A recent chart from Goldman Sachs has sparked significant attention, detailing which industries and workers would be most affected if mass deportations were to occur in the U.S.
The bank’s analysis draws on the research of economist George Borjas, who divides the foreign-born population into authorized and unauthorized groups. These figures are then applied to the latest data from the American Community Survey (2023).
The list of industries impacted by mass deportations is not unexpected. Many would agree that undocumented workers play a crucial role in sectors like landscaping, agriculture, meatpacking, and construction.
However, what stands out is the attempt by Goldman Sachs economist Elsie Peng to quantify the impact. Peng estimates that unauthorized workers earn, on average, 20% less in hourly wages compared to native-born and authorized immigrant workers in the same industry. The wage gap is even more pronounced in construction and low-skill service sectors.
While these numbers suggest a significant wage difference, it’s important to note that other factors may contribute to the gap. Unauthorized workers may have different work experiences or job conditions, even within the same sector. Nonetheless, the pay differential is likely substantial, meaning employers who lose a significant portion of their unauthorized workforce could face higher wage costs.
This potential outcome raises significant concerns, especially for industries that rely heavily on undocumented labor.
An interesting aspect of the report is how it categorizes certain jobs. For instance, the term “low-skill professional service” includes roles like landscaping and cleaning, which the Census Bureau has now reclassified as “Administrative and Support and Waste Management and Remediation Services.” While the new title may be more accurate, it’s still somewhat confusing, especially given the ongoing media attention on jobs like gardening and cleaning, which are often labeled as “low-skill.”
The report also raises questions about the category “private households,” which is the second-largest employer of undocumented workers. The Census Bureau’s classification is vague: it includes private homes that hire workers for household tasks like cooking, cleaning, and childcare. This category covers a wide range of jobs, from nannies and personal care aides to butlers and gardeners.
This broad classification could mislead people about the wealth of those employing informal workers. For instance, it could lump together high-income families who employ a butler with middle-income households that hire a caregiver for an elderly relative. Many of these non-medical caregiving roles are typically filled by women in the community.
In fact, much of the “low-skill professional” or “private household” work centers around caregiving. This sector could also be severely affected by a crackdown on immigration. Despite its importance—especially in light of the COVID-19 pandemic—caregiving work has not received as much attention as industries like farming and meatpacking.
While the reasons for this imbalance are unclear, it’s likely that caregiving roles will face significant challenges if immigration policies become stricter.
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