The "chilling effect" of deportations

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This is Planet Money from NPR. I wanted to stop here because I just wanted to stand in front of these beautiful dresses.
Yes, they're gorgeous. Back when I was 15, the dresses were not as pretty as they are now.
That's how everyone probably feels. Jennifer Aguilar and I are standing in front of a shop that sells quinceañera dresses.
Those sparkly ornate gowns girls wear for their coming-of-age parties. We're in the Little Village neighborhood of Chicago.
More than 75% of people here are Mexican or Mexican-American, including Jennifer. She was born here, raised here, got her quinceanera dress here.
What did your dress look like? I was very emo. So it was black and white and pink chucks.
Oh, that is cool. Yes.
Okay. Yes.
You were styling. Jennifer is now executive director of Little Village's Chamber of Commerce.
And to be clear, Little Village is not little. The neighborhood's main corridor is about two miles with more than

a thousand shops and businesses. After the Magnificent Mile in downtown Chicago, Little Village generates the most money in the city.
And it is a significant tourist destination. People from all over the country come to eat and shop and, yes, buy a dress at one of the dozens of quinceanera shops.
But today, it is very, very quiet. Yes, it is.
And that is because about a month before President Trump was sworn into office, his incoming border czar announced that Chicago would be one of the first targets for raids by Immigration and Customs Enforcement, sometimes called ICE. People assumed Little Village would be particularly high on the target list.
And now I'm standing here with Jennifer just a few days after Trump has been sworn in and after his first flurry of executive orders. There haven't been raids in Little Village yet, but Jennifer says the moment Trump was sworn in, the neighborhood changed.
I think the rumors that are going on are they're going to come to the businesses, they're going to come to the restaurants, they're going to come here and even if they're not looking for you, if you're there, then they can snatch you. And I think that those are the types of messages and rumors that are generating this fear.
People are afraid of going out to buy something at the grocery store and never coming back to their families. Hello and welcome to Planet Money.
I'm Erika Barris. And I'm Amanda Aronchik.

President Trump has promised the largest deportation in history.

Today on the show, what that looks like on the ground, in a community that fears being targeted.

We'll also look to a recent mass deportation effort.

And how it gave economists an unusual chance to study what really happens when hundreds of thousands of immigrant workers disappear from the labor market. This message comes from Fidelity Wealth Management, where a dedicated advisor gets to know you and your goals to build a comprehensive plan to help grow and protect your wealth.
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Member NYSE SIPC. Little Village is not totally a ghost town.
We see a fair number of reporters, like us, coming and going. There are also non-reporters, just a handful of people who seem to be going out their business, going to the dentist or to the grocery store.
Right now, it's around the time that kids are coming out from school.

Usually you would see the kids hanging out, even with the snow,

with their parents, with their friends.

And right now it seems like it's very kind of the less time

they can spend on the street, the better.

Jennifer Aguilar, our guide slash lifelong Little Village resident

slash head of Chamber of Commerce, says people are laying low right now. And we felt that on the street.
When we stopped people to talk, we heard that people were scared to go into work, that people were keeping their kids home from school. One person who told us she didn't have legal papers was worried about what would happen to her family if she had to go back to Mexico.
Her daughters only ever lived in the U.S. But when we asked all of those people if they'd feel comfortable being recorded, they were like, uh, no, not at all.
Jennifer was not surprised. She said people are scared that talking to the media will put a target on them.
What has surprised her, though,

is how quickly the mood has changed in this area.

Jennifer walks us up in front of what looks like a used clothing store.

This is like a second-hand boutique.

There's a sign, plain white paper,

with handwritten black letters.

Right here they put under door,

know your rights.

Oh, I didn't even see that.

