‘People Are Afraid of Going Out’—Trump Immigration Moves Hurt Small Businesses

Business owners in Latino neighborhoods say fear of raids has caused a sharp drop in consumer spending

By Ruth Simon and Paul Kiernan

Feb. 10, 2025 9:00 am ET

The Trump administration’s promise of mass deportations and immigration raids is already having chilling effects on spending by immigrants. The effects are wide-ranging, from sluggish tamale sales on a Los Angeles sidewalk to canceled home purchases in the Virginia suburbs.

Joshua Calderon, who sells guitars and giant teddy bears in South Los Angeles, said he recently cut his hours because nobody is walking by his shop. 

“There are no customers,” said Calderon. “It’s been day after day with practically no sales.”

Emilio Sandoval, a nearby street vendor, normally sells out of tamales by midmorning. But at 10:30 a.m. on a recent Thursday, the pot of Mexican corn-flour treats was still half-full.

“People are afraid of going out,” said Sandoval, from his perch under a brightly colored umbrella. “I have cousins who don’t have papers and don’t want to go out because they could be separated from their daughters.” 

Since taking office in January, the Trump administration has issued a spate of directives to expedite the removal of immigrants who are living in the U.S. without authorization. It has also launched a splashy public-relations campaign to draw attention to deportation efforts and raids. The flurry of activity has fanned fears in Latino communities—and a sharp drop in consumer spending, according to business owners.

“Everyone knows somebody who is undocumented,” said Sam Sanchez, a Chicago restaurateur and co-founder of Comite de 100, a recently created organization of Latino business owners focused on immigration. “People are saving money.” Even people who are in the U.S. legally, he added, are afraid of being picked up by accident.

Since President Trump took office, Immigration and Customs Enforcement has arrested an average of 822 migrants a day, according to the partial records that are available. ICE arrested roughly 310 people a day in the 2024 fiscal year.

A sustained pullback in economic activity in Latino communities would have repercussions for local businesses and the broader economy. U.S. Latinos of any race accounted for roughly 13% of consumer spending in 2023, according to Labor Department data.

Latinos have been a driver of new-business formation, starting businesses at more than twice the rate of the U.S. population as a whole, according to Census Bureau data. Immigrants accounted for 36% of launches in 2023, compared with 25% in 2019.

While many Latino entrepreneurs are in the U.S. legally, entrepreneurship is also an attractive option for those who are in the country without authorization because it doesn’t require a work authorization or a Social Security number.

“The community shifted from peace to fear and uncertainty,” said Angie Millan, a small-business owner in Philadelphia who is a U.S. citizen and began carrying her passport after a recent ICE raid at a carwash in her city. 

Millan said that demand for her services, which include notary services and tax preparation, is down 40%. When she went to pick up lunch at a local Colombian restaurant, no one was there.

An estimated 2.5 million U.S. citizens live in a family with someone who is in the country without authorization and is married to a U.S. citizen, according to Fwd.us, an immigration advocacy group.

The fear driving the spending slowdown is evident in dinner-table conversations and requests for mental-health services. 

George Carrillo, chief executive officer of the Hispanic Construction Council, a nonprofit in Washington, D.C., recently sat down with his wife and two children to discuss what they should do if one of them is detained by ICE agents.

“My wife and I are both American citizens. I was born here; she immigrated,” Carrillo said. “I didn’t want to have that conversation. I am a veteran, a former sheriff’s deputy,” he said. “These are difficult conversations to have with our kids.”

At MiSalud Health, an online provider of bilingual healthcare services, two-thirds of consultations are now for mental-health issues, four times higher since just before the election. 

“People are very concerned about their kids being picked up from school, their being picked up,” said MiSalud CEO Bismarck Lepe. “They are here legally, but very concerned about relatives and friends they know.”

At Nuevo Leon Restaurant in Chicago’s Little Village neighborhood, business has fallen by as much as half in recent weeks. While customers are driving in from the suburbs and nearby towns on weekends, many local regulars are staying away, said the owner, Laura Gutierrez, whose father opened Nuevo Leon about 47 years ago. 

Gutierrez now closes the restaurant at 8 p.m. instead of 9:30 p.m. and has cut the hours of her 15 employees. “Fear is like cancer, it spreads,” she said. “People aren’t spending. They aren’t coming out.” She worked more than 80 hours during a recent week to offset reduced staffing.

In Little Village, a predominantly Hispanic enclave, community members have used text chains, social-media groups and calls between local leaders to steer around immigration enforcement. Last week the Justice Department sued Illinois and Chicago over efforts to limit cooperation with federal immigration enforcement.

City Lending, a mortgage lender that works largely with Latino customers, said cancellations of mortgage closings began to rise in the second week of January in response to changing immigration policies. The company in McLean, Va., recently cut its sales projections for 2025 by 15% in response.

Some canceled deals involve customers who have tax-identification numbers but no legal status, said Erick Rivera, a City Lending board member. Others are seeking asylum or have temporary work permits that the Trump administration has threatened to revoke.

“These people are paying their taxes,” Rivera said. “They have their money saved. They are working.”

Georgina Dolores, who operates a Los Angeles fruit stand, was born in Mexico but has lived in the U.S. for 19 years. She said she pays taxes but believes she has no way to normalize her immigration status. Two of her three children are U.S. citizens. 

Dolores estimated that sales have fallen by 70% since Trump’s inauguration because there are fewer people on the street. Her husband, a construction worker who is also in the country without authorization, has switched to night shifts, thinking that doing so will lower his risk of being caught in a raid. The couple now avoid going out together.

“We don’t want the kids to be left totally on their own,” Dolores said. “Every time I leave the house, I don’t know if I’ll return.”

This article was originally published by The Wall Street Journal.