration Actions Are Taking a Toll on Local Economies – Here’s What the Data Says So Far - American Immigration Councilamericanimmigrationcouncil . Housing starts plummeted to 1.246 million units in October 2025—the lowest level since May 2020—with multifamily construction falling 25.9%United States Housing Starts - Trading Economicstradingeconomics .
Wage pressures have emerged as predicted by economic theory. Construction workers' average salaries increased by $3,300 in 2025Full transcript of "Face the Nation with Margaret Brennan," Dec. 21, 2025cbsnews , with the White House claiming that "blue-collar wages grow at the fastest clip in decades"Mass Deportations Are Improving Americans’ Quality of Life – The White Housewhitehouse . However, construction salary growth is projected to moderate to 3-4% in 2026, suggesting initial shock effects may be stabilizingStudy: Construction Salary Growth Decreased in 2025 - Moss Adamsmossadams .
The industry's labor shortage—already estimated at 500,000 workers before enforcement escalation—could reach 1.3 million by 2030 under sustained deportation policiesMass deportations could have $275 billion economic impact on CA, new report showsyoutube . This projection assumes minimal native worker substitution, which available evidence supports: unemployment among U.S.-born workers actually increased from 3.7% to 4.1% between December 2024 and December 2025, contradicting claims that deportations would create opportunities for domestic workersU.S. government data show the Trump administration policies ...facebook .
Agriculture presents perhaps the most severe labor vulnerability. Undocumented immigrants constitute approximately 40-45% of hired crop farmworkersMass Deportations, the Economy, and You - NILCnilc , with concentration reaching 54% among graders and sortersThe Importance of Immigrant Labor to the US Economy - The Center for Migration Studies of New York (CMS)cmsny . The sector lost 155,000 workers between March and July 2025—a stark reversal from the 2.2% employment increase during the same period in 2024Trump’s Immigration Actions Are Taking a Toll on Local Economies – Here’s What the Data Says So Far - American Immigration Councilamericanimmigrationcouncil .
The H-2A visa program, which provides legal agricultural labor, has expanded to 398,258 certified positions in fiscal year 2025—the first time exceeding 400,000 workersH-2A Program Use Continues to Soar | Market Intel | American Farm Bureau Federationfb . However, structural limitations constrain its capacity to offset unauthorized workforce losses. Only 80% of certified positions result in actual visa issuancesCritical Farm Labor Visa Use Ticks Up | Market Intel | American Farm Bureau Federationfb , and the program's seasonal restriction excludes year-round operations entirely.
The Trump administration has simultaneously moved to reduce H-2A wage requirements, with the new Adverse Effect Wage Rate cutting average hourly wages from $17.43 to a skill level 1 rate of $13.70—or $11.78 after newly permitted housing deductionsTrump’s new H-2A wage rule will radically cut the wages of all farmworkers: New estimates show farmworkers stand to lose $4.4 to $5.4 billion annually under DOL’s updated Adverse Effect Wage Rate | Economic Policy Instituteepi . While intended to increase employer utilization, this wage suppression may discourage worker participation and exacerbate shortages.
Fresh produce prices have already shown upward pressure. The cost of fresh vegetables and meat rose during periods of agricultural employment decline, suggesting labor disruptions are transmitting to consumer pricesTrump’s Immigration Actions Are Taking a Toll on Local Economies – Here’s What the Data Says So Far - American Immigration Councilamericanimmigrationcouncil . Peterson Institute modeling projects food price inflation could approach 9% under large-scale deportation scenariosThe Deportation Labor Shock - Econlibeconlib .
The dairy sector confronts unique vulnerability because its year-round labor requirements exclude it from H-2A visa eligibilityAgriculture Labor & Immigration Reform | American Dairy Farms & NMPFnmpf . Immigrant workers constitute 51% of all dairy labor, and farms employing immigrant labor produce 79% of the U.S. milk supplyAgriculture Labor & Immigration Reform | American Dairy Farms & NMPFnmpf . In Wisconsin alone, approximately 70% of dairy farm work is performed by immigrants, many without legal authorizationFarmers push back as visa rules and raids put Wisconsin dairy farms at riskyoutube .
