Is California’s economy heading for a deep slump?
A clampdown on migrant labour is adding to concerns about tariffs, a downturn in Hollywood and cost-of-living pressures
Christopher Grimes in Oxnard, California
Mario first crossed the Mexico-US border in search of work more than 35 years ago, starting a journey that ultimately led him to the farms of California’s verdant central coastline.
“Everything is perfect here,” says Mario.
“In agriculture, there is a lot of work.
If you want to work from Sunday to Sunday, you can.”
But he says far less work has been done here since Immigration and Customs Enforcement officers raided farms near the seaside city of Oxnard at the height of the strawberry picking season in June.
At least 35 people were swept up, and since then there has been another raid on a nearby legal cannabis farm, in which one person died.
“Everything has stopped” since the raids.
Usually, Mario — who declined to give his real name for fear of being targeted by immigration authorities — and his fellow workers would be planting seeds for next season’s strawberry, broccoli and celery crops.
Yet many fields are empty.
“I don’t think there’s going to be anyone working,” he says, given the fears in the migrant farming community of being detained.
“There is no sowing.
Everything will go up in price.”
If the fields in Oxnard’s farm country are any guide, US President Donald Trump’s mass deportation programme is starting to take a bite out of California’s $49bn agriculture business, which produces about three-quarters of the fruit and nuts in the US and about one-third of its vegetables.
Nearly 65 per cent of the state’s agriculture workers are immigrants — and more than one-quarter of those, like Mario, are undocumented.
Without them, its agriculture industry would contract by 14 per cent, according to recent estimates by the Bay Area Council Economic Institute, a business association based in San Francisco.
“I don’t understand why the government doesn’t have humanity for us because we bring food to people’s tables,” Mario tells the FT.
“We are not stealing, we are working.”
Immigrants are not just the backbone of California’s agriculture industry, but also its construction, hospitality and home healthcare sectors.
They make up more than 27 per cent of the population in what is now the world’s fourth-largest economy.
Since the crackdowns began, many of these workers are too afraid to report to their jobs, even if they are in the country legally.
Others have been deported or left the US of their own accord as the pressure from immigration police intensifies; ICE arrests in Southern California soared from 699 in May to nearly 2,000 in June, according to data compiled by the LA Times.
The Department of Homeland Security, of which ICE is a part, did not respond to requests for comment.
“There’s such a meanness to what’s happening,” says Rick Caruso, a billionaire property developer who ran an unsuccessful campaign for Los Angeles mayor in 2022.
Farmworkers in the fields of Oxnard. The mass deportation programme is taking a bite out of California’s $49bn agriculture business, which produces about three-quarters of the fruit and nuts in the US and about one-third of its vegetables © J Emilio Flores/FT“To just be rounding people up is incredibly negatively impactful for the economy.
Businesses are closed down now, whether they’re car washes or restaurants.
For the businesses that are operating, people are fearful of showing up to work, whether they’re documented or not because if they’re of Latino background they feel they’re targeted anyway.”
With its large immigrant population, its status as a “sanctuary state” that doesn’t co-operate with federal immigration officers, and liberal political leadership, California has been an ideal proving ground for Trump’s nationwide deportation drive.
His decision to defy local leaders by sending National Guard troops and US Marines to LA in support of the ICE raids generated international attention — and sent a signal to other US cities about the potential cost of resistance.
California, already grappling with severe cost-of-living pressures, the devastation wrought by wildfires around LA, a downturn in Hollywood and the relocation of the headquarters of high-profile companies such as Tesla, may well have the most to lose from the crackdowns.
“Whether they’re detained, whether they’re deported, or whether they are just staying home from work — it matters” to the California economy, says Jerry Nickelsburg, who led UCLA’s Anderson economic forecast.
“This has a significant negative impact.”
According to the Bay Area Council report, California could face annual losses of $275bn in lost wages and economic activity due to the ICE crackdown — and it is not the only Trump policy that could hurt the state.
