Trump immigration policies could hurt California's economy, UCLA Anderson Forecast warns

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There has been considerable coverage lately about the human effects of President Trump’s stricter immigration policies, such as families torn apart by deportations. But there are also economic effects that could have big implications for several key sectors in California, according to the latest UCLA Anderson Forecast released Wednesday morning.

"The threat to deport millions of undocumented immigrants, a threat that the current Attorney General has endorsed, is a risk to the forecast," the report states. "Were this to occur, there could well be a significant reduction in the production of food, in food processing, particularly the slaughter and preparation of meat products, in garment manufacturing and in residential construction."

The estimated 839,300 people who work in California's agriculture industry could be particularly effected. 

“It’s estimated by the U.S. Department of Agriculture that at least 50 percent of those who do the harvesting are undocumented," says UCLA Anderson Senior Economist Jerry Nickelsburg. "If they’re not there, who’s going to pick the crops?”

The Anderson economists usually provide precise numbers to illustrate how California’s economy would be impacted by such policies, but in this case they’re in the dark, like everyone else, about what specific actions the administration will take, such as rounding up immigrants here illegally.

"The open questions are, will the new rules of engagement lead to the detention of large numbers of workers in these sectors or, will the businesses that hire these workers, particularly in agriculture, use their influence to temper this?" the report says. "We don’t have good answers at this time." 

Worries about California's tourism industry

The Anderson economists are also concerned about California’s tourism industry being hurt if foreigners don’t feel as welcome in the U.S. and if the dollar continues to strengthen, which makes it more expensive for overseas visitors to take trips here. 

The state could lose out on $7.5 billion and $9.2 billion in direct income in 2017 and 2018 respectively because of the decline in visitors. That is a relative drop in the bucket for California's $2.5 trillion economy, but tourism is still an important sector.

"Though the numbers are not huge, the individuals involved are typically low skilled and are those most vulnerable to the effects of California’s rising minimum wage," the report says. "Moreover, they tend to have a high propensity to consume, so the loss in income will have a greater employment (impact) and income impact than these numbers suggest."

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