Deportation Protection Changes and U.S. Labor Market Impact Analysis

Based on my research, I can provide you with a comprehensive analysis of how changes to deportation protections may impact U.S. labor markets and immigrant-dependent sectors.

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On February 9, 2026, the

issued a significant ruling allowing the Trump administration to proceed with terminating for approximately 89,000 migrants from Honduras, Nepal, and Nicaragua [1]. The court determined that the administration could likely demonstrate “legitimate” reasons for ending these protections, effectively lifting a previous injunction by a federal district judge in San Francisco [1]. This ruling represents a pivotal moment in immigration policy, with substantial implications for the U.S. labor force.

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The agricultural sector faces particularly acute vulnerability to changes in deportation protections, given its heavy reliance on immigrant labor for labor-intensive harvesting and processing operations.

• Approximately
  25% of farm labor
  is composed of unauthorized or immigrant workers [3]
• In harvesting and sorting operations, this figure can reach up to
  33%
  [3]
• Over the past five years, the farmworker population has declined by
  23%
  , with the migrant labor force dropping
  37%
  [4]

• Immigration enforcement from 2020-2025 caused
  20-40% workforce reductions
  in California’s crop-growing sector [2]
• Resulting in an estimated
  $3-7 billion in crop losses
  [2]
• Produce prices have risen
  5-12%
  due to labor shortages [2]
• A projected
  9% increase in food prices
  broadly across the sector [3]

When immigrant labor becomes unavailable, agricultural operations face severe disruptions including unharvested fields, reduced crop yields, quality degradation, and increased spoilage. Farmers have been forced to reduce herd sizes, sell livestock, or shift to less labor-intensive operations. Many operations have scaled back acreage, sold portions of their farms, or exited the market entirely rather than invest in expensive automation [4][5].

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The construction industry represents another sector with significant dependency on immigrant workers, particularly in specialized trades.

• 19% of construction workers
  are unauthorized immigrants [3]
• In specialized trades, this percentage is substantially higher:
  • Roofing: 30%+
  • Drywall: 30%+
  • Concrete work: 30%+
    [3]
• An estimated
  1.5 million construction workers
  (approximately
  14% of the sector
  ) could be affected by mass deportation efforts [3]

• Historical precedent from the
  Secure Communities expansion (2008-2013)
  shows:
  • 5-10% increases in housing prices
    in areas with high deportation activity [3]
  • Reduced construction activity with no lasting wage gains for native workers [3]
• June 2025 data shows a
  0.1% employment decline
  in construction, triggering project delays and higher labor costs, particularly in Southern states [2]

The removal of construction workers creates a negative labor supply shock that shrinks productive capacity, slows project timelines, and drives up building costs. The specialized nature of trades like roofing, drywall, and concrete work makes these positions particularly difficult to fill with native workers, even in times of unemployment [3].

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The hospitality sector faces substantial workforce gaps that are already manifesting in measurable economic impacts.

• The industry has sought an additional
  64,716 H-2B visas
  to fill workforce gaps [2]
• Industries relying heavily on immigrants, including accommodation services, saw job postings increase
  77%
  from 2019 to 2021 [2]

• Projected
  $60-110 billion reduction in consumer spending
  by 2026 [2]
• Workforce losses estimated at approximately
  1 million workers
  across hospitality, childcare, cleaning, and food preparation combined [3]
• These positions are characterized by working conditions (irregular hours, physical demands, lower wages) that make them difficult to fill with native workers regardless of unemployment levels [3]

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Economic analysis indicates that mass deportation represents a significant

to the economy:

• GDP loss projected at 2.6-6.8%
  , comparable to or larger than the Great Recession [3]
• This figure is derived from the removal of approximately
  8-10 million mostly prime-age workers
  from the labor force [3]

The impact on wages is complex and differentiated:

• Short-term
  : Low-skill native workers might experience
  1-3% wage gains
  due to reduced labor competition [3]
• Long-term
  : These gains are ephemeral as firms respond by cutting hours, reducing output, or accelerating automation [3]
• Higher-skilled workers
  (approximately two-thirds of the U.S. workforce) face
  long-run wage declines of 0.5-2.8%
  due to the loss of complementary low-skill labor [3]

The termination of TPS programs carries substantial fiscal consequences:

Category	Amount
Up-front deportation costs	$315+ billion
Annual enforcement costs	$88 billion
Federal tax revenue loss	$46.8 billion
State/local tax revenue loss	$29.3 billion [3]

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The economic footprint of TPS holders demonstrates the significant role these workers play in the U.S. economy:

• Contribute nearly
  $6 billion annually
  to the U.S. economy [6]
• Pay
  $1.56 billion
  in combined federal, state, and local taxes annually [6]
• Work in critical sectors including healthcare, manufacturing, and service industries [6]

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The human cost of deportation policy changes extends beyond economic metrics:

• 5+ million U.S.-citizen children
  live in households with at least one unauthorized parent [3]
• These children could face an immediate loss of approximately
  50% of household income
  [3]
• This would increase reliance on public assistance programs and create intergenerational economic disruption [3]

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The termination of deportation protections represents a multifaceted challenge for U.S. labor markets. While proponents argue that reduced labor competition may benefit native workers, comprehensive economic analysis suggests:

1. Short-term wage gains
   for certain low-skill workers are likely to be
   temporary and modest
2. Long-term consequences
   include reduced GDP, higher prices in labor-intensive sectors, and potential wage depression for higher-skilled workers
3. Sectors most vulnerable
   include agriculture (20-40% workforce reduction risk), construction (14% workforce exposure), and hospitality (severe staffing shortages)
4. Food prices
   could rise significantly (estimated 5-12% in produce, 9% broadly) [2][3]
5. Fiscal costs
   of enforcement and lost tax revenue substantially outweigh any potential labor market benefits [3]

The appeals court ruling permitting TPS termination for nearly 89,000 individuals from Honduras, Nepal, and Nicaragua represents a significant expansion of enforcement authority, with implications extending well beyond these specific populations to the broader immigrant-dependent sectors of the American economy [1].

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[1] The Straits Times - “US appeals court lets Trump continue ending deportation protections” (https://www.straitstimes.com/asia/us-appeals-court-lets-trump-continue-ending-deportation-protections)

[2] AInvest - “Assessing the Economic and Political Risks of Federal Immigration Enforcement” (https://www.ainvest.com/news/assessing-economic-political-risks-federal-immigration-enforcement-state-economies-2601/)

[3] Econlib - “The Deportation Labor Shock” (https://www.econlib.org/econlog/the-deportation-labor-shock)

[4] WSU News - “Automating the harvest: WSU works to ease labor shortages on the farm” (https://news.wsu.edu/news/2026/02/05/automating-the-harvest-wsu-works-to-ease-labor-shortages-on-the-farm/)

[5] AgDaily - “Perspective: Who’s in Line to Do the Work in Agriculture?” (https://www.agdaily.com/insights/perspective-whos-in-line-to-work-in-agriculture/)

[6] FWD.us - “New Data Reveals the Immense Human and Economic Cost of Terminating Haiti Temporary Protected Status” (https://www.fwd.us/news/new-data-reveals-the-immense-human-and-economic-cost-of-terminating-haiti-temporary-protected-status/)