Current ICE raids are expensive ($100k per deportation) and seen as brutal. An alternative is to target the economic incentive by levying escalating fines on businesses hiring undocumented workers. This could disrupt the job market for illegal immigration more effectively, cheaply, and humanely.

Related Insights

When ICE raids removed hundreds of undocumented workers from Swift & Co. meatpacking plants, the company faced a crippling labor crisis. Its solution was to aggressively recruit a new, legally authorized, but equally vulnerable workforce: refugees fleeing war and persecution.

Beyond its long-term growth benefits, rational immigration policy can be a powerful short-term tool against inflation. By addressing labor shortages in critical sectors like construction, agriculture, and elder care, an increased and targeted immigrant workforce can directly reduce cost pressures on essential goods and services.

A significant stagnation in job growth since May coincides with both new tariff implementations (reducing labor demand) and stricter immigration policies (constraining labor supply). This combination has created a powerful dual shock that has effectively halted job creation in the US economy.

Contrary to common political narratives, undocumented immigrants are often a net positive for government finances. They are heavily documented for tax purposes (e.g., Social Security) and pay into these systems but are less likely to draw benefits, effectively subsidizing programs for citizens and creating a highly profitable workforce.

America intentionally avoided solving illegal immigration because it serves a crucial economic purpose: providing a flexible, cheap labor force that doesn't draw on social safety nets. This benefits industries and consumers while placing little burden on the state.

U.S. Citizenship and Immigration Services (USCIS) is almost entirely funded by application fees, not taxes. A portion of these fees, including those from H-1B visas, is distributed to agencies like the Department of Homeland Security and ICE to investigate visa abuse and fund enforcement operations.

The US labor market is stuck in a 'low hire, low fire' mode, preventing a more robust recovery. This stagnation is not from a lack of demand but is directly attributed to the combined effects of restrictive immigration controls and the lingering impact of tariffs, which suppress hiring activity and consumer purchasing power.

Restricting immigration halts a key source of labor for essential sectors like agriculture and construction. This drives up consumer costs and could cut GDP by 4-7%, creating a direct path to higher inflation and slower economic growth.

Beyond immediate labor supply issues, restrictive immigration policies, such as for H-1B visas and students, could have pernicious, long-term negative effects on US productivity. By limiting access to high-skilled talent, these policies threaten the country's technological edge and overall trend growth.

Research shows new immigrants are absorbed into the housing market faster than the labor market. A policy shift towards border shutdowns and deportations would therefore likely ease shelter inflation more quickly than it would ease wage pressures, creating an unintuitive economic effect.

Fine Employers, Not Just Raid Workers, for More Efficient Immigration Enforcement | RiffOn