Summary
Representative Alexandria Ocasio-Cortez warned that Trump’s mass deportation policy could lead to labor shortages and higher grocery prices.
Experts say agriculture, construction, and healthcare will be hardest hit, with farm output losses estimated between $30 and $60 billion.
Deportations could cost the U.S. economy up to $88 billion annually.
AOC argued that immigrant labor is vital to economic stability, urging Congress to pursue immigration reform.
Reminder, losing a large purchasing segment decreases demand, which lowers prices until the market adjusts. I.e., it frees up agricultural output that they have to sell, which they’ll lower prices to make sell to other buyers (domestically or internationally).
So the issue is, that those are two different categories. USAID tends to be food stuff that the US massively over produces, dairy, corn, soy, ect. These are all categories that are highly automated and don’t require much labor (relative to other categories)
The places where the most migrant labor is utilized are things like fruits, vegetables, and meat processing. stuff that can’t be mechanized to the same degree as corn or milk. Stuff that doesn’t tend to get exported as part of USAID because it is in demand in the US.
The distributors will lower prices. Farmers will get paid pennies for what would be dollars. Farmers don’t sell their product directly. They get screwed before the consumer gets screwed. In this kind of a cycle prices drop in the short term, but as farmers can’t afford to plant as much going forward, there’s a supply crunch next season. The government used to do a lot to manage this cycle and smooth it out, by literally buying product.
No big deal in the long term though right? Well except we don’t have a competitive distributor or grocery market anymore. So when that crunch hits those prices are going up and they’re going to stay up. For reference check the recent greedflation that happened.
Worse there is a real risk of a dust bowl effect. Farmers who are strapped for cash don’t want to spend money setting their fields up to fallow properly. So the summer hits and the crops that are planted get buried in all that dust. Making the supply crunch even worse.
Then in a normal situation we’d still have the global supply chain to fall back on. But there’s a very good chance that food is going to have tariffs on it.
Farming isn’t like making a widget in a factory.