ICE Crackdown Impacts Minnesota Economy, Particularly ALANA Businesses
A recent surge in Immigration and Customs Enforcement (ICE) activity in Minnesota, dubbed “Operation Metro Surge,” is having a significant and measurable impact on the state’s economy, particularly affecting businesses owned by members of the African, Latino, Asian, and Native American (ALANA) communities. Initial estimates suggest a $200 million dent in Minneapolis’ revenue alone, with broader economic repercussions anticipated at both the state and federal levels.
The ALANA Community: A Cornerstone of Minnesota’s Economy
According to Dr. Bruce Corrie, an economist specializing in local Native American and immigrant economics in Minnesota, the ALANA population is integral to the state’s economic vitality. He highlights that one in five workers in Minnesota are part of the ALANA community, and one in ten businesses are ALANA-owned. ALANA communities generate approximately one dollar of every $5 earned in the state. This underscores the significant economic contribution of these communities.
Businesses Face Closure and Revenue Loss
The impact of Operation Metro Surge is already visible in the closure of businesses and sharp declines in revenue. Tejaban Mex Grill in Richfield was forced to reduce its operating hours after losing staff, while Michoacana Ice Cream and Burgers has closed entirely. Sanag, a Somali restaurant in Minneapolis, has experienced a dramatic slowdown in business.
Village Halal Market in Minneapolis has seen its daily revenue plummet from approximately $600 to around $20. Owners are actively seeking donations through GoFundMe to remain operational.
Economic Ripple Effects and Tax Revenue Decline
Dr. Corrie warns that even a short period of economic disruption can have lasting consequences, impacting property markets and residents’ ability to pay rent. He emphasizes that Minnesota is particularly reliant on immigrant labor, with nearly 60% of the state’s labor force and employment growth between 2019 and 2023 attributed to foreign-born workers.
The City of Minneapolis estimates that closures and reduced spending within immigrant communities have resulted in a $200 million loss in revenue. Dr. Corrie notes that this economic fallout is already manifesting in declining tax collections, impacting city finances.
Broader Economic Implications
The economic consequences extend beyond Minneapolis and Minnesota. Dr. Corrie points out that reduced incomes and job losses among immigrants will also lead to lower federal tax revenues, including Social Security and Medicare taxes. He cautions that continued losses could “wound the goose that’s laying the golden egg,” referring to the vital contribution of immigrant-owned businesses.
Path to Recovery
Dr. Corrie believes that recovery will depend on a return to increased spending and the ability of workers to return to their jobs. He suggests tracking key economic indicators, such as sales tax revenue, to assess whether conditions are improving. He remains optimistic that Minneapolis can leverage its community bonds to overcome these challenges, but emphasizes that recovery will take months, not weeks, in the current climate.
Immigrant Economic Power in the Twin Cities
Immigrants in the Twin Cities hold $14.5 billion in spending power and contribute $5.3 billion in taxes annually, including $2.0 billion in state and local taxes.