But Trump’s crackdown on undocumented aliens could come with major economic consequences, ex-Reagan advisor and Federal Reserve Bank of New York consultant Paul Krugman predicts.
With around 5% of the US workforce made up of illegals, “losing a large fraction of these workers would be a serious blow to the economy,” Krugman wrote in a Substack post Monday.
In agriculture, “immigrants – many of them undocumented – make up most of the farm labor force,” Krugman noted, pointing to USDA figures showing that over 40% of hired crop farmworkers are undocumented.
US Department of Agriculture figures on US born, foreign born legal immigrants and foreign born illegal immigrants working as hired cropworkers.
© Photo : USDA
“Push those workers out, either by actual deportation or detention or simply by creating a climate of fear, and just watch what happens to grocery prices,” the economist suggested.
Same goes for construction, Krugman believes, pointing to industry stats showing that immigrants make up a majority of plasterers, masons, drywall installers, and a substantial share of painters, roofers, general laborers and hazardous waste removers.
Share of immigrants, both legal and illegal, in construction in the US.
© Photo : National Association of Home Builders
“So at a time when Americans are still angry about the price of groceries and, with more justification, about the unaffordability of housing, Trump’s immigrant crackdown seems set to hobble food production and home construction,” the economist wrote.
A 2024 American University study estimated that immigrants, both legal and illegal, contributed over $2.2 trillion to the US economy. Major corporations and small business alike prefer foreign-born workers for being cheaper, with illegals not enjoying the same worker protections, and under-the-table payments meaning no access to health insurance.
Before Trump's election in 2016, quiet encouragement of illegal immigration was a bipartisan affair, even as conservative Republicans criticized the policy's impact on wages for Americans, and costs to the tax base they generate, and the crime and drug issues associated with the lack of adequate border protections.