Immigration Crackdowns Could Cripple America's Small Businesses | Opinion

This article was originally featured in Newsweek - By Javier Palomarez

Immigration has always powered America's economy. From building sites to farm fields, from hotels to restaurants, immigrants fortify our foundational industries. However, recent crackdowns are weakening the industries we all depend on for growth and stability.

Let's be clear: 70 percent of ICE detainees are non-criminals. These are people with jobs, tax obligations, and families. These workers fill critical roles in construction, agriculture, manufacturing, technology, and hospitality: sectors historically strained by labor shortages. When enforcement rips through their communities, small businesses, with their limited margins and flexibility, are first to feel the pain.

Agriculture is the perfect sector to illustrate this issue. Roughly 68 percent of hired farmworkers in the U.S. are immigrants, and 23 percent are undocumented. When immigration sweeps pull those workers out of the fields, produce goes unharvested, prices rise at the grocery store, and families across America feel it in their wallets. A study in California showed that immigration enforcement has caused a 20 to 40 percent drop in the agricultural workforce, billions in crop losses, and an increase in produce prices of between 5 and 12 percent. Those higher food costs ripple outward into other industries that rely on agricultural products. Other sectors like construction are already seeing higher costs for lumber and materials. When labor shortages drive up the cost of critical building components, it becomes harder to build homes, schools, and infrastructure at a price working families can afford.

America's future also depends on STEM talent. Nearly one in five STEM workers nationwide are foreign-born, as are 43 percent of doctoral-level scientists and engineers in the United States. Many go on to start companies, conduct groundbreaking research, and strengthen our most advanced industries. A recent report found that due to funding cuts, visa suspensions, and perceived threats to academic freedom, a rising number of international U.S.-based scholars and early-career researchers feel pushed to relocate abroad. As long as immigration policies foster a climate of fear and instability, they will push top minds to take their talents elsewhere and erode America's competitive advantage.

The fallout extends beyond the workforce and into our communities. Immigration enforcement has caused significant drops in visits to retail and entertainment venues in Hispanic neighborhoods. In Los Angeles, businesses that rely on immigrant customers have reported major declines in sales, and in other parts of the country, community festivals have been canceled due to fear of raids. That fear grinds community life to a halt, resulting in less foot traffic, lower sales, and more empty storefronts. Make no mistake: it is important to emphasize that this fallout is ethnicity-agnostic. When economic activity dries up, it affects all businesses, not only those owned by immigrants.

These disruptions also come with long-term consequences. Small businesses employ nearly half of all private-sector workers—about 62 million Americans—and have generated about 66 percent of new jobs over the past 25 years. When their operations are forced to slow or close, communities lose jobs, services, and local economic resilience.

So, what is the path forward?

First, small business owners must stay informed. Know the laws, help employees stay document-ready, and avoid interfering with federal actions. No business plan is worth that risk. Preparedness and knowledge are the first lines of defense.

Second, be transparent with customers. If rising wages or automation force price adjustments, honesty goes a long way. Communities often respond with empathy when businesses are upfront about their struggles.

Third, policymakers must act. At the United States Hispanic Business Council, we are pushing proposals like the Temporary Residence for Undocumented Migrant People (TRUMP) Visa to create legal pathways for the talent our economy depends on. Business owners must advocate for sensible reforms and make lawmakers understand that immigrant workers are essential to economic health.

Immigration crackdowns might sound like political talking points, but to small businesses they are an existential threat. The impact is immediate and disproportionate, and centered on Main Street, not Wall Street.

America's strength has always been its diversity and its desire to collaborate. As long as our country's immigration policy remains fear-driven, we risk dismantling industries that built this nation and lead the world. Failing to safeguard tax-paying immigrant workers means abandoning not only small businesses, but the very backbone of the American economy. Can the United States afford to do that?

Javier Palomarez is the President and CEO of the United States Hispanic Business Council.

The views expressed in this article are the writer's own.