Keep silent. Don't sign in, talk to your lawyer.
And then below that is like a little word of encouragement. They're like, rise above.
You can read it in Spanish. Oh, in Spanish? Arriba nuestra gente.
No hay que perder el ánimo. Esto también pasará.
Basically, keep your head up. This too shall pass.
Were you expecting a change like this would come? Or has this been a surprise in any way? I was expecting it, but not as heavy and as soon. But we didn't think it would be on day one.
And as impactful as it's been so far. It's only been three days.
I know. That's what's insane, that it's only been three days.
As of this recording, five days into the Trump presidency, there have been more than 60 immigration-related executive orders or agency directives. They affect everything from refugee and asylum programs to changing where immigration arrests can occur to challenging the very idea of birthright citizenship.
That last one has already been temporarily blocked by a judge. We reached out to the White House for comment and did not receive a response.
But what seems to be true is that these new immigration policies are, in some ways, a response. In the last few years, under President Biden, southern border crossings more than doubled to record high levels, about two million people a year.
And while those crossings are through Mexico, only about a third of the people crossing were born in Mexico. The others come from Central and South America, and there are people coming from as far away as China, India, and Senegal.
Immigration and Customs Enforcement says they've been making individual arrests, as they were also doing during the Biden administration. And in terms of the kinds of big surprise raids at businesses or public places, there's reportedly been at least one of those sweeps.
The mayor of Newark, New Jersey, announced this week that agents raided a local establishment and detained undocumented residents as well as U.S. citizens.
I think lots of people who study immigration are anxiously waiting to see what the Trump administration does this week. Chloe East is an associate professor of economics at University of Colorado, Denver, and she has spent many years studying deportations.
And she says it's worth noting that so much of the attention this week has been around these raids. And raids are just one strategy that the government uses to find people without legal status and deport them.
Raids are typically smaller scale enforcement events meant to create a lot of fear in the local community and make headlines, but don't end up with many people being arrested or deported. What Khloe is waiting to see is what else is happening besides the raids.
How the Trump administration plans to systematically deport millions of people as they've promised. Because she has carefully studied this very thing.
A time when the U.S. government changed policies to make deportations easier.
It's a perfect case study from not very long ago. It was actually mostly implemented and run in the first Obama administration.
When President Obama left office in 2017, he had been nicknamed the deporter in chief. And that is in part because of this one particular mass deportation effort.
It was a program that technically began under George W. Bush right before Obama took office, but Obama expanded it.
It was this big post-9-11 initiative called Secure Communities. You can actually find a law enforcement training video from 13 years ago when this program was being expanded.
The training video? Kind of cheesy. We see an American flag, the Constitution, the Statue of Liberty, more American flags.
As a law enforcement official, you've taken a noble and honorable oath to protect and serve. This video was made for local law enforcement agencies, you know, like police departments.
And it was made by the Department of Homeland Security, or DHS, because under this new program, those local police departments were suddenly a big part of this national deportation effort, Secure Communities. First of all, what is Secure Communities? Very simply, it is an initiative to help DHS identify removable aliens arrested for crimes.
Under Secure Communities, your agency's fingerprint data is now shared with DHS. So what Secure Communities did is sort of automate the process by which anybody who's arrested will have their immigration status checked.
Under this program, when anyone was arrested for a criminal offense, their fingerprints would automatically be sent to an ICE office, you know, Immigration and Customs Enforcement. And that ICE office would run the fingerprints through their database to see if this person might be eligible for deportation.
And then if they might be eligible for deportation,

then ICE would issue a detainer order and the local law enforcement agency

would have to hold the person they just arrested

until ICE could arrive and see if the person

was indeed actually eligible for deportation.

So yeah, the message from DHS to local law enforcement was this doesn't really change anything you do. We'll make it easy.
The most important message is that secure communities does not change who you question or arrest. You have taken an oath to uphold the Constitution.
You also act as a guardian of civil rights and liberties. Thank you for taking the time to watch the video today.
In that first kind of era of secure communities between 2008 and 2014, about 400,000 people were deported. Obama actually deported lots more people than that.
The 400,000 plus number is just from secure communities. And Chloe says it's worth noting that 17% of those people were arrested but not actually convicted of a crime.
And of the people who were convicted, 79% of them were convicted for nonviolent crimes. You know, things like traffic violations or violating immigration law, which, of course, are crimes.
And 21% of the people convicted were deported for violent crimes. But Chloe's point is...
So we shouldn't think of secure communities as only picking up people who have been convicted of murder. Now, we don't know if this new Trump administration plans to use this exact program.
But Trump did use a version

of secure communities during his last term. And, Khloe says, it seems clear he's already approaching

immigration and deportation in a similar way, leaning on local law enforcement to be part of

the effort and trying to expand the list of crimes that can get someone deported.

