| DAILY NEWS FOR YOU / LOCAL ECONOMY | |
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ICE Raids in Chicago Drained $1.26 Billion From the Local Economy in 2025. A New Study Proves the Math. |
| When federal agents flooded Chicago neighborhoods beginning in January 2025, immigrants stayed home. They stopped shopping, going to restaurants, and paying sales taxes. A new study published September 8 quantifies what fear costs a city — and the number is bigger than most economists predicted. |
| ECONOMIC IMPACT / MEASURED | COOK COUNTY | | | FOREGONE COMMERCIAL ACTIVITY $1.26B Estimated retail and restaurant activity that did not occur during the first year of heightened immigration enforcement. | | RETAIL | RESTAURANTS | SALES TAX | | |
| A new study published on September 8 documents the steep economic cost of ICE enforcement raids in Chicago that began in earnest in January 2025 — finding that fear kept many immigrants home, draining the Chicago metropolitan area of more than $1.26 billion in lost retail and restaurant activity across the first year. NPR reported on the study's findings on September 8, describing the economic spillover from immigration enforcement concentration in a major American city. The University of Illinois Chicago study used weekly origin-destination foot-traffic data, including anonymized cellphone mobility data, to track movement between immigrant and non-immigrant neighborhoods across Cook County. Researchers estimated approximately $1.26 billion in foregone retail and restaurant activity and approximately $107 million in foregone local sales-tax revenue. |
| −9% RETAIL VISITS | −10% RESTAURANT VISITS | $107M SALES-TAX IMPACT | |
| The economic mechanism is straightforward even where the political debate around it is not. Immigrants — both documented and undocumented — who fear encounters with federal law enforcement reduce their presence in public commercial spaces. They shop less, eat at restaurants less, use transit less, and avoid the retail corridors and service-sector businesses where they might encounter an enforcement action or a federal officer. That behavioral change, when replicated across the tens of thousands of immigrants in a major city who are either directly at risk or closely connected to people who are, produces a measurable demand shock in the local service economy. Restaurants in immigrant-concentrated neighborhoods reported sharp drops in foot traffic coinciding with the January 2025 surge in ICE activity. Retail stores in those same neighborhoods reported reduced transaction counts. Sales tax collections in affected ZIP codes declined relative to non-affected areas. The $1.26 billion figure aggregates those effects across the full year. |
| HOW THE EFFECT MOVES | | 01 Public mobility falls | → | Cross-community trips to shops and restaurants decline. | | | | 02 Spending follows | → | Retailers and restaurants see less customer activity. | | | | 03 Tax receipts shrink | → | Lower commercial activity translates into lower local sales-tax collections. | |
| | FROM THE RESEARCH “People's behavior systematically changed after January 20, 2025.” MATT WILSON · STUDY CO-AUTHOR | |
| The study's implications extend beyond Chicago. DHS deployed approximately 2,000 additional ICE officers to the Chicago area in early 2025 — a level of enforcement concentration that was deliberately chosen to be visible and deterrent in effect, intended to send a message to immigrants about the changed enforcement environment of the Trump second term. If the same enforcement intensity produced a $1.26 billion economic cost in Chicago, similar deployments in Los Angeles, Houston, New York, and Phoenix — all of which received comparable enforcement surges — would be expected to produce proportional effects, potentially aggregating to tens of billions of dollars in national economic activity reduction across the enforcement campaign's full geographic scope. None of that activity loss reduces the federal deficit; it reduces the tax base of the cities where enforcement is concentrated and the revenues of the small businesses — the restaurants, the grocery stores, the cleaning services, the childcare providers — that serve immigrant communities and whose customer base contracted when ICE activity intensified. |
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| The political economy of the study is sensitive for both parties. Republicans who support aggressive immigration enforcement will argue that the economic costs identified are the appropriate price of the rule of law and that the study's implicit assumption — that the immigrant population's commercial activity would continue at pre-enforcement levels if enforcement were reduced — involves assumptions about the legal status of that population that policy should not take as given. Democrats and immigrant rights advocates will argue that the study quantifies a real economic harm that is being imposed on American cities and American businesses without any explicit legislative authorization for enforcement at the scale deployed, and that the concentration of that harm in the most economically vulnerable communities — the small business owners, the restaurant workers, the service employees — makes it a distributional injustice as well as an economic inefficiency. |
| 03 | STUDY NOTES What the Cook County data measured | |
| 01 | Researchers estimated approximately $1.26 billion in foregone retail and restaurant activity during the first year of heightened immigration enforcement. | |
| 02 | Cross-community retail visits fell roughly 9 percent and restaurant visits roughly 10 percent, with the decline persisting through nearly a year of observation. | |
| 03 | The report estimates approximately $107 million in foregone local sales-tax revenue and found no evidence that the missing commercial activity was offset by increased visits elsewhere. | |
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| SOURCES New Report Shows the Economic Toll of ICE Raids — NPR
Hunkering Down: The Hidden Economic Cost of Federal Immigration Enforcement in Cook County, IL — University of Illinois Chicago, Great Cities Institute
Immigration Enforcement Has Led to $1.26 Billion Going Unspent in Cook County, Report Says — CBS Chicago |
