Trump's Mass Deportation Plan Threatens US Economy With 7.4% GDP Loss: Report

President-elect Donald Trump's proposal for mass deportation could severely harm the U.S. economy by reducing economic growth, shrinking the labor force, and increasing inflation, a report by Democrats on the Congressional Joint Economic Committee (JEC) revealed.

The report, which was released Thursday and was based on data from the Peterson Institute for International Economics, estimated deporting 8.3 million undocumented immigrants could cut the GDP by 7.4% and reduce employment by 7% by 2028, the report mentioned. This might lead to no economic growth during Trump's potential second term.

This is not the first report to suggest that the mass deportation plan would lead to large drops in GDP and employment.

According to the Peterson Institute for International Economics, deporting 1.3 million people would reduce GDP by 1.2% and employment by 1.1% by 2028.

The American Immigration Council estimated that deporting 1 million undocumented immigrants each year until the entire population was removed could cause a 4.2% to 6.8% loss in GDP, amounting to $1.1 to $1.7 trillion in losses. States like California, Florida, and Texas would feel the impact the most. In comparison, the economy shrank by 4.3% during the Great Recession.

Furthermore, Trump's plan would reduce contributions to Social Security by $23 billion and Medicare by $6 billion annually, as these workers would no longer pay into these programs.

Undocumented immigrants comprise 4.4% to 5.4% of the U.S. labor force, but play essential roles in construction, agriculture, health care, and hospitality. They grow and process food, build homes, and provide in-home care for seniors.

Many undocumented workers are educated in the U.S., with over 15% holding a bachelor's degree or higher, and nearly half a million currently enrolled in colleges.

Labor shortages are already a concern in sectors like construction, which had 282,000 job openings in September 2024. By 2025, the industry will need 454,000 workers to meet demand. With up to 25% of construction workers being undocumented, mass deportations would worsen these shortages.

"The labor shortages that result from mass deportations would raise costs for all Americans. With unemployment near a historic low, employers in sectors like agriculture and construction would produce less, resulting in shortages and higher prices," the JEC report added.

A source revealed earlier this week that Trump was reportedly planning to remove a long-standing policy that stops Immigration and Customs Enforcement agents from arresting undocumented individuals from sensitive places.