And similar to the 2000s, Trump has justified mass deportation as a safety issue, national security. What's different, though, is that there's also this economic piece to his promises.
There's this idea that mass deportation should help American workers. And this American workers justification, this is what Chloe East has specifically been studying.
What do people generally assume is going to happen to U.S. citizens when people are deported? Yeah, so if you just sort of take the simplest economic supply and demand diagram, if you all of a sudden remove a lot of people from the labor market through detentions and deportations, we think that labor supply goes down and that increases the wages of workers who are left behind, which should be primarily U.S.
citizen workers. In other words, under that simplest sort of diagram of all this, you might assume that reducing the number of immigrants would increase jobs and wages of U.S.-born workers.
The other assumption that is embedded in that simple supply and demand diagram is that all workers are interchangeable. So if we remove one worker without authorization, that U.S.-born workers will just simply slot into the jobs left behind by that unauthorized worker.
In economics terms, that model assumes that people without legal status act as a substitute for American citizen workers. And Chloe says that is a pretty big assumption that can be hard to test.
But as she looked at the Obama-era Secure Communities Initiative, she realized that it was an ideal natural experiment. It had this sort of staggered rollout, county by county, which was useful because it would let Chloe study what happens when the program suddenly switched on in one place but not in another place.
Plus, once Secure Communities started somewhere, it was pretty much a uniform program of deportation.

It didn't matter a place's political leanings, their own local views on immigration, how local law enforcement worked. It was just sort of done automatically when people's fingerprints were taken and entered into this database.
there wasn't a lot of flexibility that, you know, the police force in Texas could

implement the policy differently than the police force in California or other places in the U.S. Chloe started to study this back in 2017, and her team's basic question was, did all those deportations ultimately help U.S.
workers? We find that mass deportations do not have a positive impact for the U.S. labor market as a whole or for U.S.-born workers.
What they found was that when people without legal status were removed from a labor market, it did not lead to more jobs for U.S. citizens.
It had the opposite effect. It led to fewer jobs for U.S.
citizens. We find that for every 13 fewer unauthorized immigrants who are working in a local labor market, that leads to 10 fewer U.S.-born workers who are working in that same labor market.
Okay, that seems very dramatic. Right.
That's a big effect. It is.
So why? Why might that be happening? Well, Chloe says there are two main reasons. Reason number one, simply when a bunch of people are removed from an economy, when they've been deported, this has an economic impact.
Unauthorized immigrants, as everybody does, go out to their local restaurant. They get haircuts.
They shop at the grocery store. Unauthorized immigrants also pay sales tax.
Many of them pay various types of income tax. And all of that helps to stimulate local demand, which also helps to create jobs for everybody in the community, including U.S.-born workers.
And this isn't just about deportations. Chloe says secure communities likely also had a chilling effect.
You know, people would have stopped working, didn't want to leave their homes, or maybe even left the U.S. completely.
All of that would be a hit to the local economy and would cause a drop in jobs for U.S.-born workers. This is exactly what we saw happening in the Little Village neighborhood in Chicago.
But reason number two, most U.S.-born workers and unauthorized workers do not seem to act as substitutes in the real world. When you deport someone who doesn't have legal status in the U.S., that does not mean a U.S.
citizen is going to take that job. Unauthorized workers take the jobs that actually help create more jobs for U.S.-born workers.
So having more unauthorized workers who are willing to take lower paid, more dirty, more dangerous jobs actually helps to create jobs that are complementary to those that U.S.-born workers take. She means complementary in the economic sense.
Complements are goods or services that are used together, as opposed to substitutes, which essentially compete with each other. The way Chloe puts it in her paper, their findings from the Secure Communities Program suggest that many immigrant workers are complements to citizen workers instead of substitutes.
So if you think about like a construction company that's writing a contract to build a new building or to do a remodel, in order to hire a manager for that construction site, that company has to be able to find laborers to actually do the construction. And so the construction site workers are complementary to the construction site manager.
Or take a restaurant. If a restaurant can't find anyone to bus tables, they will hire fewer waiters and waitresses.
And those jobs are typically taken more often by U.S.-born people. Okay, so let's say we're running this restaurant and the unauthorized workers are not there anymore because they've been deported.
Why won't I just offer more money to just pay citizens to work and bust the tables? I could just make it a better job. Right.
That is what we would expect to see in economic theory. That kind of gets back to the basic supply and demand diagram.
That is not what we see happening in reality. We don't see any evidence that employers are offering higher wages.
We don't see any evidence that U.S.-born workers are getting higher wages. Chloe is not the first person to use a big deportation to try and study this stuff.
There is a paper looking at the late 1920s and early 1930s,

