Immigration Raids and Economic Shock: California’s Labor Market Takes a Hit

A recent analysis from UC Merced reveals that California experienced a sharp 3.1% drop in private-sector employment in the immediate aftermath of intensified federal immigration raids under the Trump administration. This employment dip, seen during the week following the highly publicized garment factory raid in downtown Los Angeles, marks one of the steepest weekly job losses in the state’s modern history, second only to the initial collapse triggered by the COVID-19 pandemic in 2020.

Drawing on U.S. Census Bureau data collected through the Current Population Survey, researchers compared employment responses between the weeks of May 11 and June 8. Their findings show that in the days following the June raids, significantly more U.S. citizens than non-citizens reported not working, translating to job losses of approximately 271,541 citizens and 193,428 non-citizens.

Dr. Edward Flores, who led the research, emphasized the interconnectedness of labor roles across citizenship status. Disruptions in undocumented labor have ripple effects throughout industries, often stalling entire supply chains and reducing output across sectors. This aligns with existing research suggesting that mass deportations tend to contract local economies and reduce opportunities even for native-born workers.

Flores, who serves as the faculty director at the UC Merced Community and Labor Center, plans to continue monitoring employment trends as immigration enforcement actions escalate. A new federal budget has increased funding for immigration enforcement, likely signaling more raids ahead, particularly in California, where the fallout has already been disproportionately felt.

Notably, the decline in employment was not evenly distributed. The report highlights that white and Latino workers were most impacted, with work participation falling by 5.3% and 5.6% respectively between May and June. In contrast, the rest of the country saw a modest rise in employment among male citizen workers.

Researchers recommend that California policymakers explore immediate interventions, including stimulus aid and economic relief packages similar to those offered during the height of the pandemic, to stabilize the situation. A central concern remains the vulnerability of undocumented workers who lack access to unemployment benefits and other safety nets. Their inability to earn and spend in the local economy has broader consequences for state fiscal health and community well-being.

Despite growing evidence of economic harm, California Governor Gavin Newsom has twice rejected legislative attempts to extend unemployment protections to undocumented workers. More recently, the state halted new Medi-Cal enrollments for this population, citing budgetary constraints.

Newsom’s office remains critical of federal immigration policy. Spokesperson Tara Gallegos described the raids as “ruthless and cruel,” with cascading effects on schools, businesses, and community trust, not just in California, but across the nation. She affirmed the state’s intent to continue legal resistance, referencing California’s lawsuit against the Trump administration following the controversial deployment of Marines to Los Angeles.

Meanwhile, the California Finance Department, which assesses risks to the state economy, has warned that the administration’s deportation strategy could "significantly degrade" the labor force. That sentiment was echoed in their May budget forecast, flagging immigration enforcement as a major economic vulnerability.

As the data continues to unfold, it’s becoming clear that the implications of immigration policy extend far beyond politics, they’re reshaping the livelihoods of hundreds of thousands of workers and reverberating through every layer of the economy.