This Economic Paradise Will Be Hit Hardest If Trump Banishes 11M Undocumented Workers From The U.S.
SAN DIEGO — No city has more to lose than this one.
Amid sun-drenched palm trees and crashing waves from the Pacific Ocean, this Southern California paradise would seem more likely to inspire a sense of serenity than fear or dread.
But San Diego’s notch at the far southwestern edge of the 1,954-mile American-Mexican border places the city directly in the crosshairs of President-elect Donald Trump's campaign pledge to deport up to 11 million undocumented immigrants. If Trump were to make good on that seismic promise, one aftershock would be severe damage to the U.S. economy along the border.
San Diego could very well be ground zero. From construction to tourism to hospitality, industry and labor in the city is fueled in large measure by a group of people who Trump derides as “criminals,” “rapists” or “bad hombres.” While the sudden loss of the undocumented might score political points for Trump, San Diego’s economy would undoubtedly suffer a massive, sudden blow.
Bisnow spoke with people across the spectrum of San Diego’s economy — from hotel operators and small-business owners to state-level politicians and undocumented hotel maids earning $30k/year. We granted anonymity to the undocumented and those who employ them. Here are their stories.
The Workers: Sofia & Mariana
Sofia, a restaurant worker who earns minimum wage, has been in the U.S. for 28 years and, along with her family, she considers San Diego her home. If she is forced to return to Mexico, she has vowed to fight.
“Personally I have a lot to lose. I just cannot return to Mexico after so many years,” she said. “I am scared of ICE (U.S. Immigration and Customs Enforcement) going to my home to arrest me, and I’m scared of going to jail.”
Mariana, a hotel maid earning about $30k/year, has been in San Diego for 25 years and is married with four adult children — all born in the U.S.
“I am experiencing a renewed and constant fear of family disruption," she said. "I am particularly fearful that if I am arrested or come forward voluntarily, I will be deported regardless of how long I have been here.”
If she is forced to leave, Mariana said she would return to Mexico without a struggle, but is hopeful her children will be able protect her since they are U.S. citizens.
The Builder and Dreamer: Tony Rodriquez
Tony Rodriquez, owner of San Diego-based JETT Engineering & Construction, is among the first generation of a group now known as “Dreamers.”
His father was a migrant worker for the U.S. government’s “Bracero” program, which contracted with Mexican nationals during World War II to pick cotton needed for soldiers' uniforms. Rodriquez said the U.S. government provided these workers with a six-month contract to come to the U.S. during cotton-picking season.
His father brought the entire family to the U.S. legally in 1969. Rodriquez became a U.S. citizen in the 1980s and is now a successful businessman. A construction contractor, his company has built gas stations for major oil companies for more than 30 years. He has also overseen work crews that included unauthorized workers — or as he calls them, “diamonds in the rough.”
Rodriquez said undocumented workers are dedicated, hardworking and even when sick they show up because they “don’t want to let me down.”
“What bugs me are the subcontractors who exploit illegal workers by paying them less,” he said. “They’re doing work that’s supposed to pay $30 to $40 per hour, but have to settle for $10 … Papers or no papers, I always paid them the same. You don’t need to exploit people to be successful.”
The Anonymous Hotel Operators
Two San Diego hotel operators confirmed that many of their housekeeping and service staff are undocumented immigrants with false work documentation — and a crackdown on such personnel could mean a loss of a significant chunk of their staff.
“We have 830 employees, and I’d be shocked if at least 100 of them are not undocumented,” one of them said. “But they passed our ‘smell test’ by filing the government paperwork to get hired.”
“In theory, you don’t know who is or isn’t (legal),” the other hotelier said.
Like the rest of the housekeeping staff, these employees get paid minimum wage. But there is one big difference: undocumented workers pay income and Social Security taxes, but are “working in the shadows,” so they don’t file for income tax refunds or Social Security benefits.
“We’re not required to investigate their status. So, bottom line, if they provide documents, we’re in compliance with the law … We hire them because they show up, work hard and are loyal.”
The Researcher: Phil Wolgin
Studies show expelling illegal immigrants from the U.S. would have a devastating impact on the national economy.
According to a Center for American Progress study, removing the 11 million undocumented immigrants would immediately reduce the nation’s GDP by 1.4% and ultimately by 2.6%. That would reduce cumulative GDP by $4.7 trillion over 10 years.
This is because capital adjusts downward to a reduction in labor, said CAP researcher Phil Wolgin.
“Agriculture is a capital-intensive industry, so if there’s not enough workers, production decreases, and farmers aren’t going to invest in new equipment. So, there is contraction in GDP,” he said.
