Three new reports, from Los Angeles County, leading economists and the Federal Reserve Bank of Richmond, point to a common theme: immigration policies can influence far more than border crossings. They can affect businesses, innovation, jobs and the long-term strength of the U.S. economy.
Walk through parts of Los Angeles today, and the effects of intensified federal immigration enforcement are visible beyond immigration courtrooms and detention centers. Restaurant tables sit empty. Some neighborhood businesses report fewer customers. Employers struggle to fill shifts as workers stay home out of fear. Churches, schools and community organizations say attendance has fallen in neighborhoods with large immigrant populations.
Now, a growing body of research suggests these local disruptions may be part of a much larger economic story.
Three recent reports, each examining a different aspect of immigration, arrive at a similar conclusion: immigration policies can have economic consequences that extend well beyond the people directly targeted. They can affect consumer spending, labor markets, business investment, entrepreneurship and America’s ability to compete globally.
Taken together, the research does not settle every political debate over immigration. But it offers evidence that the economic effects of immigration policy reach far beyond the border.
Los Angeles is already measuring the economic impact
A report released by the Los Angeles County Department of Economic Opportunity and the Los Angeles County Economic Development Corporation examined the local effects of intensified federal immigration enforcement.
The findings paint a picture of an economy disrupted by fear as much as by enforcement itself.
More than 80 percent of surveyed businesses said federal immigration actions had negatively affected their operations. More than half reported declines in customer traffic and daily sales. Many immigrant-owned businesses experienced revenue losses exceeding 50 percent.
The report also found that more than 30 percent of employers said workers were afraid to report to work because of the enforcement climate, creating staffing shortages across multiple industries.
Using economic modeling, researchers estimated that a major phase of enforcement activity contributed to more than $625 million in lost retail sales across the Los Angeles region and nearly $60 million in lost sales tax revenue. The report also documented declines in public transit ridership, lower attendance at schools and churches in immigrant neighborhoods, and widespread changes to daily routines among mixed-status families.
Those findings prompted the Los Angeles County Board of Supervisors to declare a local emergency and expand assistance for affected families through legal aid, emergency support and other community programs.
A historical lesson about immigration and economic growth
While Los Angeles officials measured today’s economic disruptions, economists at the National Bureau of Economic Research looked backward.
Their study examined the massive immigration wave between 1880 and 1920, when more than 20 million immigrants arrived in the United States.
The researchers found that immigrants did more than meet labor needs. Cities that attracted immigrant populations became stronger centers of innovation, patent activity and long-term economic growth.
One of the study’s central findings is that immigration helped create environments where businesses, inventors and skilled workers benefited from being close to one another. Those networks increased productivity and supported industries that continued growing for decades.
The paper does not evaluate today’s immigration system or current enforcement policies. Instead, it provides historical evidence that immigration has often contributed to America’s economic development in ways that extend beyond the labor market.
For California, where immigrants continue to play major roles in agriculture, construction, health care, logistics, hospitality, technology and entrepreneurship, the findings offer important historical context for current policy discussions.
The competition for global talent
A third report, published by the Federal Reserve Bank of Richmond, shifts the focus to highly skilled immigration.
Its analysis concludes that restrictions affecting H-1B visas can reduce the supply of specialized workers in fields such as artificial intelligence, software engineering and health care.
When companies cannot hire specialized talent in the United States, the report notes, many respond by expanding operations abroad. Previous research cited in the analysis found that employers often hire workers overseas after visa applications are denied.
The report also describes growing competition from countries such as Canada, which have attracted international graduates and skilled professionals who were unable to remain in the United States.
For industries racing to develop artificial intelligence and other advanced technologies, the researchers argue that access to highly skilled workers has become an important part of maintaining economic competitiveness.
Different studies, one broader picture
Each report asks a different question.
The Los Angeles County report examines the local economic effects of immigration enforcement.
The NBER paper explores how historical immigration shaped innovation and long-term growth.
The Richmond Fed analyzes how restrictions on highly skilled immigration affect businesses and the labor market.
Because they focus on different issues, none of the reports alone answers every question about immigration policy. Nor do they determine what immigration policy the country should adopt.
Taken together, however, they point toward a broader economic reality: immigration policies can influence consumer spending, workforce participation, entrepreneurship, investment and innovation in ways that reach far beyond the immigrant community.
Why Latino communities have a stake in this conversation
California’s Latino communities are deeply connected to the industries discussed throughout these reports.
Latino workers make up significant portions of the state’s construction, agriculture, transportation, hospitality and health care workforce. Latino entrepreneurs own hundreds of thousands of businesses across California, employing workers and serving neighborhoods throughout the state.
When businesses lose customers because families are afraid to shop, when employers struggle to fill shifts, or when companies move research and development abroad because they cannot recruit specialized talent, the economic effects ripple across communities regardless of immigration status.
That means immigration policy is not only about who enters the country or how laws are enforced. It is also about the future of local economies, business growth, innovation and opportunity.
What these three reports make clear is that immigration policy is also economic policy. Whether measured in neighborhood businesses, research laboratories or emerging technology industries, its effects extend well beyond the border, touching communities, employers and the nation’s long-term capacity to grow.
