Why Dismantling Sanctuary Cities Hurts the U.S. Economy

June 24, 2025

Shaquille Morgan

As U.S. Immigration and Customs Enforcement (ICE) raids unfold across Southern California and other parts of the U.S., a more forceful—and arguably authoritarian—approach to immigration is taking shape. Much of this effort has been aimed at dismantling sanctuary cities: municipalities that limit cooperation with federal immigration enforcement and offer a range of accommodations to undocumented migrants.

Although the Trump administration said they would initially target undocumented migrants with criminal records, recent raids have taken a broader approach. This sweeping crackdown has sparked protests and, in some cases, civil unrest. In response, President Trump deployed the National Guard without the California governor’s consent, a move that has arguably escalated tensions. At the heart of the conflict lies a deep division over the role and legitimacy of sanctuary cities—and whether protecting undocumented migrants comes at the expense of born and naturalized citizens.

Sanctuary city policies are not without flaws. But absent a compassionate, practical approach that recognizes the value of undocumented migrants—particularly those who are law-abiding and contribute meaningfully to the economy—entire industries that fuel the U.S. economy risk collapsing under the weight of short-sighted enforcement.

What are Sanctuary Cities?

Sanctuary cities typically adopt policies that prevent local agencies from: using city resources or funds to support federal immigration enforcement; assisting in foreign government investigations; and inquiring about an individual’s immigration status unless required by law.

These practices began in San Francisco with the 1985 “City of Refuge” resolution and the 1989 “City of Refuge” ordinance. These non-cooperation strategies are often referred to as “Don’t Ask, Don’t Tell” (DADT) policies.

In practice, these policies allow undocumented migrants to participate in local economies and public life without the constant threat of deportation. While the federal government may view this as obstruction, many cities see it as a necessary response to a broken immigration system.

Contextualizing the Economic Impact of Working Class Undocumented Migrants in Sanctuary Cities

Trump’s antagonism toward sanctuary cities is not new. During his first term, he threatened to withhold federal funding from cities that refused to cooperate with ICE. In 2017, he launched a nationwide crackdown and even suggested that city officials overseeing sanctuary cities be arrested. These statements were part of a broader narrative that painted undocumented migrants as dangerous criminals, rather than acknowledging the diversity of circumstances that lead people to live in the U.S. without legal status.

There are indeed difficult cases. In the 2008 Bologna lawsuit, Anthony Bologna and his three sons were ambushed and shot while sitting in traffic in San Francisco. The accused shooter was allegedly an undocumented migrant with prior run-ins with the law. The family sued the city, arguing that its sanctuary policies allowed the shooter to remain in the country unlawfully, which ultimately led to the killings. These types of cases expose legitimate concerns about gaps in enforcement. Any liberal democracy must prioritize the safety and well-being of its citizens—especially when it comes to serious violent offenders.

But these tragic outliers should not justify treating all undocumented migrants as threats. Most are law-abiding individuals who have lived and worked in the U.S. for years. A study analyzing Texas data from 2012 to 2018 found that U.S.-born citizens were twice as likely to be arrested for violent felonies and drug offenses, and four times as likely for property crimes, compared to undocumented migrants. Similar findings from the Cato Institute show that undocumented immigrants were about 37 per cent less likely to be convicted of a crime.

Their contributions to the economy are also significant. Undocumented migrants make up roughly up 50 per cent of U.S. farm labour—in field picking, processing, and livestock care—and over 20 per cent of construction workers, according to the U.S. Department of Labor and other research. They fill roles many citizens are unwilling to take, and they are often exploited in the process. Should the Trump administration treat all undocumented individuals as criminals, the consequences would likely include a reduction in GDP and rising costs, as industries are forced to recruit from a smaller, costlier labour pool. More recent modeling by the Peterson Institute paints a starker picture: deporting 1.3 million people might reduce GDP by 1.2 per cent, while removing 8.3 million could slash GDP by 7.4 per cent by 2028 .

The reality is that undocumented status has allowed employers and industries to quietly benefit from a vulnerable workforce. A mass deportation strategy ignores this dynamic and risks causing major economic disruption. A balanced approach must acknowledge that deportation will play a role in any immigration strategy—but it must also include a viable, compassionate path to citizenship for long-standing residents who contribute meaningfully to American society.

Upholding immigration laws is necessary. But laws alone cannot address the full complexity of undocumented migration. Without policy that recognizes the people behind the statistics—and their role in keeping industries running—the U.S. risks destabilizing its economy and tearing apart communities that have long called the country home.

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