24/7 Wall St.

Los Angeles, with 1.735 million Mexican immigrants, which is 13.3% of its total population, faces major changes if the Trump Administration implements some of its plans to build a wall between the two countries and to deport as many as 11 million people. The city has more Mexican immigrants than any other in the United States by far.

The LA workforce could be decimated if tens of thousands of people have to leave, as the civilian labor force of the city is 5.1 million workers. And, with unemployment at 4.7%, LA could face a radical need for workers if a large number of immigrants left. With an unemployment total of only 239,000, finding replacement workers would be nearly impossible. Businesses that lose immigrants will have nowhere to turn for replacements.

The opening of lots of jobs would seem like a good thing to reach full employment levels in LA. The problem is that sub-5% unemployment is “full employment” according to most economists, since people moving from one job to another are out of work for a few weeks. Other unemployed people include those who quickly leave the workforce altogether.

The labor shortage would be acute in certain parts of the economy that employ large numbers of immigrants. According to the American Community Survey:

Mexican immigrants were much more likely to be employed in service occupations (31 percent); natural resources, construction, and maintenance occupations (26 percent); and production, transportation, and material-moving occupations (22 percent) than the overall foreign- and native-born populations.

There is no precedent for a large American city that has been quickly stripped of so much of its workforce. For LA, the consequences could be terrible.