Mario, an undocumented immigrant farmworker, says: ‘I don’t think there’s going to be anyone working,’ given the fears of being detained by ICE officials. ‘There is no sowing. Everything will go up in price’ © J Emilio Flores/FTAt the Port of Los Angeles, the busiest in the western hemisphere, officials are bracing for tariffs to bite later this year, while the University of Southern California, Stanford and others are weighing job cuts following the president’s dramatic cuts to research funding.
Some Californians feel Trump is deliberately seeking to weaken their state, whose governor, Gavin Newsom, is a likely contender for the Democratic presidential nomination in 2028.
After Trump’s election in November, Newsom issued a proclamation to safeguard “California values”, including protections for immigrant families.
Trump has those liberal values in his sights, says Mary Leslie, head of the Los Angeles Business Council.
“We had the [progressive] values and a strong economy” in Trump’s first term, she says.
“I think the theory for this term is, ‘destroy the economy and then their values will crumble.’”
Caruso adds that Trump “just doesn’t care about Los Angeles or California, and is angry at this region and angry at the leadership here”.
By the time the last flames of the wildfires around Los Angeles were extinguished at the end of January, 55,000 acres had been scorched and more than 16,000 homes, businesses and other structures had been destroyed.
The fires also left behind 4.2mn tonnes of ash, debris and contaminated soil that needed to be removed, work that was done by immigrant workers, who were exposed to toxic air.
“We’re talking about places that were contaminated with all kinds of chemicals and hazards,” says Pablo Alvarado, co-executive director of the National Day Laborer Organizing Network.
“There is waste that we don’t really know about because there haven’t been comprehensive studies about it.
But [the labourers] are going in and removing all of the ash and the smoke damage inside those homes. And it’s thousands of homes.”
Now those immigrant workers are avoiding these damaged areas because they are afraid of ICE agents.
“I can tell you that it is slowing down,” Alvarado says.
“The reconstruction of the burn areas is being impacted right now.”
Once the debris is cleared and building permits are issued, there could be yet another obstacle: a lack of workers to rebuild, thanks to the immigration crackdown, economists and business leaders say.
Karen Bass, LA’s mayor, says more than 40 per cent of the construction workforce is made up of immigrants.
“This is a city dependent on immigrants,” she said in July.
“This is a huge economic blow to our city.”
Leslie, at the LA Business Council, points out that foreign workers also contribute $115bn a year to the city through taxes and spending.
The average undocumented immigrant pays about $7,000 in state, local and federal taxes, she adds.
“We can definitely expect an impact,” she says.
“I don’t think anybody’s confused about the reign of terror we’ve got going on [from the administration].
The question is what can we do about it.”
The amount of construction required in the fire-ravaged Palisades, Malibu and Altadena districts of the city is immense, says Caruso, who has formed a group of business and civic leaders called Steadfast LA to speed up the recovery.
But he is worried there won’t be enough workers to get the job done.
Community members in Oxnard receive boxes of food and vegetables from a non-profit organisation. Non-documented immigrant workers are said to be visiting the food trucks later in the evening for fear of being detained by ICE officials © J Emilio Flores/FT“Many of the building trades, they’re a combination of documented and undocumented workers.
That’s just the reality of it,” says Caruso.
“You’re going to start seeing an impact because of a labour shortage.
It’s not like we have a high unemployment rate, or a pool of people who will readily fill those jobs or that are even trained or qualified to fill those jobs.”
Nickelsburg adds that a number of specific jobs in building homes and apartments, such as hanging plasterboard, are dominated by immigrant workers.
“If you don’t have your full complement of crews, you’re just not going to build as many homes,” he says.
“And that means that there’s going to be less demand for electricians and all of the other people needed to build homes.
That impact is going to be felt.”
This is not just a problem in fire-stricken parts of Los Angeles.
The entire state of California has failed to build enough new houses for decades.
Since 1990, California has added 9.4mn residents but only 3.6mn housing units.
The result has been soaring house prices, which have contributed to rampant homelessness across the state and pushed many lower and middle-income Californians to other states.
Immigrants have helped to keep the economy growing even as many residents have left.
For years, homebuilders have complained that onerous regulations signed into law 55 years ago by then governor Ronald Reagan have tied up construction projects in litigation for years, making it impossible to build enough housing in California.