The September 2025 ICE action in Manitowoc County, Wisconsin—detaining more than 20 dairy workers en route to farms—demonstrated that enforcement now extends into rural agricultural communitiesTrump administration immigration enforcement and your dairy labor - Farm Progressfarmprogress . Industry analysis suggests that eliminating immigrant labor from dairy would nearly double retail milk prices and cost the broader economy more than $32 billionAgriculture Labor & Immigration Reform | American Dairy Farms & NMPFnmpf .
Meatpacking operations face compounding pressures from both unauthorized worker removals and revocation of Temporary Protected Status. At one Iowa plant, 200 workers with previously valid work authorization were terminated after the Biden-era CHNV parole program was rescinded, representing approximately 10% of the workforce How the current immigration crackdown is impacting food and farmworkers - FoodPrint foodprint . Following a DHS raid at an Omaha meatpacking facility where half the employees were arrested, recruitment collapsed and production was curtailed amid already rising ground beef pricesTrump’s Immigration Actions Are Taking a Toll on Local Economies – Here’s What the Data Says So Far - American Immigration Councilamericanimmigrationcouncil .
The hospitality sector, where immigrants constitute over 16% of accommodation and food service workersCharted: The Industries Most Reliant on Immigrant Workersvisualcapitalist , recorded labor force growth of just 0.2% in June 2025 compared to 1.5% in June 2024Trump’s Immigration Actions Are Taking a Toll on Local Economies – Here’s What the Data Says So Far - American Immigration Councilamericanimmigrationcouncil .
Contrary to assumptions that technology would rapidly fill labor gaps, automation adoption remains constrained by technological limitations and capital requirements. Precision agriculture adoption has reached approximately 60-65% of U.S. farms for tools like GPS guidance and variable-rate technology, but robotics and automation for field work remains at only 35%US Agriculture Industry 2025: Innovations & Future Trendsfarmonaut .
For delicate crops—strawberries, peaches, tomatoes—harvesting technology simply does not exist at commercial scaleThe Economic Reality of Mass Deportation: Construction, Food, and Inflationyoutube . Alabama's 2011 HB56 immigration law provides a historical case study: when workers fled, tomatoes rotted in fields, farmers lost hundreds of thousands of dollars, and the business community ultimately lobbied for repealThe Economic Reality of Mass Deportation: Construction, Food, and Inflationyoutube .
Dairy represents the sector with strongest automation potential. Robotic milking systems can achieve 60% labor cost reduction with 18-month return on investmentIndustry Shift in the Dairy Trends for 2026 - Cattlyticscattlytics , and some operations have eliminated human milking labor entirelyOpinion | What Replaces Deported Immigrant Workers? Not Americans. - The New York Timesnytimes . However, capital constraints limit adoption primarily to larger operations, leaving many farms dependent on human labor.
The deportation campaign has produced sharply divergent remittance outcomes across Latin America. Mexico experienced a 4.6% decline in 2025—the largest since 2009—with total flows falling to $61.8 billion from a record $64.7 billion in 2024Mexico | 11 Consecutive Years of Remittance Growth End, Falling 4.6% in 2025 | BBVA Researchbbvaresearch . November 2025 marked the eighth consecutive month of declining Mexican remittancesRemittances to Mexico down in 2025 compared to previous yearkjzz .
Central American nations recorded the opposite pattern. Remittances to Honduras surged 25.3%, Guatemala increased 18.7%, and El Salvador rose 17.8%Mexico | 11 Consecutive Years of Remittance Growth End, Falling 4.6% in 2025 | BBVA Researchbbvaresearch . El Salvador's annual remittances exceeded $10 billion for the first time, representing 27.3% of national GDPAnalysis of the economy of El Salvador in 2025thecentralamericangroup .