where hundreds of thousands of people from Mexico were repatriated out of the United States.

And there was another paper that looked at a time in the 1960s when a change in immigration law

resulted in half a million seasonal workers disappearing from the U.S. labor market.

Both of those studies came to basically the same conclusion as Chloe's, no positive impacts for U.S. labor market.
Both of those studies came to basically the same conclusion as Chloe's,

no positive impacts for U.S. workers.

After the break, how all of this economic theory is playing out in the real world.

Right now, the chilling effect in action. Support for NPR and the following message come from LinkedIn ads.
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Here in Chicago's little village, there's this restaurant that's been around since the 70s. It's one of those places that everyone says to check out.
Nuevo Leon. The best Mexican food.
It was opened by an immigrant. Always a scene.
We got there, and it was this big, beautiful mural building. It sounded wild.
Yeah. It had this big marquee sign out front with these light bulbs that sounded like they were about to explode.
So we went in and it quickly became clear to us that this one restaurant is a microcosm of all the things that economist Chloe East had described. Laura Gutierrez runs this restaurant.
Her dad opened it back in the day. Do you have

some time for us? A couple minutes, not much. Okay.
Should we do it here? Okay. She joined us at a table for her couple minutes and we asked her, what has it been like the last few days? What has it been like? Turmoil.
Everything upside down. People don't know what to expect.
I'm looking around and and it's lunchtime. It's, like, noon right now.
And this is a very big restaurant we're in. But there's maybe...
It holds 170 people. 170 people.
I do not see 170 people in here. And when you came in, you were the only table.
We were the only ones. Is this typical? No.
Even in zero-degree weather? It's not typical. The cold doesn't stop Chicago.
We live in the Windy City. We've been here for 47 years.
I've been cutting this shift down. We've been down to one shift a day.
People are losing. Taxes, revenues, everybody's going to take a loss on it.
You said that there's only one shift this week. That's our producer, Willa Rubin.
Why only one shift? There's one shift because there's not, there's no business. How are you going to be able to pay? Employees, economics, you got to cut down supply and demand.
It's that chilling effect. She's had to half her orders to all her suppliers, cut hours for her employees.
She's going day by day right now. And despite everything, feeling somehow still kind of cautiously optimistic.
We'll see where this prevails. Our president, he's a businessman, I have faith.
I don't think he's going to want to hurt the economy vastly.

If you pull out people from the community like that, you will have USA in shambles.

Our couple minutes with Laura comes to an end. She leaves our table and heads back to work.

Have a blessed one, guys. Thank you.

After we left Chicago, we checked back in on Little Village. It's been two days since our visit and still no raids as of this recording.
Today's episode of Planet Money was produced by Willa Rubin with an assist from Emma Peasley. It was edited by Kenny Malone.

It was engineered by Sina Lofredo and fact-checked by Sierra Juarez.

Alex Goldmark is our executive producer.

I'm Erika Barris.

And I'm Amanda Aronczyk.

This is NPR.