People attend an anti-ICE rally in Oxnard, California. Nearly 65 per cent of the state’s agriculture workers are immigrants and without them, its agriculture industry would contract by 14 per cent, according to recent estimates © Eric Thayer/Getty ImagesEarlier this year Newsom, who has been one of the president’s most vocal and effective critics, overruled objections from environmentalists and rolled back key parts of the so-called CEQA rules.
The hope is that construction will blossom in a state where more than 185,000 people sleep either on the streets or in a shelter, despite billions of taxpayer dollars being spent to control the problem.
Trump’s tariffs on Canadian lumber may be another obstacle.
“If you don’t have the people to build, you don’t build,” says Nickelsburg.
“And the uncertainty about materials costs is important because lumber comes from Canada, [plasterboard] comes from Mexico, electrical fittings come from China and so on.”
“Tariffs are an issue, interest rates are an issue, immigration is an issue.”
In June, Trump suggested that he could make exceptions for workers in farming and hospitality, saying on social media that immigrants in those industries were “very good, long time workers” and that “changes are coming” to his deportation policies in those fields.
He later told Fox News: “I’m the strongest immigration guy that there’s ever been, but I’m also the strongest farmer guy that there’s ever been.
And that includes also hotels.”
California governor Gavin Newsom. Some people say Trump is trying to weaken the state because of Newsom’s criticism of the president and the fact he is likely to be a contender for the Democratic presidential nomination in 2028 © Rich Pedroncelli/APBut those comments do not appear to have been turned into policy and neither employers nor workers in hospitality industries are dropping their guards, according to Dana Kravetz, a lawyer at Michelman and Robinson who represents a number of hotels in LA.
“I don’t think any employers are particularly relying on [Trump’s] word in terms of where any ICE raid might take place,” he says.
“At hotels and restaurants, I don’t believe anyone’s feeling that what Trump had said gave anyone cover, or a breathe-easy feeling.”
Kravetz says restaurateurs in the city worry about losing immigrant employees, some of whom have been running kitchens for decades.
He adds that the overall atmosphere has hurt tourism.
“It affects people wanting to be out and about — think small cafés, street vendors,” he said.
“It has a massive chilling effect on a community.”
A chill is certainly affecting the farming community in Oxnard.
Roadside vendors selling fresh berries, cherries and melons say business is bad.
Migrant farmers say they are cautious about going to markets to buy food and other necessities, fearing that they may be arrested.
For those still working in the fields, as Mario is, the routine is “go from work straight to home”.
“Many workers are facing an impossible choice: stay home and lose the income you need to pay the rent or go to work and risk not seeing your kids again,” says Lucas Zucker, co-executive director at Cause, a group working with working-class and immigrant communities in California’s central coast.
A building site in Pacific Palisades, Los Angeles. The crackdown on undocumented immigrants has hit the construction sector, slowing the reconstruction of California after wildfires destroyed more than 16,000 structures © Eric Thayer/BloombergAt dusk on a July evening near Oxnard, a large rental truck sits in a parking lot set back from a busy road.
Workers are pulling crates of fresh fruit and vegetables from the back of the truck and handing them out to fellow migrant farmers who are afraid to go to work.
The produce is beautiful: bright red tomatoes, radish, kale, celery, grapes, melons.
“The whole community is coming here now,” says Irene, who has been working on nearby farms for 18 years.
The queue for food grows longer as the evening wears on.
“People are coming in later — they feel safer at night.”
She, too, feels safer at night.
There is talk about two women, both farm workers, who were picked up in recent days by ICE.
Their children were being cared for by their fathers.
“There are some people I know who were taken,” says Carmen, another volunteer.
“I’m scared.”
Irene, Carmen and other volunteers started handing out food to their colleagues during the pandemic. They continued to report for work in the fields even at the peak of Covid-19, long after most California businesses were ordered to close.
But there is a big difference between then and now, Irene says.
“We were called essential workers during the pandemic,” she adds.
“Now they are treating us as if we were criminals.”
0 comments:
Publicar un comentario