This divergence reflects several factors. Central American migrants appear to be drawing down savings and accelerating transfers in anticipation of deportation or taxationLatAm in Focus: How a U.S. Tax Could Hit Latin American Remittancesyoutube . Additionally, Central American migrants send a larger proportion of their earnings home compared to Mexican workers, and recent migration waves (2018-2023) from Guatemala and Honduras are now producing lagged remittance effectsWorld Economic Situation and Prospects: November 2025 Briefing, No. 196 | Economic Analysis and Policy Divisionun .
The One Big Beautiful Bill Act, signed into law on July 4, 2025, imposed a 1% excise tax on certain remittance transfers effective January 1, 2026Text - H.R.1 - 119th Congress (2025-2026): An act to provide for reconciliation pursuant to title II of H. Con. Res. 14. | Congress.gov | Library of Congresscongress . The tax applies specifically to cash, money orders, and cashier's checks, while exempting transfers from bank accounts or U.S.-issued debit and credit cardsThe New Remittance Tax: A Hidden Game-Changer in the One Big Beautiful Bill Act - RKL LLPrklcpa .
Preliminary research estimates the tax could reduce remittance flows from the United States by approximately 1.6%World Economic Situation and Prospects: November 2025 Briefing, No. 196 | Economic Analysis and Policy Divisionun . The burden falls disproportionately on smaller, remittance-dependent economies. Relative to gross national income, the heaviest impacts are projected for Central American and Caribbean nations including El Salvador, Guatemala, Haiti, Honduras, and JamaicaWorld Economic Situation and Prospects: November 2025 Briefing, No. 196 | Economic Analysis and Policy Divisionun .
The tax also serves a secondary enforcement function by requiring remittance transfer providers to collect and report sender information, potentially identifying unauthorized immigrants for deportationTrump’s Remittance Tax Gives Government a Means to Collect Data on Immigration Statusyoutube .
IMF projections reveal the trajectory of remittance-dependent economies. Guatemala's remittances as a share of GDP are projected to decline from 19.4% in 2025 to 15.1% by 2030IMF Executive Board Concludes 2025 Article IV Consultation with Guatemalaimf +1. This assumes a scenario of "changing trade and migration policies abroad"Guatemala: 2025 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Guatemalaimf and represents a structural shift in external financing.
Honduras, where remittances reached nearly 26% of GDP in 2024Hondurasimf , faces similar pressures. IMF scenario analysis projects remittances declining to approximately 24.5% of GDP by 2030 even under a "no increase in deportations" assumptionHondurasimf . Under sustained enforcement scenarios, the decline could be more severe.
El Salvador's 27.3% remittance-to-GDP ratioAnalysis of the economy of El Salvador in 2025thecentralamericangroup creates acute vulnerability. Economists warn this dependence model is exposed to both U.S. migration policy shifts and the new remittance taxAnalysis of the economy of El Salvador in 2025thecentralamericangroup . ECLAC projects 3.4% growth for El Salvador in 2026, but structural vulnerability remains due to high public debt (89.2% of GDP), trade deficits, and remittance exposureAnalysis of the economy of El Salvador in 2025thecentralamericangroup .
For the United States, reduced immigration carries quantifiable GDP costs. Brookings estimates the 2025 immigration policy changes reduced GDP growth by 0.2 to 0.3 percentage points, with similar effects projected for 2026Macroeconomic implications of immigration flows in 2025 and 2026: January 2026 update | Brookingsbrookings . Consumer spending is projected to decline by $60-110 billion cumulatively over the two yearsMacroeconomic implications of immigration flows in 2025 and 2026: January 2026 update | Brookingsbrookings .
Peterson Institute modeling of more extreme scenarios—removal of all 8.3 million unauthorized workers—projects GDP could fall 7.4% below baseline by 2028, effectively eliminating net economic growth during the second Trump termTrump’s mass deportation plan could end up hurting economic growthdigitaljournal . Inflation would rise 3.5 percentage points above baseline by 2026 as employers raise wages to attract domestic workersTrump’s mass deportation plan could end up hurting economic growthdigitaljournal .
Wharton School analysis indicates long-term immigration crackdowns could shrink the economy by up to 1% of GDP and depress wages for typical American workers—contradicting arguments that reduced immigration benefits native workersQuelle Surprise! CEOs Overwhelmingly Negative on Trump’s Economic Policies as Shallow Fed Rate Cut Confirms Stagflation Worriesnakedcapitalism .