Trump’s promises would have a similar impact on the building industry. As a result of mass deportation, CAP estimated an annual $48B reduction in the construction industry’s GDP nationwide. Full undocumented worker removal would reduce the nation’s GDP by $434.4B annually, with the largest industries suffering the greatest declines.
Border states like California, which have high concentrations of undocumented immigrants, would experience the largest declines in GDP.
Wolgin said Arizona is a case study in what happens when unauthorized workers are removed. The state passed the 2007 Legal Workforce Act aimed at self-deportation, and 40% of the state’s unauthorized workers left between 2007 and 2012, according to a Pew study.
An analysis by Moody’s Analytics for the Wall Street Journal looked at the economic impact, distinguishing between the effect of mass departure of unauthorized workers and the recession. The analysis concluded that departures alone reduced the state’s GDP on average by 2% annually between 2008 and 2015 — and the state’s total employment dipped on average 2.5% annually during that period.
The Moody’s report found economic activity produced by immigrants — something economists call the “immigration surplus” — shrank because there were fewer immigrant consumers buying clothing, groceries and other goods and services.
“All the talk about deporting unauthorized workers hasn’t addressed the resulting loss of capital and investments that go into the economy if workers are removed,” Wolgin said.
The Legislative Chair: Randy Belcher-Torres
Randy Belcher-Torres, legislative chair for the San Diego County Hispanic Chamber of Commerce, served as legislative representative to three New Mexico governors.
“Study after study has quantified the positive economic impact these immigrants have had on our communities," he said. "U.S. corporations, businesses and consumers have all profited significantly from illegal employers, undocumented workers and illegal immigrants."
Belcher-Torres helped author the Immigration Reform and Control Act of 1986, which was signed into law by President Ronald Reagan. IRCA provided amnesty to nearly 3 million undocumented immigrants arriving in the U.S. prior to 1982 and established a guest worker program. It also made it illegal to hire or recruit undocumented workers and imposed sanctions on employers who knowingly hire them. IRCA does not require employers to investigate the authenticity of employees’ legal status.
Belcher-Torres said the high number of undocumented immigrants in the U.S. is the result of across-the-border encouragement by local, state and federal policies — including lack of enforcement of illegal employer sanctions since IRCA was enacted more than 20 years ago.
“This has resulted in ‘de facto amnesty’ for all ‘illegal employers,’ who over the years have broken the employer sanctions provisions of our immigration law,” Belcher-Torres said, pointing out employers and consumers have been substantially rewarded by low labor costs.
The State Assemblyman: Todd Gloria
With about 6.3% of its population undocumented immigrants, California is leading the opposition to deportation and may well become the nation’s first “sanctuary” state.
The state legislature is considering a series of proposed legislation aimed at protecting undocumented residents, according to San Diego Assemblyman Todd Gloria (D-78). Gloria said a resolution adopted by the legislature before it recessed in December stated California will not be complicit with any attempt to deport Californians.
The resolution and proposed legislation provides strategies to block any federal deportation effort, Gloria said.
He recalled a recent conversation with a San Diego woman who is worried her boyfriend, who was born in Mexico and brought to the U.S. by his parents at age 8, would be deported. The Obama administration last year granted undocumented “Dreamers” brought to the U.S. as children amnesty through an executive order, which Trump may repeal.
“If deported, this young man would find himself in a country with no resources,” Gloria said. “We will not be party to breaking families apart, sending folks to countries where they have no ties, and ruin our economy in the process."
The Legal Perspective: Lynn Marcus
Mass deportation couldn’t legally be accomplished within one or two presidential terms, according to immigration attorney Lynn Marcus, co-director of the Immigration Law Clinic and professor at the University of Arizona’s James E. Rogers College of Law, who said the Constitution provides undocumented immigrants the right to a hearing in immigration court before being deported.
Many undocumented residents also qualify for "relief" from deportation that Congress has carved out for certain long-term residents with good character, crime victims who have cooperated with U.S. law enforcement, victims of torture and other forms of persecution, so the cases must be carefully handled and can be quite involved, she said.
She said there are over half a million cases now in Immigration Court, each pending an average of 675 days.
Besides a lengthy legal process, Marcus said mass deportation would require tremendous infusion of resources — immigration judges, trial attorneys, deportation officers, and personnel and resources of detention centers.
“The U.S. already spends over $2B per year detaining people who are in removal proceedings in existing facilities,” she said. “I would think that trying to actually deport millions of people within a short time period would bankrupt the country — and it certainly can't be done within the life span of a single administration."
CORRECTION, JAN. 17, 5:50 P.M. PT: The original information provided for this story gave an incorrect amount for how much the U.S. spends to detain people in removal proceedings. The story has been updated.