Topline:
As ICE activity continues throughout Los Angeles, the economic effects are already being felt, particularly in downtown.
Why it matters: Here's what Chris Thornberg, founding partner at Beacon Economics, said about the immediate and long-term effects of ICE sweeps and protests in L.A.
DTLA: Thornberg said that the recent ICE activity and subsequent protests are hurting the downtown area more than the rest of the city, particularly as the L.A. economy still tries to reach pre-pandemic levels.
Threats to tourism: He said recent national news on L.A.'s wildfires and now protests are likely causing people to view the city as an undesirable tourist destination, despite these incidents only affecting small portions of the city.
The labor force: Thornberg said limited immigration could cause a chilling effect as we see fewer foreign-born workers — a vital part of the workforce — and the U.S. labor markets tighten, slowing down the economy.
As ICE sweeps continue across Los Angeles and protesters take to the streets for the second week in a row, many businesses and industries have lost customers and employees.
Chris Thornberg, founding partner at Beacon Economics, spoke with Austin Cross on LAist's AirTalk program to talk about what that could mean economically for a city that's already facing a significant budget shortfall.
Listen to the conversation
ICE enforcement actions have rattled SoCal. What are the economic implications?
The moves have led to many undocumented immigrants in the country to fear doing routine daily tasks like going to pick their kids up from school and going to work. We talk to Sarah McGregor, managing editor of the national team at Bloomberg, and Chris Thornberg, the founding partner at Beacon Economics.
Here are the three takeaways:
A still recovering downtown
Probably the most affected area in Los Angeles is downtown, where the bulk of the protests have occurred and a curfew has been enforced.
Thornberg explained that downtown is also still reeling from the effects of the pandemic and that recent ICE activity has only compounded long-standing issues.
“ Prior to the pandemic, we saw a lot of new life,” he said. “It was really a renaissance going on down there, but post pandemic, with the enormous increase in the number of homeless, it really took the air out of downtown's revival.”
Thornberg said beyond downtown, the rest of L.A. is on “normal footing,” at least in terms of immediate impact.
Threats to tourism
With the fires earlier this year and now protests that led President Donald Trump to call in the National Guard, Thornberg said “the rest of the country seems to think that all of L.A. is on fire and or under siege.”
He said this perception of L.A. being unsafe will have an effect on the city's desirability as a tourist destination, despite the reality that only small portions of the city are currently affected.
The nation’s labor force
Although immediate effects to L.A.'s economy are small and could be limited to downtown, Thornberg said continual ICE sweeps and limits on immigration will have long-term effects on the national labor force.
According to 2024 data from the Bureau of Labor Statistics, nearly 20% of the U.S. labor force is foreign born. Thornberg said a significant portion of those workers are undocumented. He said if the government really tries to stop people from immigrating, the U.S. labor market will quickly tighten and slow the economy.
“ If you go back to the first Trump administration, it wasn't so much that they threw a lot of people out of the country. It was rather that the chill over the economy prevented people from coming in here,” he said. “And really, by 2019 you saw the U.S. labor market just absolutely stall.”
ICE sustainability
But this labor chill may take some time to materialize as Thornberg said he's skeptical that ICE has the staffing and facilities to support the mass deportations needed to cause long-term economic turmoil.
