Opinion: How immigration raids threaten California’s economy and homelessness response

Los Angeles businesses have begun reporting a decrease in economic activity and a loss in business revenue. The reason isn’t inflation, supply chain delays or increased competition. It is due to rising fear regarding immigration raids. Workers are afraid to show up for work, fearing they could be targeted by immigration enforcement. Across communities, residents are staying home, too fearful of raids to go to school, visit clinics, or shop – leading to a visible decline in public activity and economic participation.

This crisis didn’t arrive without warning. Donald Trump campaigned on the promise of increased immigration enforcement and mass deportations. In January 2025, the administration rescinded long-standing federal guidance that had limited immigration enforcement in “sensitive locations” such as schools, hospitals, places of worship and homeless shelters. The original protections, outlined in memos from 2011 and 2021, were rooted in a simple idea: that some places are so central to community life that fear should never be a barrier to access. But with those protections gone, California’s immigrant communities are now facing the full weight of enforcement everywhere.

The financial consequences of immigration raids have been immediate and profound. California’s economy, powered in part by immigrant labor, is showing signs of strain; one in three workers in California are immigrants. In agriculture, workers are disappearing from fields. In hospitality, restaurants and hotels are short-staffed. In childcare and caregiving, families are scrambling to find support. 

 Undocumented immigrants in California contribute over $8 billion annually in California state and local taxes. Immigration raids not only threaten immigrant families, they destabilize entire industries and regional labor markets. A new report by the Bay Area Council Economic Institute estimates that mass deportation in California could lead to a total economic loss of $278 billion, close to 9%, in the state’s Gross Domestic Product (GDP). 

In addition to significant economic consequences, we are seeing the erosion of public life and a decrease in the use of safety net services. In clinics across California, medical staff are reporting a drop in patient visits. School administrators have seen an uptick in absences. Crimes are likely going unreported. What is happening is a result of fear. When the threat of detention hangs over public institutions, people retreat into the shadows, even at the cost of their health, education and safety.

We saw a glimpse of this during the first Trump administration. Fear of immigration enforcement and the threat of public charge led many immigrant families in California to avoid essential safety net services. This resulted in declines in enrollment in programs like Medi-Cal and CalFresh, reduced clinic visits and fewer children accessing school-based resources, even when they were eligible, even though only one in five California children live in mixed-status households. Disenrollment in safety programs is a troubling trend given that safety net programs reduce the negative impacts of poverty and produce cost savings in the long run, their economic impact exponentially outweighing their cost. 

The shifts occurring will potentially have dire consequences for California’s homelessness crisis. With over 180,000 people already living unhoused, we cannot afford to push more individuals into housing instability. Yet that’s exactly what will happen as immigrant families increasingly fear seeking services and experience decreased household incomes due to heightened immigration enforcement in workplaces. 

Outreach teams working with unhoused populations have frequently reported that fear of immigration enforcement makes it difficult to engage immigrants and mixed-status families in need—whether that’s shelter, medical care or legal support. What is currently happening in California will deepen this mistrust, requiring greater efforts to work with trusted community partners to reach vulnerable individuals.

Many grassroots organizations are mobilizing rapid-response networks, mutual aid and "Know Your Rights" campaigns to protect immigrant families and maintain access to essential services. California leaders need to continue to speak up and support programs and policies that protect our immigrant communities. This includes standing up to ensure that all Californians, regardless of immigration status, have legal support through the Equal Access Fund and committing to ensuring access to safety net services for all Californians, such as healthcare eligibility expansion under Health Care for All. 

This moment requires boldness — from community members, from leaders, from all of us. It’s not just immigrants who suffer when families go hungry, when kids miss school, when sick people avoid care and unhoused people avoid shelters and service connections.  

We all do.  

The Trump administration’s policies may be designed to create fear, but they come at the expense of collective safety, dignity and economic well-being. Without further action and protections, California will soon be unable to reverse the economic damage of these immigration raids.