Donald Trump's deportation plan would be an economic nightmare

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The Economic Effects of a Trump Presidency

Presumptive Republican presidential nominee Donald Trump built his candidacy in its early stages on the issue of immigration, with his promises to build a wall along the US-Mexico border and to deport the approximately 11 million immigrants thought to be living in the US illegally.

But in addition to the incredible human costs and practical and legal issues surrounding the deportation plan, forcibly removing millions of workers would also be economically devastating, potentially leading private-sector output to decline by hundreds of billions of dollars.

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The American Action Forum, a nonpartisan, center-right-leaning think tank, released a study this week breaking down the economic consequences of deporting every unauthorized worker in the US.

The authors of the paper, Ben Gitis and Jacqueline Varas, said that based on an earlier American Action Forum study, the direct costs of dramatically expanding immigration-enforcement agencies and courts to deport roughly 11 million people would already cost the US government an estimated $400 billion to $600 billion.

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Donald Trump's deportation plan would be an economic nightmare
People march with an inflatable effigy of Republican presidential candidate Donald Trump during an immigrant rights May Day rally in Los Angeles, California, U.S., May 1, 2016. REUTERS/Lucy Nicholson
A man marches with a cardboard cutout of Democratic presidential candidate Hillary Clinton during an immigrant rights May Day rally in Los Angeles, California, U.S., May 1, 2016. REUTERS/Lucy Nicholson
People march with an inflatable effigy of Republican presidential candidate Donald Trump during an immigrant rights May Day rally in Los Angeles, California, U.S., May 1, 2016. REUTERS/Lucy Nicholson
People march with an inflatable effigy of Republican presidential candidate Donald Trump during an immigrant rights May Day rally in Los Angeles, California, U.S., May 1, 2016. REUTERS/Lucy Nicholson
People march with an inflatable effigy of Republican presidential candidate Donald Trump during an immigrant rights May Day rally in Los Angeles, California, U.S., May 1, 2016. REUTERS/Lucy Nicholson
People march with signs depicting Republican presidential candidate Donald Trump during an immigrant rights May Day rally in Los Angeles, California, U.S., May 1, 2016. REUTERS/Lucy Nicholson
People protest outside City Hall with an inflatable effigy of Republican presidential candidate Donald Trump during an immigrant rights May Day march in Los Angeles, California, U.S., May 1, 2016. REUTERS/Lucy Nicholson
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A woman marches with Mexican and U.S. flags under an inflatable effigy of Republican presidential candidate Donald Trump during an immigrant rights May Day rally in Los Angeles, California, U.S., May 1, 2016. REUTERS/Lucy Nicholson
People march with an inflatable effigy of Republican presidential candidate Donald Trump during an immigrant rights May Day rally in Los Angeles, California, U.S., May 1, 2016. REUTERS/Lucy Nicholson
People march with an inflatable effigy of Republican presidential candidate Donald Trump during an immigrant rights May Day rally in Los Angeles, California, U.S., May 1, 2016. REUTERS/Lucy Nicholson
People march with an inflatable effigy of Republican presidential candidate Donald Trump during an immigrant rights May Day rally in Los Angeles, California, U.S., May 1, 2016. REUTERS/Lucy Nicholson
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But beyond the immediate costs of hiring thousands of immigration agents, lawyers, and support staff to remove millions of people from their homes, Gitis and Varas found that the economic effects of suddenly removing millions of workers from the labor force would be enormous.

Gitis and Varas started by estimating the size of the unauthorized workforce. Using 2012 data on that group from the Pew Research Center and workforce data from the Bureau of Labor Statistics, they found that, across different industries, about 6.8 million workers without documentation were employed.

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They broke down how concentrated these workers were in each major industry group:

undocumented worker industry concentration

Removing all those workers, then, would have a huge effect on the industries. Gitis and Varas considered two scenarios to come up with a range for the economic damage.

As a lower-bound scenario, they assumed that any available unemployed native-born or lawful immigrant workers in each industry would pick up as much of the slack as possible and fill in at least some of the jobs vacated by the deported workers. In this scenario, not all the jobs would be filled, as they found that there wouldn't be enough unemployed native or lawful immigrant workers to take over.

As an upper-bound scenario, they instead assumed that these jobs would go unfilled and simply disappear.

They found, using estimates of output per worker in each of those industries, that the cost in lost output would be in the hundreds of billions of dollars (emphasis ours):

"Overall, removing all undocumented immigrants would cause private sector output to decline by between $381.5 billion and $623.2 billion. This translates to a 2.9 percent to 4.7 percent reduction in total annual output from the private sector."

Gitis and Varas went on to say that this estimate is based solely on what would be lost from removing unauthorized workers from these industries, and it doesn't include other economic effects like investment and consumption by the group.

Gitis and Varas, of course, acknowledged several caveats with their analysis. By relying on data from 2012, the most recent available from Pew, when unemployment was much higher than it is now, it's possible that the lower-bound estimate might be too optimistic, as there could be fewer unemployed native and lawful immigrant workers to take over those jobs. On the other hand, the newly vacated jobs could bring in workers outside the labor force, making that estimate too pessimistic.

For more, check out the full paper here.

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