On September 4, Immigration and Customs Enforcement (ICE) raided a Hyundai plant in Georgia and arrested about 475 mostly South Korean nationals. Images of them shackled by the wrists and ankles have caused outrage. The workers were engineers and equipment installers brought in for highly specialized jobs requiring skills that, according to the plant manager, are in short supply. This episode has exposed a tension between the Republican Party’s political agenda and the realities of America’s political economy.

There is a general consensus that mass deportations and the broader fear that they instill shrink GDP, lower overall employment for American workers, reduce wages, and drain local and state tax revenues. Last Friday’s highly anticipated employment report from the Bureau of Labor Statistics underlined growing recession concerns. There are fewer job openings, a slight rise in unemployment, and slowing wage growth. These bleak numbers make a Fed interest rate cut at the next Federal Open Market Committee, the Fed’s rate-setting body, almost inevitable. According to a FedWatch tool run by investors, the odds of a quarter-point cut are north of 96 percent. The administration’s hard-line immigration regime is one of the causes of the economic slowdown to which the potential Fed rate cut is a response.

Economists who have modeled possible deportation scenarios based on Donald Trump’s agenda project multi–percentage point losses in GDP and employment, a higher federal deficit, and rising inflation. Immigration restrictions, they estimate, could actually impose a two to five times larger “cost” than Trump’s proposed protectionist policies, such as tariffs.

This is because immigrants largely complement, not substitute, jobs held by US citizens. Like the Hyundai plant workers, they often take jobs in industries facing labor shortages, provide their skills and innovation, and in doing so, make more jobs possible instead of removing them. In the meantime, they also contribute significantly (both directly and indirectly) to local government revenue without benefiting from public programs.

While Trump’s deportation rate is comparable to that of former presidents Joe Biden and Barack Obama, the current administration’s campaign has been particularly violent. From giving ICE the permission to raid schools, churches, and hospitals to reopening Guantanamo Bay, illegally sending men to the maximum-security prison CECOT in El Salvador, or arresting high-profile pro-Palestine student organizers, it is no surprise that all forms of immigration into the United States are at an all-time low.

Should Trump’s policies continue on this track, we will continue to lose not just the undocumented workers who are deported but the millions who will choose not to migrate here in the first place. For example, about 8.6 million people from Mexico will choose not to cross the border. This silent loss is another difficult to measure but profound mechanism through which Trump’s policies weaken the labor force and slow growth.

So who does benefit from ICE’s expansion? The Brennan Center for Justice, a nonpartisan law and policy institute that works on criminal justice reform and democracy, warns that the tenfold increase in the department’s funding from the Big Beautiful Bill entrenches a deportation-industrial complex, or a “lopsided, enforcement-only machine,” which will prioritize detention and deportation by channeling contracts and financing to private prison corporations, surveillance firms, and security contractors.

Nearly 90 percent of people in ICE custody are in facilities run by for-profit companies. For decades, the government relied primarily on municipal bonds to finance prisons and detention centers. Sentencing reforms during the 2010s reduced inmate populations and federal subsidies, bond prices sank, and the sector seemed on the verge of default. This was reversed during Trump’s first term. Radical immigration enforcement allowed the prison bond market to rebound as investors realized that a steady stream of detainees would guarantee revenues for facilities once deemed distressed.

Since then, financing has shifted. Today the two largest ICE contractors, GEO Group and CoreCivic, rely less on municipal bonds and more on private financing, designing, building, and financing detention centers themselves. This shift is not incidental: both firms restructured themselves as real estate investment trusts (REITs) in 2013, developing a growth model based on acquiring and controlling facilities. REITs reflect the broader turn of institutional investors toward real estate acquisitions as a revenue source. They distribute profits to their shareholders while avoiding corporate income tax. The administration now plans to open four new ten-thousand-bed detention facilities and fourteen smaller sites with GEO and CoreCivic.

The shareholders behind this expansion include major asset managers such as BlackRock, Vanguard, and State Street and more active strategic institutional investors such as Goldman Sachs and Wellington Management. Palantir was recently contracted by ICE to build “ImmigrationOS,” a data platform that relies on AI and data mining to surveil immigrants. Palantir saw 53 percent growth in revenue from government contracts in the second quarter of 2025 compared with the same period the year before, including over $255 million from the Department of Homeland Security. Alex Karp, the Palantir chief executive, recently told investors he had “enormous pride in the company’s extraordinary numbers.” Their largest investors are also household names: BlackRock, Vanguard Group, Morgan Stanley, and others. What once looked like a risky investment now looks like a stable dividend-bearing security.

This evolution reflects a larger transformation of the US economy. Since the early 1980s, capital has been increasingly directed into financial markets rather than productive investment. For Wall Street, the deportation-industrial complex is another investment opportunity in a moment of slowed economic growth.

Of course, these investments will do nothing to address the backlog of immigration cases, lack of funding for legal and social services, or support other elements that make the system more functional or “effective.” Instead, it will supercharge the part of the system designed to lock up and send more people away faster and with fewer safeguards.

This is more than a humanitarian crisis. It’s also the entanglement of financial markets, macroeconomic policy, and state violence. The deportation-industrial complex is economically irrational and socially destructive. But somehow, it is profitable.