Interesting read out of Marshalltown:
Economist, local business owner discuss potential effects of mass deportation plan
Dec 14, 2024
Lana Bradstream
Staff Writer
With the incoming Trump administration threatening mass deportations shortly after his inauguration in January, many residents are waiting to see what happens and worrying about the economic effects. Marshalltown has already dealt with such a situation before.
On Dec. 12, 2006, Immigration and Customs Enforcement (ICE) conducted a raid on the Swift & Company (now JBS) pork plant. ICE agents arrested 90 people and transported them to Camp Dodge in Johnston.
Afterward, the Immigration Policy Center reported a three percent decrease in total retail sales in Marshalltown. Swift experienced a loss between $45 and $50 million. Fewer homes were sold to Latino families, and there was a 50 percent increase in the number of foreclosures on Latino households.
Anil Kumar, an economics professor at the University of Iowa’s Tippie College of Business, said the 2006 effects are not surprising. He predicted Marshalltown would experience similar or greater effects if a similar situation unfolds in the future.
“Large-scale deportations would likely compound these issues, affecting not only workers at JBS but also the broader immigrant community, which supports local businesses and housing demand,” Kumar said. “Businesses may struggle to fill vacancies, and a reduced population would lead to lower consumer spending, negatively impacting multiple sectors of the local economy.”
He said beyond labor shortages and reduced consumer spending, Marshalltown could face higher costs for housing and services. A smaller workforce at JBS could increase production costs, potentially leading to higher prices for consumers. Kumar added the housing market might also suffer, with fewer people available to buy or rent homes, potentially lowering property values and tax revenues.
“The overall decline in economic activity could strain local government budgets, affecting services such as schools, infrastructure and community programs,” he said.
Alfonso Medina, the owner of La Carreta Mexican Grill, has spoken to many Marshalltown residents and said the primary concern expressed to him is the devastation of the local economy — a permanent loss of jobs and businesses, unsold homes and buildings, reductions in home values and population and Social Security benefits being placed in jeopardy.
“I’m in a network of hundreds of business owners in the food service industry across the country,” he said. “Let’s remember the hospitality industry, which includes restaurants, bars, hotels and more, employs the largest number of workers in this country.”
Medina said recent studies reveal undocumented immigrants contribute billions of dollars to the national economy each year, primarily through taxes paid on their earnings.
“Although they are not eligible for many government benefits, they have paid around $96.7 billion in federal, state and local taxes in 2022 alone, with a significant portion going towards Social Security and Medicare, despite not being able to access these programs themselves,” he said. “Deporting all undocumented individuals, including those with no criminal background, would directly impact us as citizens.”
Kumar agreed with Medina about the significant effects on Marshall County’s economy.
“Immigrants play a critical role in the U.S. workforce, and this is particularly true at the JBS plant and in many small businesses in Marshall County,” he said. “Deportations would reduce local labor availability, making it harder for businesses to operate efficiently. Industries like agriculture, food processing and hospitality, which heavily rely on immigrant workers, would be hit especially hard. This could lead to higher labor costs for businesses, reduced output, and potentially higher prices for goods and services in the area.”
According to Medina, the fears of severe economic impact are widespread among small business owners if there is a mass deportation of farm workers, employees and customers. More than 50 percent of the agricultural labor force in the country are undocumented workers. He asked how businesses would get produce, and, for the small portion that would be available, how much those would cost.
“The cost would have to be transferred to the consumer,” Medina said. “If the consumer isn’t willing to pay for higher costs of goods, then those businesses would be forced to shut down, resulting in the permanent loss of tax generating establishments and millions of jobs.”
To help mitigate the potential impact of deportations, Kumar suggested business owners and residents do four things:
Advocate for policies or programs supporting legal immigration pathways to stabilize the workforce;
Educate elected representatives on the fiscal benefits of immigration and the potential economic harm of deportations, including reduced tax revenues and weakened fiscal health;
Build networks and partnerships to attract and retain workers from other areas and;
Businesses which might get hit hard – agriculture and construction – should work with governments to plan for workforce disruptions.
Crime
Tom Homan, the incoming ICE director, has said in various national media interviews that the deportations will begin with immigrants who are a threat to the public. Where or if Marshall County is on the list of locations receiving focus is not known. During an October 2023 Senate Judiciary Committee meeting, Sen. Chuck Grassley (R-Iowa) presented a list of four Iowa counties which had the presence of three cartels — the Sinaloa, the BLO and CJNG. Marshall was the only county where all three were known to be present.
Grassley received the information from county sheriffs in Iowa, including Marshall County Sheriff Joel Phillips. According to Phillips, based on criminal drug activity, all three of the cartels are still active in Marshall County.
Grassley was unable to say where Marshall County would fall in the list of deportation priorities, but stressed the importance of keeping Iowa residents safe.
“My top priority is ensuring the safety of Iowans and Americans. I plan to work closely with President Trump’s administration to crack down on cartel activity and secure our nation’s borders, while utilizing current pathways for legal immigration,” he said.
Phillips said it is likely the federal agencies will identify cartel territories within the United States and focus on certain areas within those territories.
“The territories span several states, and I don’t know if Marshall County would be one of the areas,” he said. “I think most likely, with the crimes going on in trafficking, they will evaluate before they begin to dismantle. That is my own opinion. It will take a lot of coordination between state and federal agencies.”
While some members of the public might expect crime to reduce after deportations begin, Kumar said research does not prove the outcomes meet the expectations.
“Prior increases in deportation rates have done little to alleviate local police resource constraints,” he said. “This suggests that mass deportations may have minimal impact on public safety while disrupting the economy and community cohesion. While cartel activity in Marshall County might present unique challenges, it is important to note that criminal activity among undocumented immigrants is minimal. In this case, mass deportations could impose greater economic and social costs than the relatively small increase in criminal activity they aim to address.”
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