The recent wave of ICE raids has hit Los Angeles surprisingly hard. Many workers who have been arrested following the raids have uplifted the city’s economy. Many more who haven’t been scared are staying home.
This impact is noticeable: according to the Los Angeles Times, foot traffic in the Fashion District has decreased significantly, leading to a financial hit to shops not directly targeted by ICE agents.
Thousands Have Vanished
Thousands of people who helped build up important industries have completely vanished. Those who worked as landscapers, framers, and even retail staff have disappeared, sometimes leaving tasks and jobs in the middle of completion.
It’s not just illegal immigrants who are worried; entire communities are shaken. “Papers or not, fear spreads quickly,” says Joshua Baum, a real estate consultant.
The Retail And Restaurant Industry
Areas with a high density of immigrants are especially reeling from substantial losses. Business owners are reporting fewer customers coming to their doors and staff not showing up for work.
Just one week after the raids, many businesses have reported sales being cut in half. Just rumors of another ICE raid in a community are enough to reinforce fear and lead to economic blows.
The Construction Industry
Recent wildfires have already taken a toll on the construction industry as many make an effort to rebuild and repair damages. The effects of ICE raids could only served to exacerbate this issue, as residential permitting in Los Angeles decreases substantially, according to Hilgard Analytics.
Now, with labor shortages and concerns over being detained by ICE, the rebuilding efforts could stall or halt entirely in the near future.
Ports And Trades
U.S. trade isn’t safe from challenges either, as imports decrease YoY (year-over-year) by 9% as of May 2025. The decline has been attributed by Reuters to a combination of tariffs, ICE raids, and other economic concerns.
Port officials have stated that they are expecting to see this trend continue throughout the year, as cargo traffic goes on the decline overall.
Tax Revenue
As fewer people feel confident enough to go out and shop, and others are too scared to show up to work, city and state tax revenues could decline in the near future. This has a domino effect on other sectors, as less funding comes in for schools, clinics, and public safety.
The pressure put on local economies is apparent, as The Los Angeles Times reports that many community members are anxious to go outside and contribute to local businesses’ revenue.
Public Safety
With an atmosphere of fear taking on the air, trust in law enforcement and public agencies is deteriorating at a rapid rate. Both public safety agencies and social services are overwhelmed, as many have avoided work, school, and public spaces altogether.
Many are avoiding help from the appropriate authorities, and there is also concern over the decision to utilize limited military resources to support ICE processes.
Legal And Political Implications
With ICE taking an aggressive stance on immigration, it has sparked controversy, including lawsuits and political backlash. Many legal cases have been filed against federal immigration enforcement by advocacy groups and residents, reported by Courthouse News.
Many feel that the ICE raids are unconstitutional practices, as thousands of people get detained or arrested. California and other states are also considering other legal actions against these raids.
Psychological Toll
Beyond economic decline, the raids have had a direct burden on residents, who have reported mass fear, anxiety, and trauma. Many families, regardless of their status, are worried about how far ICE raids could go and who could be targeted next.
Distress has been reported by mental health professionals and the Los Angeles Times in both those who are missing work and in children who are missing important education as a result of the raids.
The Road Ahead
The future of Los Angeles and the road ahead as many take stock of the economic damage to businesses and the stalling of major rebuilding and repair in the city.
The psychological toll means that many residents are trusting local authorities less and less. City officials and local news reports have stated that the way to recovery could be a long road that is uncertain for many.