Report reveals how immigration raids are affecting Latino businesses

A new study revealed that after the massive and uncontrolled raids started in June 2025 that took place in Los Angeles, Latino entrepreneurs have reported financial stress and instability.

The report “The Cost of Fear: The Impacts of Immigration Enforcement on Small Businesses and Latino Entrepreneurs in LA County” examines the commercial activity near nine enforcement sites, including foot traffic to businesses and the experiences of Latino entrepreneurs across the county. 

There is an estimate of about 4.76 million Latinos or half the population of Los Angeles County and about 28% of the total businesses in the county are owned by Latinos. The report surveyed 75 entrepreneurs who are within half a mile of each immigration enforcement site. 

Rudy Espinoza, CEO of Inclusive Action, a partner organization to the report, said that the federal government’s actions devastated communities and the economy.

“Small businesses and commercial corridors have sat vacant, while business owners and workers struggle and families suffer,” he said. “This research shines a spotlight on the horrific toll these policies have taken and gives our community members a platform to share their truth.”

What seemed like a temporary decline due to the fear of immigration around the area turned into a prolonged financial strain; 59% of the participants reported revenue decline of more than 50% and another 20% of them reported declines between 26% and 50%. About 68% of participants temporarily closed or reduced their operating hours; 51% reported staff missing work due to fear of enforcement.

Nearly one year later, 95% continued to report financial stress; 52% said revenue is not enough as it doesn’t consistently cover operating expenses. Only 43% reported breaking even, with little or no profit.

In order to manage the expenses, some business owners reduced payroll and assumed work previously performed by employees, consolidated locations, took outside employment and postponed or abandoned plans for growth and investment.

Amara Armenta, co-author of the report and director of the Latino Policy and Politics Institute (LPPI) at UCLA, said that the immigration enforcement created an economic shock that extended far beyond the immediate disruption associated with enforcement operations.

“The loss of customers disrupted businesses across sectors and formats, regardless of the owner's immigration status. A year later, many business owners remain financially vulnerable, with fear, uncertainty, and financial strain contributing to worsening health and wellbeing,” she said. 

Effects on businesses and customers

The negative impact of these raids not only affect the businesses financially but also the owners in their physical, mental and emotional health.

Armenta said many of the Latino businesses, which serve as local economy engines, have not recovered.

“They employ neighbors, buy from local suppliers and keep money circulating in their communities. When enforcement drives away their customers and workers, the harm extends to the health, wellbeing and safety of entire communities," she said. 

The report showed that 76% of participants reported a substantial emotional impact. In focus groups, respondents described sustained fear, anxiety, depression, sleep disruption, hypervigilance and stress.

Some participants reported gastrointestinal disorders, panic attacks, worsening chronic conditions and other stress-related illnesses. Several reported beginning new medications, increasing medical visits or requiring hospitalization. Others indicated they had to comfort employees and frightened customers while managing their own anxiety.

In order to prevent more Latino businesses closures or disruptions, the research found that lines of credit and relief mechanisms are important. In L.A. County there are several relief programs directed to small businesses. 

You can find more information at https://opportunity.lacounty.gov/small-business-fund/