Explained | What mass deportations would do to New York City's economy

New York: As immigration raids got underway in New York City this past week, complete with a visit from the new homeland security secretary, Kristi Noem, who showed up in body armor talking about "getting the dirt bags off the streets," it was hard to see where all of these roundups were headed.

In the early days of the second Trump presidency, it remains unclear to what extent this sort of force amounts to a performance of authority versus an expression of commitment to it. On Tuesday, 39 arrests were made in and around New York City, where the emphasis has been on targeting gang members and others suspected of violence -- and where the economy is as reliant on the labor of workers living in the country illegally as plants are on sunlight. Given the prospect of mass deportation -- the expulsion of working people who are not murderers or rapists or drug dealers or otherwise dangerous -- the consequences for New York's economy could be quite severe.

So much recent political rhetoric has succeeded in portraying people living in the country illegally as driven to crime rather than contribution, which obscures certain realities. As a group, immigrants lacking permanent legal status paid $3.1 billion in New York state and local taxes in 2022, for example, a sum equal to the city's early education budget for the current fiscal year.

That number comes not from a left-leaning human rights group intent on fostering sympathy for people who crossed the border illegally, but rather from the wonky Institute on Taxation and Economic Policy, a nonpartisan Washington think tank. The organization's research also tells us that nationally, more than a third of the tax dollars paid by immigrants lacking permanent legal status go toward payroll taxes, which are aimed at backing entitlement programs that these workers are not entitled to access.

Some other facts: In New York City, according to municipal data, more than half of immigrants in the country illegally have been in this country for more than a decade; 41 per cent have been to college, and a quarter have a bachelor's degree. Last year, a report from the mayor's office looking at immigrant demographics found that 80 per cent of residents lacking legal status were in the workforce, compared with two-thirds of New Yorkers born in this country -- in part because most immigrants are of prime working age, between 18 and 64. (This is especially meaningful because the city's population is getting older: Between 2000 to 2023, the share of people who are 65 and over grew by 53 per cent, 17 times faster than the population overall.)

Food and restaurant businesses form one category where a loss of workers would be acutely felt. According to a new report from the Fiscal Policy Institute, another nonpartisan research group, more than 42,000 chefs, cooks, preppers and servers lacking legal status are working across the state, to say nothing of the delivery workers who make the city's insatiable on-demand culture possible.

Child care is another sector that would be affected. There are 7,000 caregivers lacking legal status in the state, according to Emily Eisner, an economist at the FPI. Median child care costs in New York City had already risen by about $5,000 per child between 2018 and 2023.

Recently I asked her about the ways in which the depletion of certain labor pools might play out. The group's report found that if just 1 in 10 people lacking legal status were deported or sent to a detention camp, the result would be a loss of $310 million in state and local tax revenue. President Donald Trump has suggested that thousands of migrants -- "criminal aliens" -- could wind up held at Guantanamo.

Virtually no business in New York is as dependent on workers living in the country without legal permission as the construction industry, where supply shortages and high interest rates have already been driving up costs over the past few years. There are more than 48,000 construction workers, carpenters, painters and paper hangers lacking permanent legal status in the state, making up a quarter of the sector's labor force, according to the FPI report, which drew on data from the Center for Migration Studies.

If the threatened mass deportations were enacted, Eisner explained, the construction industry would not, in the short term, be able to replace the lost workers. "Right now, we're in the New York budget cycle, and we're all acutely aware of the housing crisis," she said. "Even with the workforce as is, we're unlikely to meet targets." Delays only further increase costs.

Elizabeth Velez, president of the Velez Organization, a Manhattan construction services firm, elaborated. "Construction thrives on predictability and certainty, and when we take that out of the equation, that is when things get crazy in terms of price and scheduling," she said. "And in this business, scheduling is money." She is also an advocate for the industry in Albany and is in touch with other employers in the building trades. Some workers, she has heard, were not showing up to jobsites this past week out of fear of deportation.

Many work as day laborers for small-scale contractors, she said, and many of these businesses are minority-owned. These workers remind Velez of her father, a carpenter who founded his own company after he was put out of commission by a fall on a jobsite in the early 1970s. This past week, she said, she noticed fewer workers showing up for hire at the Home Depot on Gun Hill Road in the Bronx, where contractors, picking up supplies in the morning, often gather the people they need for the day ahead.

"Like everything, we don't know what's happening," Velez said. And the mood feels different to her than during the last Trump administration. In an indication of what might come, federal law enforcement made more than 5,500 arrests across the country between Jan. 22 and Jan. 28, according to numbers from US Immigration and Customs Enforcement. To put that figure in perspective, early in 2017 it was major news when federal immigration officials arrested 600 people in a week.

"It feels like they have had four years to plan," Velez said, "and they're ready on Day 1."