How Would Donald Trump's Immigration Plans Affect the U.S. Economy?

Editor’s pick: Originally published Jan. 15.

“Illegal immigration is beyond belief,” declared Donald Trump at the sixth Republican presidential primary debate on Thursday evening. He’s got a plan to fix it, though the ramifications might not be all that great for the economy.

Tackling immigration has been among the billionaire businessman’s top priorities in his presidential bid. He first made waves on the issue in his campaign announcement speech in June, calling Mexican immigrants criminals and rapists and pledging to build a wall on the southern border.

His plans have cost him a handful of business deals, but they might cost the United States much more.

The American Action Forum, a right-leaning policy institute based in Washington D.C., estimates that immediately and fully enforcing current immigration law, as Trump has suggested, would cost the federal government from $400 billion to $600 billion. It would shrink the labor force by 11 million workers, reduce the real GDP by $1.6 trillion and take 20 years to complete (Trump has said he could do it in 18 months).

“It will harm the U.S. economy,” said Doug Holtz-Eakin, president of the American Action Forum and chief economic policy adviser to Sen. John McCain’s 2008 presidential campaign, in an October interview. “Immigration is an enormous source of economic vitality.”

A number of industries that depend heavily on cheap immigrant labor would be devastated — especially agriculture. “There would be an abrupt drop in farm income and a sharp rise in food prices,” said John McLaren, professor of economics at the University of Virginia with expertise in international trade, economic development and the political economy.

Companies that sell to the immigrant population would be affected as well, leading to decreased revenues for local businesses and a loss of American jobs.

“Immigrants, whether they are legal or illegal, always spend a portion of their earnings in the location where they have their jobs,” McLaren said. “And in a lot of our urban centers, this is actually an important part of the economy.”

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Ted Cruz has argued that illegal immigration drives down wages, but that is generally not the case. According to an April 2015 study from the National Bureau of Economic Research, the opposite happens, and local real wages often rise.

Moreover, on average, each immigrant generates 1.2 local jobs for local workers, most of which are native-born Americans.

“Obviously, those jobs would disappear if the undocumented were just yanked away,” McLaren said.

On Thursday, Trump appeared to link illegal immigration to the national debt, though the exact relationship wasn’t clear. “We are $19 trillion — our country’s a mess and we can’t let all these people come into our country and break our borders. We can’t do it,” he said.

Of course, Trump’s criticism of the U.S. immigration system isn’t strictly tied to wages, the loss of American jobs or the economy at all — it is also focused on Muslim immigration and the threat of terrorism. On Thursday, he appeared more interested in discussing the latter.

When asked why moderator Maria Bartiromo whether he would consider rethinking his proposal that Muslim immigration be brought to a halt, he stuck to his guns and again refused to back down.

“Look, we have to stop with the political correctness,” he said. “We have to get down to creating a country that’s not going to have the kind of problems that we’ve had with people flying planes into the World Trade Centers, with the — with the shootings in California, with all the problems all over the world.”

He reiterated his assertion that “we have to find out what’s going on” and emphasized that he has banned a temporary stop, not permanent.

Trump’s plans may be momentary, but some say the impact of his over-the-top rhetoric on immigration could be long-lasting and do irreversible damage to the American image.

“What’s the American brand after we’ve rounded up 11 million people and sent them packing?” said Jim Pethokoukis, a columnist at the American Enterprise Institute, a center-right think tank based on Washington, D.C. “Do people still view America the same way?”