California’s job market took a gut punch last summer, and researchers say federal immigration raids were a big part of the blow. A new analysis from UC Merced found that private employment in the state dropped 2.9% between May and September 2025, with roughly 447,000 fewer people reporting private-sector work. Noncitizen workers alone fell by about 259,000, a shock researchers say is on par with what California experienced during the Great Recession and the early days of the COVID-19 downturn.
How UC Merced Tracked The Damage
To understand what happened, UC Merced’s researchers pored over week-by-week snapshots from the federal Current Population Survey, focusing on the weeks beginning May 11, June 8, July 6, August 10 and September 7. They linked the sharpest declines to early June immigration enforcement operations, according to a December report by UC Merced's Community and Labor Center.
The report describes a 3.1% fall in private-sector employment from May to early June, followed by a 4.9% plunge during the first week of July, which worked out to about 742,492 fewer workers. By early September, the state was still down a net 2.9% from May, or roughly 446,955 fewer private-sector workers overall, according to UC Merced's Community and Labor Center.
Who Took The Hardest Hit
The losses showed up across citizenship and racial lines, but some groups were hit much harder than others. Noncitizen women saw the steepest percentage decline, while Latino workers registered among the largest drops in raw numbers. In the immediate May-to-June window, noncitizen women fell about 8.6%, Latinos about 5.6% and white workers about 5.3%, CalMatters reported. Researchers say those patterns are especially worrying for industries that rely heavily on immigrant labor.
Economists See Trouble Spreading
“We are seeing a pretty persistent trend,” Edward Flores told the Los Angeles Times, urging policymakers to look for ways to blunt the fallout. Economists quoted in the same report warned that construction, restaurants, agriculture and personal services are particularly exposed, facing cascading delays and higher costs if workers stay home, leave the state or avoid certain job sites.
Policy Ideas And Local Fallout
To keep local economies from seizing up, the UC Merced's Community and Labor Center report urges policymakers to consider targeted cash relief and expanded access to unemployment insurance. The argument is straightforward: undocumented workers are largely cut out of the usual safety nets, so shocks like these ripple quickly into rent payments, grocery bills and neighborhood businesses.
At the same time, state leaders have been sending mixed messages. While publicly condemning the federal raids, some officials have pushed back on proposals to expand benefits to undocumented workers, CalMatters noted.
Court Fights, Patrol Bans And What Comes Next
The legal backdrop has been just as volatile as the job numbers. A federal judge temporarily barred roving enforcement patrols in July, a move that lined up with a partial rebound in the labor data. That reprieve ended when the U.S. Supreme Court allowed the order to be stayed in September, and enforcement intensified again, the Los Angeles Times reports. Researchers say those court decisions help explain the month-to-month swings in the Census snapshots UC Merced examined.
Flores said he plans to keep tracking the survey data and warned that, without moves to curb enforcement tactics or shore up household incomes, the losses could keep piling up. AsAmNews published a summary of the December analysis on Jan. 1, 2026, underscoring how closely advocates and researchers are watching the trend.
