Economists Warn Deporting Hundreds of Thousands of Venezuelans Could Devastate U.S. Economy

The Supreme Court allowed the Trump administration to cancel Temporary Protected Status designation for over 300,000 Venezuelans across the country, making them eligible for deportations. Just days after the decision was reached, experts are warning that the massive ousting of migrants could seriously destabilize the U.S. economy.

The court’s order directly affects some 350,000 Venezuelans who were granted protections in 2023 during the Biden administration due to the political, economic and humanitarian crises ravaging their home country. The former president then extended these protections in January, allowing them to retain their legal status until October 2026.

But now, as the Trump administration seeks to carry out the largest deportation operation in “American history,” Venezuelans who have been in the U.S. for less than two years have become a prime target to the White House, which argues granting the group protected status was not in the national interest, as migrants, they say, present a public security risk and drain on resources.

Now, as the administration cleared a major hurdle for its mass deportation strategy, economists warn that it could have ripple effects on the economy, spurring labor shortages, job losses, business closures and more, a new Washington Post analysis says.

“It’s going to have a big impact,” said Chloe East, an economist at the University of Colorado at Denver who co-authored a 2022 study on the impact of Obama-era deportations. “I anticipate we’ll see employers [in sectors that employ Venezuelans with temporary protected status] have a much harder time finding workers, if they can find workers at all.”

Research on the impact of past deportation efforts shows that immigration enforcement actions worsen labor shortages and lead to fewer jobs for U.S.-born workers in the regions where they happen. However, there is little evidence on the deportation of TPS status holders, specifically.

“You can see at a construction site all immigrants doing the framing and concrete pouring, and you can see the electrician and project managers who are U.S. born. Those jobs rely on each other,” said Michael Clemens, an economics professor at George Mason University, citing research on the construction industry. “If the framer is gone, the native-born electrician will not have a job either.”

The Trump administration, however, disagrees with these assessments, touting that mass deportations will create higher-wage jobs for native-born Americans and relieve the housing affordability crisis, a rhetoric they have shared since the campaign trail.

For now, it remains unclear how many Venezuelans will actually be deported, given that some of them have added protections, such as marriage or a pending asylum application. At the same time, it is still unknown how long it will take the administration to strip the group from their status and oust them, given that the court did not provide a specific timeline for their directive.

“It could be right now or it could be a week from now, or it could be some other time that’s unclear,” Ahilan Arulanantham, one of the lawyers representing Venezuelan plaintiffs said during a news conference Monday held after SCOTUS’ decision.

“It’s in the hands of the government to clarify what the order means and how they interpret it,” he continued, adding that the legal team could challenge that interpretation in the ongoing court case.