In remittance-receiving households, financial behavior is already adjusting. When flows decline, households prioritize consumption over savings and investmentsLatin America Faces Remittance Shock Under New US Taxgfmag , reducing capital formation. The vast majority of Mexican remittances are directed toward current consumption rather than investmentRemittance Trends: Who is Winning and Why?youtube , meaning reductions translate directly to lower living standards.
Paradoxically, 90% of El Salvador's remittances now flow to households no longer classified as low-incomeAnalysis of the economy of El Salvador in 2025thecentralamericangroup , creating inclusion challenges for extreme poverty families lacking relatives abroad.
The formal remittance system faces potential diversion to unregulated channels. Latin America registered more than $1.5 trillion in on-chain cryptocurrency transaction volume between July 2022 and June 2025, with crypto usage growing approximately 63% in the most recent yearLatin America's crypto industry gains institutional support as ...crypto-finance . Stablecoin transfers on networks like Polygon processed over $380 million in Latin American volume in November alone. @0xPolygon has been on fire in November > Payments volume has surged almost 5x compared to last year, jumped from $244m to a whooping $1.17B in November > Polygon has dominated Latam stablecoin transfers by 90%, processed over $380m of all Latam stablecoin transfer volume in Nov alone >Revolut has processed $775m+ in stablelcoin volume on Polygon > Polygon has been also the largest network for micropayments surpassing Solana with over $84M in volume And here’s the crazy part Polygon has seen a record ~$6.3M in small (<$1K) stablecoin transactions on Dec That’s a huge signal that real people are actually using Polygon for day-to-day stuff! Bullish on purple chain 💜x .
The new remittance tax's application to cryptocurrency remains legally uncertain, as the statutory definition of "funds" may not capture virtual currency transfers absent further regulatory interpretationOne Big Beautiful Bill Act - Senate Proposal Would Limit Applicability of House’s 3.5% Remittance Tax on Fund Transfers Abroad | Insights | Greenberg Traurig LLPgtlaw . This ambiguity could accelerate migration to digital channels.
The entrepreneurial implications extend beyond direct labor market effects. Approximately 40% of U.S. small business owners are foreign-bornTax Fairness and the SBA: When Paying Into the System ...americancommunitymedia , and new SBA lending rules effective March 1, 2026 require 100% U.S. citizenship for all direct and indirect loan applicants—eliminating long-standing eligibility for green card holdersSBA loan rule change shocks small businesses: SBA 100% citizenship mandate explained: Why green card holders lose access to SBA loans starting March 1, 2026 - The Economic Timeseconomictimes .
In Los Angeles County, 82% of businesses surveyed reported negative impacts from immigration enforcement, with 44% losing more than half their revenueNew Report from LA County DEO and LAEDC Reveals Widespread ...lacounty . The county estimates undocumented workers contribute $253.9 billion in total economic output—equivalent to 17% of its GDPNew Report from LA County DEO and LAEDC Reveals Widespread ...lacounty .
The coming decade will likely witness a fundamental restructuring of labor-intensive U.S. industries. Construction and housing development will face persistent shortages, elevated costs, and delayed completion timelines absent major policy reversals or accelerated automation investment. Agriculture will increasingly bifurcate between operations that can mechanize or access H-2A labor and those that cannot sustain production. Dairy faces existential challenges without year-round visa reform.
For remittance-dependent economies, the short-term surge in Central American flows represents precautionary transfers rather than sustainable income—a drawing down of migrant savings that will eventually exhaust. The medium-term trajectory points toward reduced flows, constrained household consumption, and heightened macroeconomic vulnerability across the Northern Triangle.
The policy environment has created interlocking pressures: enforcement drives workers out, the remittance tax penalizes remaining transfers, and SBA restrictions limit immigrant entrepreneurship. Together, these measures represent a comprehensive effort to reduce the immigrant economic footprint in the United States—with consequences that will reverberate through both U.S. labor markets and Latin American households for the remainder of the decade.