How ICE arrests are creating 'economies of fear'

0:01Sierra Juarez:NPR.

0:06Sierra Juarez:Take a stroll through San Antonio's east side with James Norte, and what you'll find is a community with a lot of mom-and-pop businesses. You will see everything from bike shops, antiques, to taquerias and lavendarios. But you'll also see just innovation happening, whether it be a small tech startup next to a bookstore. James heads up an economic development organization called San Antonio for Growth on the east side. If you're looking for a community of opportunity where you can live and work and play and pray, San Antonio, Texas is your town. Have you given that spiel before? I've probably given a version of that spiel.

0:41Sierra Juarez:See, you've caught me in my element, right? So now I'm just like going off of vibes. You know what? It's working. Now I want to go antiquing while eating a taco and go to a bookstore in San Antonio. So do I. Let's make it happen. Yeah. Despite James' enthusiasm, he says one thing has cast a shadow over this mostly Latino community over the last year or so, and that is the growing presence of immigration and customs enforcement. For example, I have a friend who mows lawns, and so he is a U.S. citizen. He does not speak Spanish, but he is Latino. And so he is actively afraid that because of how he looks, he might one day be mowing a lawn and could be picked up by ice.

1:23This is The Indicator from Planet Money. I'm Waylon Wong.

1:26Sierra Juarez:And I'm Adrian Ma. Stories like this are not just happening in San Antonio, of course. While ICE may not be making headlines like it was earlier this year, it has been quietly ramping up arrests. An analysis by UC Berkeley and UCLA's Deportation Data Project finds that ICE arrested nearly 50 ,000 people in July, making it the biggest month for ICE arrests since President Trump took office again. The White House says his deportation strategy will help the economy, but new research suggests it's doing the opposite. Today on the show, how Trump's aggressive enforcement is creating what one academic researcher calls an economy of fear and not just for immigrants.

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3:13Sierra Juarez:Before Trump 2.0, ICE used to operate in a much more limited way. If there was someone, a business that was suspected of hiring undocumented workers, they would go raid that business, but it was kind of a one-off event. This is Zeke Hernandez, a business professor at the University of Pennsylvania. He's been studying how this new brand of ICE enforcement is affecting local businesses. Now what's different is that ICE is a permanent roving presence in a community. ICE goes and stays and stays for weeks, months. That's happened in big cities like L.A., Chicago and Charlotte, as well as small and mid-sized ones like Minneapolis, Nashville and New Orleans.

3:51Sierra Juarez:And as a business professor, Zeke started wondering what was happening to commerce in places that saw this ramped up enforcement. And I thought, let me get the data. He started by scraping millions of news articles from early 2024 four to early 2026. That allowed him to identify where ICRS had taken place, down to the level of an address. Then he got two more data sets, one for consumer credit and debit card purchases, and another showing foot traffic data collected from cell phones. And these data sets allowed him to see how much consumers were spending and which businesses they were visiting.

4:26Sierra Juarez:What's remarkable about these data is I can track five million businesses every day. And it's very granular. You know, Molly's Coffee Shop in your neighborhood, the Starbucks in your neighborhood, the Walmart or Target, the car dealership, the construction sites. When Zeke put these data sources together, ICE activity, consumer spending, and foot traffic, what emerged was a clear pattern. When ICE shows up, businesses experience a significant decline in foot traffic and a significant decline in spending. Specifically, a 3 % decline in foot traffic to workplaces and retailers and a 7 % decline in consumer spending between 2024 and Trump's first year in office.

5:08Sierra Juarez:Now, a 7 % decline in spending might not sound like a lot at first blush, but think about it this way. If consumer spending all over the U.S. dropped by 7 % over the course of a year, we might start throwing around the word recession. And how many businesses could survive that kind of haircut? Exactly. Zeke also says these effects weren't just limited to people who might feel the most targeted by ICE. The people who stopped showing up to work or to shop or who spent less are not just immigrants and Hispanics. It's non-immigrants and non-Hispanics, it's everybody. It's an economy driven by fear.

5:45And Zeke found that a fear-driven economy can linger for a long time.

5:49Sierra Juarez:I expected that these effects would eventually go away after a few weeks, right? ICE targets a location, leaves, you know, and businesses go back to normal. That's not the case. the effects do not go away. That is, businesses experience a permanent drop in foot traffic and spending. They just, they went down and they kind of stayed down. They went down and they stayed down. Yeah. In fact, foot traffic kept going down even more over time. Now, we should say Zeke's study only looked at the period up to February 2026. He says more research needs to be done on what's happened since then. Still, he worries that we've only begun to see the longer term effects on local economies.

6:27Sierra Juarez:An economy of fear causes people to either move out or not want to move in. So all of a sudden, the inflow of talent and workers and spenders and taxpayers to a location is going to go down. And we have reported on this. The Trump administration's larger campaign to reduce legal and illegal immigration has hit workers in industries like health care, agriculture, and construction. And recently, we spoke to a business owner in Miami who's originally from Haiti. And she said folks in her community are scared to go out because they're worried about ICE. For his part, Zeke's research leads him to question the wisdom of Trump's immigration enforcement strategy.

7:03Sierra Juarez:If you believe that what ICE is doing is good for whatever reason, you believe that, you might accept the short-term economic cost. You might say, OK, fine, I will accept a blip in economic activity for a few weeks. But, you know, in the long run, I believe this is going to be better for that community. But I don't think anyone would accept a permanent hit to the economy. We reached out to the White House for comment on Zeke's findings. And in a statement, spokesperson Lauren Biss said, quote, removing these criminals from the streets makes communities safer for business owners and customers. She also said, quote, there is no shortage of American minds and hands to grow our labor force.

7:44Back in San Antonio, the federal government is planning to open an ICE processing and detention facility on the city's east side. That worries James Norte, our economic development guy and San Antonio's cheerleader from earlier.

7:56Sierra Juarez:No one wants to have a business or live near an ice facility. It's a deterrent. Particularly on the east side, he says, an area that's historically seen decades of disinvestment. And unfortunately, this is a trend in the United States of placing these otherwise undesirable facilities in communities that historically have had less economic power, less means, and usually a little bit more racially diverse. If the new ICE facility is allowed to open, he thinks it'll have disastrous effects for the local economy and could undo all the progress they've made. This episode was produced by Corey Bridges with engineering by Robert Rodriguez.

8:35Sierra Juarez:It was fact-checked by Sierra Juarez. Julia Ritchie edited this episode. Cake and Cannon is our editor. And the indicators are production of NPR.

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