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Economic Impact of Trump’s Immigration Policy: Lower Wages and Higher Deficit

Release Date
2025-07-27
Media
MEZHA
Summary
Former President Donald Trump's proposed mass deportation policy, a key part of his second-term agenda, could significantly harm the U.S. economy, according to a new analysis by the Penn Wharton Budget Model. The study warns that deporting large numbers of unauthorized immigrants would reduce GDP, lower average wages, and increase the federal budget deficit.

If 10% of unauthorized immigrants are removed annually, the deficit could rise by $350 billion, GDP could shrink by 1%, and wages could fall. Over 10 years, costs could approach $1 trillion, GDP could decline by 3.3%, and average wages could drop by 1.7%.

While low-skilled U.S.-born workers might benefit from reduced competition—potentially seeing a 5% wage increase by 2034—highly skilled workers would likely suffer, as low-skilled immigrants often complement their roles. These workers could lose an average of $2,764 annually.

The report emphasizes that low-skilled immigrants play essential roles in industries like agriculture, construction, and hospitality. Deporting them could lead to labor shortages and price increases. Economists also warn that with an aging population and a shrinking workforce, immigration is increasingly vital for economic stability.

The White House responded by highlighting the social and financial costs of illegal immigration, including crime and housing pressure. However, experts argue that current immigration policies are economically unsustainable and stress the need for comprehensive reform that aligns with labor market demands.
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