In the sweltering July heat of Houston’s East End, Maria Delgado’s small grocery store sits unusually quiet for a Saturday afternoon. The colorful piñatas hanging from the ceiling barely sway as the door opens just a handful of times throughout the day. Three years ago, this neighborhood mercado would have been bustling with families shopping for weekend gatherings.
“My sales are down almost 40% from last year,” Delgado tells me, arranging packages of corn husks for tamales that fewer customers now purchase. “People are afraid to go out. They’re saving money because they don’t know what tomorrow brings.”
Delgado’s store represents just one data point in a troubling economic trend affecting Hispanic-owned businesses across the country. Recent Federal Reserve Bank of Dallas regional surveys indicate Hispanic business revenue has declined approximately 28% in areas with intensified immigration enforcement actions.
This economic contraction isn’t happening in isolation. The Migration Policy Institute reports that heightened immigration enforcement has created “economic dead zones” in communities with large immigrant populations. When people fear leaving their homes, local commerce inevitably suffers.
Roberto Sanchez, an economist at the Urban Institute who studies immigrant economic contributions, explains the ripple effect. “It’s not just undocumented immigrants staying home. It’s their family members who might be citizens, their neighbors, their entire social networks. The economic withdrawal is happening at a community level.”
The numbers bear this out. According to the Latino Business Action Network, Hispanic-owned businesses were the fastest-growing segment of small businesses before the recent enforcement surge, contributing over $800 billion annually to the U.S. economy. Now their data shows a concerning reversal in several states.
Beyond retail, the construction industry faces significant labor disruptions. Carlos Montoya, who runs a mid-sized construction company in Phoenix, has watched his employee roster shrink by nearly a third.
“I can’t find enough workers,” Montoya says during a site visit where half-finished houses stand in various stages of completion. “The experienced laborers who’ve been with me for years are disappearing, either because they’ve been detained or because they’ve moved to places they consider safer.”
This labor shortage translates to higher costs and delayed projects. The Associated General Contractors of America estimates that construction costs have increased by 12% in markets most affected by labor shortages tied to immigration enforcement.
Financial institutions serving Hispanic communities also report troubling signals. Deposits at Latino-focused credit unions have fallen approximately 18% as families withdraw savings, according to the National Association of Latino Credit Unions and Professionals.
“People are keeping cash at home rather than in accounts,” explains financial advisor Elena Gonzalez. “They’re preparing for the worst-case scenario—having to relocate quickly or support family members who’ve been detained.”
The economic damage extends beyond Hispanic businesses themselves. Research from the American Immigration Council shows that immigrant-heavy neighborhoods support diverse business ecosystems. When immigrant consumers withdraw, everyone from corporate chain stores to independent retailers feels the impact.
Even businesses with no direct connection to immigration are reporting losses. The Main Street Alliance, a small business advocacy organization, surveyed members in six states and found that businesses in predominantly Hispanic neighborhoods reported 22% lower foot traffic compared to similar businesses in other areas.
“The fear is contagious,” says Sam Parker, who owns a hardware store in a predominantly Hispanic neighborhood in Tucson. “When families stop going out for anything but absolute necessities, every business suffers. My store isn’t an immigrant business, but most of my customers are immigrants or have family members who are.”
The Federal Reserve Bank of Atlanta’s small business sentiment index shows business optimism among Hispanic entrepreneurs at its lowest point in eight years. This crisis of confidence threatens to undermine one of America’s most dynamic entrepreneurial communities.
Public health experts also warn of long-term economic consequences. Dr. Lucia Morales, a public health researcher at the University of Texas, has documented decreased preventive care visits among Hispanic communities.
“When people avoid routine healthcare out of deportation fears, we see more emergency room visits for preventable conditions,” Morales explains. “The economic costs of treating advanced illnesses far outweigh preventive care, creating additional strain on local economies.”
Some communities are attempting to mitigate the damage. In Chicago, a coalition of business groups and local government has launched a “Safe Commerce” initiative, working to reassure residents that local businesses remain safe spaces regardless of immigration status.
Yet these local efforts face limitations. Treasury Department data indicates that money transfers to Latin American countries have increased 24% year-over-year, suggesting that immigrants are sending more money to family abroad rather than spending it in local economies.
The economic consequences extend to tax revenue as well. The Institute on Taxation and Economic Policy estimates that undocumented immigrants contribute approximately $11.7 billion in state and local taxes annually. Communities experiencing population decreases due to enforcement actions report corresponding drops in tax collection.
For business owners like Maria Delgado, policy debates feel distant compared to the immediate reality of declining sales and uncertain futures.
“I built this store over 15 years,” she says, looking around at shelves of products selected specifically for her community’s tastes. “Now I don’t know if I’ll make it through the year. This isn’t just my livelihood—it’s part of the neighborhood. When businesses like mine close, something important is lost.”
As the immigration debate continues in Washington, the economic data suggests that America’s Hispanic business community is already paying a steep price.
