Trump's biggest campaign promise would cause 'economic disaster': analysis

Donald Trump's promised crackdown on immigration could inflict mass misery and economic calamity, according to a new analysis.

The former president's radical plans for a potential second term in office include barring entry from select Muslim-majority nations, denying all asylum claims and rounding up millions of undocumented immigrants for deportation, and economic analyst Robert Shapiro warned in a new Washington Monthly column that these policies would set off an "economic disaster."

"By any measure, a policy that eliminated 4.5 percent of the current workforce, including large numbers of college and high school graduates, would set off serious economic tremors," Shapiro wrote.

"Using Okun’s Law on the relationship between rising unemployment and GDP, a 4.5 percent drop in employment is associated with depressing GDP growth by more than 9 percentage points. This estimate also includes the impact on other jobs. A recent study of much more modest programs to deport immigrants found clear evidence that they cost other American jobs. By one calculation, deporting 1 million immigrants would lead to 88,000 additional employment losses by other Americans, suggesting that Trump’s program could cost up to 968,000 Americans their jobs on top of the 7.1 million jobs held by immigrants up for deportation."

Contrary to popular misconception, only 4 percent of undocumented immigrants work in agriculture, while nearly a third of them work in the construction or hospitality industries and 14 percent of working unauthorized immigrants provide professional, scientific, technical or administrative services.

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"Doing the math, we find that a mass deportation program could depress national wage and salary income by $317.2 billion or 2.7 percent of labor income in 2023," Shapiro wrote. "This would be a much larger percentage loss than during the 1980, 1991, and 2002 recessions. It also would be more than half the 5 percent decline in 2009 at the height of the Great Recession. By these measures, too, a severe recession would likely accompany Trump’s draconian program."

Mass deportation could potentially revive inflation, which happened when companies had to replace large numbers of workers after COVID-19 crested, and businesses would either have to pay more in overtime and recruitment or accept lower productivity, which all leads to higher prices for consumers.

"Mass deportations would involve enormous costs for taxpayers," Shapiro wrote. "One study found that apprehending, detaining, transporting, processing, and finally deporting unauthorized immigrants in 2015 cost the government an average of $18,214 per deportee or $24,094 in current dollars. Using the latest DHS estimates, the taxpayer costs to deport 11 million people would come to $265 billion—without including their American children or the costs to build and maintain large detention camps. For perspective, $265 billion is equivalent to 11 percent of all projected income tax revenues in 2024 and 30 percent of the Pentagon’s 2024 budget."

"Now, Trump seems determined to set new records for deportations," he added, "regardless of the costs to taxpayers and the economy."