A new LAEDC report shows how fear from immigration enforcement is reshaping daily life—and hollowing out Latino small business corridors.
Updated February 2026 data from the Los Angeles Economic Development Corporation (LAEDC) and the Department of Economic Opportunity (DEO) reveal that federal immigration enforcement has created a pervasive climate of fear in Los Angeles County. That fear isn’t just psychological—it’s reshaping economic behavior, disrupting neighborhoods, and accelerating losses for the small businesses that form the backbone of local Latino economies.
For many entrepreneurs, this isn’t an abstract trend. “I don’t feel defeated, I feel angry and empowered,” says Corissa Hernández, owner of Nativo Highland Park and co-founder of multiple local ventures. “We need to educate the community, share information, and fight. … We can’t control ICE, but we can control our reactions.”
The report documents widespread avoidance of public spaces—parks, transit, stores—due to fear, with interviewees invoking fear-related language nearly 300 times. Families report detention of loved ones without notice, and 85% of surveyed students in Long Beach and Los Angeles school districts expressed anxiety about deportation while at school.
Mental health professionals cited “acute emotional reactions, chronic anxiety, and social isolation,” especially among children from mixed status households—a trend that community advocates say compounds long-term economic risk.
Local Economy in Retreat
The economic fallout is stark: enforcement activities were associated with $3.7 million in reported business losses between July and September 2025, with over 80% of surveyed businesses reporting negative effects, and 44% reporting revenue drops of more than 50%.
Over two-thirds of those businesses altered operations, reducing hours or delaying expansion plans. Industries dependent on immigrant labor—including construction, cleaning, and food service—saw some of the deepest disruptions. Transit use also dipped: LA Metro lost about 17,000 monthly riders in vulnerable areas, signaling reduced workforce mobility.
Hernández’s experience echoes these trends. She has championed collaboration among small business owners, hosting networking events and resource exchanges to promote resilience. “When the community hears that a business needs help, they come together, collaborate, and support one another,” she told Parriva, adding that lack of formal city support often leaves entrepreneurs to “survive on our own.”
Structural Economic Risk
LAEDC notes that undocumented workers contribute significantly to local output—an estimated $240 billion nationwide—making their reduced participation a broader drag on economic activity. The report warns that fear-induced pullbacks in consumer behavior and workforce participation threaten the stability of small businesses and the communities they serve.
For Latino neighborhoods across Los Angeles County, the findings underscore a painful reality: enforcement policies are no longer peripheral—they’re shaping who shows up in classrooms, workplaces, and storefronts, with measurable consequences for families and local economies alike.
