Wharton professor says ICE raids cost Philadelphia $811 million in sales

Philadelphia lost $811 million in sales revenue over the past year due to increased activity by U.S. Immigration and Customs Enforcement, according to new research from the University of Pennsylvania. Zeke Hernandez, a management professor at the Wharton School, analyzed the economic impact of these enforcement actions. His findings indicate that the city experienced a decline of 193 million store visits during the same period.

Hernandez noted that the spending drops affected all consumer demographics. He stated that the data shows workers and shoppers stopped appearing regardless of their national or ethnic background. "One misconception out there is that the only people that are afraid are immigrants," Hernandez said. "But what I’m finding in the data is that the workers and shoppers who stop showing up are across the board."

The economic decline was not limited to businesses that rely on discretionary spending. Hernandez said the drops also hit stores selling basic necessities, including grocery stores and gas stations. This pattern suggests the impact reached beyond specific types of retail and into the daily consumption habits of the general public.

The study estimates that affected metropolitan areas nationwide saw up to $14 billion in forgone spending during the first year of the current administration. Hernandez began the research after observing how enforcement agents operated in various U.S. communities. He cited news footage from Minnesota during Operation Metro Surge as a key moment that inspired the data collection.

Hernandez described the current enforcement model as different from previous approaches. He explained that agents used to conduct targeted operations that lasted minutes or hours. Now, ICE has maintained a presence in certain cities since the president’s reelection. "These effects are not going away," Hernandez said. "In my study, they never recover."

A spokesperson for the Department of Homeland Security told the Philadelphia Inquirer that the administration’s approach would benefit local businesses. Hernandez said DHS did not address the specific economic effects found in his study. "ICE has not denied that those effects exist," he noted. "What ICE has responded with is political slogans."

Domenic Vitiello, an affiliate of Penn’s Center for the Study of Ethnicity, Race, and Immigration, agreed with the assessment of the current climate. He described the threats of deportation during this term as "incredibly frightening and paralyzing" for mixed-status families. Vitiello added that Philadelphia would be shrinking today if people without legal status suddenly disappeared from the city.

Hernandez urged business owners to speak publicly about the damage they are suffering. He emphasized that meddling with the role of immigrants in the economy hurts people broadly, not just immigrants. The study concludes that the chilling effect of enforcement has been more pronounced in this second term than in the first.