Trump’s mass deportation plan could have a big impact on inflation

The US has cooled inflation in 2024, but economists warn that President-elect Donald Trump’s plan to deport undocumented immigrants en masse could have a big impact on prices.

“There will certainly be economic impacts,” said David J. Bier, director of immigration studies at the Cato Institute. “There will be supply chain problems. There will be an increase in prices, a decrease in services.”

Experts worry that deporting large numbers of undocumented immigrants at once could leave a hole in the workforce. A 2023 study in the Journal of Labor Economics 44,000 US-born workers could lose their jobs for every 500,000 immigrants who drop out of the labor force.

“Immigrants, especially undocumented immigrants, are much more likely to work in jobs that create the goods and services that we’re seeing prices rise,” said Chloe East, a research associate at the National Bureau of Economic Research. He was also one of the researchers behind the 2023 study.

“We can’t say for sure what the consequences will be,” he said. “But based on what we know from past mass removal efforts, it appears that goods and services in which unauthorized immigrants are highly concentrated, such as construction and agriculture, are likely to see prices rise as a result of the mass deportation effort, rather than fall.”

see the video above to find out what other economic effects mass deportations could have on the US