Contributor: ICE raids and immigrant pay cuts hurt California's economy

Along the southern coast of California's central coast, President Trump's war on immigration has left a visceral mark. It seems that these days almost everyone there has seen or heard the aftermath of immigration raids: cars with broken windows left idle and businesses empty of regular workers and patrons. People's lives are clear. Attacks on Christmas have been removed at least 100 people in our communities, we are leaving children without parents and families without primary income earners – creating problems that go far beyond enforcement.

The economic consequences of immigration and Customs Enforcement raids are equally dire. The latest farmer surveys they have shown that immigration raids and fear are creating a shortage of farm workers, especially in labor-intensive crops such as strawberries – the most important agricultural commodity in the region – where the fruit rots on the plant without the immigrant workers who cultivate it.

A preliminary study measuring the economic impact of ICE raids in Oxnard estimates direct crop losses of $3 billion to $7 billion with significant spillovers to other sectors of the economy. As families lose money through raids – either through the direct loss of a working family member or through loss of business productivity or sales – they spend less money on the local economy. The ripple effect means that the overall economic impact of ICE raids is far greater than non-targeted crops, with harm concentrated on the most vulnerable: farm workers.

Recent changes to the foreign worker system threaten to deepen the wound. The federal program, known as H-2A, allows farmers and farm contractors to hire temporary foreign workers to meet seasonal labor needs. It has become the fastest growing work visa program in US agriculture. It is accompanied by a well–documented history of wage theft, abuse and human trafficking enabled, in part, by the classification of H-2A workers and their inability to seek alternative employment while in the United States.

Until October 2025, wages paid to H-2A workers, while low, were not so low that they would disrupt the labor market and reduce wages paid to farm workers. In October, the Trump administration took a huge pay cut for H-2A workers and, in doing so, lowered wages for farmworkers across America regardless of visa status. Trump's reforms include both direct wage cuts and new provisions that allow employers to charge housing allowances of up to $3 per hour worked.

Estimates of what farm workers will lose as a result of these changes range from $4.4 billion to $5.4 billion, or 10% to 12% of the annual wages of farm workers. Given these figures, the loss suffered by farm workers in Santa Barbara County alone – where I conducted the research – could range from $126 million to $152 million per year, with the subsequent decrease in costs and tax revenue going back to the county.

Since H-2A workers are now cheaper than farm workers, visa holders are likely to fill at least one-fifth of all agricultural jobs in Santa Barbara County. This surpasses the state's 2023 program peak, when 18.1% of all agricultural jobs were filled by H-2A, before wage increases caused many farmers to exit the program in 2024 and 2025. Including the housing deduction, employers can now pay H-2A workers $13.90 an hour, less than California's minimum wage of $6 an hour. resulting in local farm workers losing their jobs and income. Additionally, due to reduced income and employment, many farmworker families will be forced to rely on welfare programs such as CalFresh, increasing government costs.

The tax and budget implications of expanded H-2A use should be a major concern for local and state governments. Not only have Trump's reforms significantly reduced the taxable income of farmworkers, but H-2A workers themselves generate less local tax revenue and economic activity than permanent workers.

H-2A employers and workers are exempt from important payroll taxes, including Social Security, Medicare and unemployment insurance. At the same time, the short-term nature of the program – which averages about six months – means that workers take a large portion of their earnings abroad to support families they cannot bring with them, further limiting domestic spending and the sales tax base.

Elected officials are powerless in the face of these changes. A range of policy measures can help stabilize the labor market under increasing pressure, particularly those that strengthen the reasonable wage base and reduce further downward pressure on earnings. These could include raising the minimum wage for agriculture, increasing the regulatory powers of the California Department of Employment Development, and strengthening legal protections for undocumented farm workers who are organizing for better working conditions.

The United Farm Workers are currently challenging Trump's pay and housing cuts in court, saying they include one of the largest transfers of wealth from workers to employers in the history of American agriculture. Meanwhile, Assembly member Maggie Krell (D-Sacramento) has introduced legislation to raise the minimum hourly wage for certain agricultural workers to $19.75 – effectively restoring the previous H-2A level. But that amendment, while important, wouldn't go into effect until 2027 and still needs to be passed. In the meantime, state and local governments must take decisive action to enforce the prevailing wage rate, ensuring that employers cannot use the expanded housing deduction to push workers' wages below the statutory minimum.

These are not drastic measures; they are basic defenses. The exception is the acceptance of a race to the bottom – in wages, in working conditions and in the economic stability of the region itself.

Matt Kinsella-Walsh is a graduate researcher at UC Santa Barbara Community Labor Center and Information Planning Project. He researches agricultural and labor economics in the North American strawberry industry.