Immigration Crackdown Could Boost Wages In NJ, Report Says

NEW JERSEY — The ongoing crackdown on illegal immigration could push wages higher for American-born workers in New Jersey and four other states, a new report said.

Research from the Oxford Economist suggests that California, Florida, New Jersey, New York, and Texas are most likely to see widespread labor disruption, as all five states rely heavily on foreign workers. A potential worker shortage could especially impact the agriculture, construction, and hospitality industries, the Oxford study said.

The report estimates there are 9 million undocumented workers employed in the United States — about 428,000 of whom live in New Jersey, as Patch previously reported. Advocates say that undocumented workers are notoriously underpaid and face wage theft, with many being “segregated” into low-earning jobs, also including in the restaurant, cleaning and child care industries.

And if these employees are detained, or are afraid to come to work for fear of deportation, it could mean companies in New Jersey may have to change their hiring practices and increase the salaries they offer so they can entice native-born workers, the Oxford report said.

"Employers could again be faced with shortages for workers, renewing upward pressure on wages and inflation," said Nancy Vanden Houten, the lead U.S. economist at Oxford Economics.

But Peter Chen of New Jersey Policy Perspective said the study is a narrow view of the larger impact to the state's workforce, and "ignores the contributions that immigrants make to the economy" through their own spending and tax contributions.

“I’m skeptical of any study that claims to show this in any sort of meaningful effect other than in the very short-term, and a really limited subset of the sector’s economy," said Chen, Senior Policy Analyst for NJPP.“The long-term effects of removing people from the workforce and from the country is pretty substantial, thinking about the overall economic contributions that immigrant residents make.”

Vanden Houten also said that the Oxford study assumes there will be a sharp drop in immigration "due to a steep drop in the flow of migrants coming into the country through restrictions on asylum and refugee programs."

"We think deportations will be limited due to the costs involved, but President Trump's executive orders and subsequent announcements suggest the risk is to the upside," she added.

Paul Beck, professor emeritus of political science at the Ohio State University, told Newsweek that less-skilled workers could also be hired to fill potential gaps, "making us fall further behind China and other competitors."

Beck also pointed out that any increased costs for agricultural workers could drive food prices up for everyday Americans. Undocumented immigrants make up about 20 percent of the agricultural industry's workforce, according to a CBS News report.

Chen also said that since jobs in the agricultural and food-processing industries are disproportionately held by undocumented residents, they could be more affected by a worker shortage.

"These are not jobs that people are lining up for, and they're oftentimes dangerous and poorly compensated," he said.

And while there may be some room for wage growth in those sectors, Chen said, the Oxford study "misses the larger point" of how immigrant workers fit into the larger economy.

According to the Institute on Taxation and Economic Policy, undocumented immigrants in New Jersey paid more than $1.32 billion in state and local taxes in 2022. Researchers estimate that this amount could have topped $1.65 billion if each of them had legal status.

“It’s not like they’re just there to earn money, they also spend the money – so they contribute to the local economy in a way that generates jobs," Chen said. "So if you suddenly vanish some fraction of the population, the economy shrinks too.”