The first month of Trump’s immigration crackdown in Los Angeles put a dent in the area’s economy, costing business owners millions in lost revenue and exponentially more in lost output from workers, according to a new county report.
The survey found that 82% of businesses reported negative impacts from the raids that began early last June and 44% reported losses of greater than half their normal revenue. More than two-thirds of respondents said they had changed operations, such as by reducing hours and delaying expansion plans. Some said they had to close temporarily or had difficulty obtaining supplies and services from usual vendors.
The report was prepared jointly with the L.A. County Department of Economic Opportunity; researchers from a nonprofit group called the Los Angeles County Economic Development Corporation conducted an online survey of hundreds of local businesses.
The survey is the latest evidence that the raids upended parts of the Los Angeles economy as some residents here illegally went underground and employers lost workers amid the arrests. It’s clear the immigration action hit some areas and sectors of the economy harder than others. Some communities were largely unaffected. But in immigrant communities such as downtown L.A., Boyle Heights and Santa Ana, merchants have reported impacts.
The report said some sectors, such as restaurants, construction and retail, would be particularly hard hit. But the authors said both employers and employees found innovative ways to keep going.
“How these businesses are adapting, it’s really a testament to their resilience,” said Justin L. Adams, a senior economist with the Los Angeles County Economic Development Corporation.
According to the report, released this week, undocumented workers contribute an estimated $253.9 billion in total economic output, equivalent to 17% of L.A. County’s gross domestic product. These undocumented workers support over 1.06 million jobs and generate $80.4 billion in labor income across a range of industries, including construction, manufacturing, retail, and services, the report said.
But when masked agents with the Department of Homeland Security started roaming the Southland in June, targeting immigrants for deportation and arresting the activists and American citizens who followed them on their missions, businesses suffered as workers in the county’s underground economy went into hiding.
In the first week of June alone, when the raids began in earnest and the National Guard was deployed into the city with active-duty Marines, researchers estimated that the nightly curfew downtown resulted in an estimated $840 million in economic output losses, according to the report.
An analysis of L.A. Metro data, according to the report, showed that bus ridership on high-vulnerability transit lines around that time declined about 17,000 monthly riders compared with baseline levels.
“The out-of-control ICE raids are doing senseless and catastrophic harm to our country, and we are seeing the toll,” L.A. County Supervisor Supervisor Janice Hahn, who lobbied to commission the report alongside Supervisor Hilda L. Solis, said in a written statement.
Adams, one of the authors of the report, said researchers partnered with the USC Equity Research Institute to create an updated, current estimate of undocumented workers in L.A. County, finding it to be about 948,700.
With the county’s overall population at roughly 10 million, undocumented residents represent nearly 1 in 10 people, Adams noted.
“It’s pretty sizable,” Adams said. “They are going to have a large economic impact on the county.”
That businesses in the area have been hurt by raid-related disruptions is not necessarily surprising, Adams said, but the report “reinforced and helped quantify that.” He continued, “it’s not straightforward to do, because this is essentially trying to measure a big portion of the shadow economy.”
About 311 people responded to the survey, but not everyone fully identified themselves, their business or its location, possibly out of concern for future immigration raids, Adams said.
Across some 178 interviews, business owners described seeing significant changes among consumers, including reduced spending and customers avoiding certain areas of the county altogether. Employees expressed fear about coming to work, productivity fell due to worker anxiety and businesses faced difficulty finding replacement workers, the report said.
Owners described additional costs such as banking expenses for loans to cover lost revenue, more advertising and marketing to attract more business, boosted wages to attract replacement workers, and legal expenses to support detained workers. One business owner said she picked up a side job in order to keep her workers employed, while others had added expenses such as lunch deliveries or gas cards to help employees avoid open areas and public transportation.
For small-business owners, even small fluctuations in revenue can have ripple effects, affecting their ability to pay rent and vendors.
Ben Johnston, chief operating officer of Kapitus, a firm offering financing to small businesses, wrote in a memo describing expected trends in 2026 that he expects costs to continue to rise for the restaurant industry in particular, which already struggles with thin profit margins and relies heavily on immigrant labor.
“The crackdown on undocumented immigration weighs on the industry, further reducing margins for restaurants who are trying to keep menu prices as affordable as possible,” Johnston said.
The L.A. County report echoes findings by UC Merced researchers based on U.S. census survey data that found that the week after the raids began in June, the number of people reporting private sector employment in California decreased by 3.1% — an employment downtown only matched in modern history by the COVID-19 lockdowns.
Statewide, undocumented workers generate nearly 5% of California’s gross domestic product through their wages earned and the goods and services they help produce alone, according to a report last year from the Bay Area Council Economic Institute. That rises to 9% when additional business activity and other benefits of their labor are added.
With 2.28 million undocumented immigrants living in California, they represent 8% of workers in the state, with nearly two-thirds having lived in the state for over a decade. Their total contribution in local, state and federal taxes is $23 billion annually, according to the Bay Area Council Economic Institute.
In L.A. County, officials have sought to stem the bleeding from the immigration sweeps by launching a fund to deliver financial relief to small businesses. As of December, some 367 businesses have been awarded more than $1.53 million in grants. The county has also expanded potential paid hours for youth who have become primary earners for their families due to immigration enforcement and sought to connect these youth to employment opportunities.
