Mass deportations threaten U.S. labor supply, credit stability: Fitch

Mass deportations could significantly harm the U.S. labor supply by removing undocumented workers, potentially hurting the operating and financial performance of some corporate, public finance, and global infrastructure issuers, according to a new Fitch Ratings report.

While mass deportations alone are unlikely to trigger widespread negative rating actions, they could worsen credit risks when combined with other factors.

Potential risks include worker shortages, production delays, and higher wage inflation, which may hinder revenue growth, weaken profitability, and reduce return on investment. Labor-intensive sectors that rely on workers with lower educational attainment could face heightened competition for a shrinking labor pool—even if they do not employ unauthorized workers.

Fitch assessed sector-level risks across U.S. corporates, public finance, and global infrastructure, focusing on areas where deportations might hurt credit quality. The most exposed sectors include construction-related industries, such as homebuilders and building products, as well as meat processors. Meanwhile, population loss from deportations and slower immigration due to stricter border policies could reduce revenues for U.S. school districts, particularly in states with large immigrant populations.

According to U.S. Census Bureau data, foreign-born individuals make up about 20% of the U.S. labor force. The Pew Research Center estimates that unauthorized workers account for nearly 5%. A scenario removing 1.3 million workers over two years would cut labor force growth to 0.3% annually—below pre-pandemic levels and lower than Fitch’s current 0.7% supply-side projection.