Numerous Democratic leaders say their high-migration, low-wage sanctuary city economies are crashing because President Donald Trump is requiring them to comply with national labor laws.
“We are now expected to absorb the fiscal consequences of [federal] enforcement activities,” the treasurers of 16 states wrote to President Trump. “This is not acceptable.”
The treasurers of Massachusetts, New York, Illinois, Minnesota, and nine other states are asking the federal government to exempt them from national laws that protect Americans’ civil rights, labor, housing, and anti-fraud laws.
“We urge your administration to immediately scale back enforcement activities causing this harm and to ensure the economic stability our communities require,” the treasurers wrote.
The sudden re-application of federal law is a huge shock to the Democrats’ law-exempt “Sanctuary Cities,” said Bill Glahn, at the Center of the American Experiment in Minnesota:
You create the sanctuary economy, and then the rug gets pulled out from under you – the federal government will no longer send you those billions that you’re given to the fraudsters, and the government pulls out those illegal immigrants because they don’t belong there. Now they’re not there to collect welfare money, and they’re not there to spend the money that they [used to] get, and the whole house of cards will collapse.
Meanwhile, Trump is zig-zagging the nation towards a growth economy built on trade, innovation, and productivity.
“We’re going to need robots … to make our economy run because we do not have enough people,” he told Breitbart News in August, adding:
So we have to get efficient … we’ll probably add to [the existing workforce] through robotically—it’s going to be robotically … It’s going to be big. Then, somebody is going to have to make the robots. The whole thing, it feeds on itself … we’re going to streamline things. We need efficiency.
The productivity strategy is very different from the Democrats’ favored economic strategy of Extraction Migration.
The Sanctuary City Economic Model
Sanctuary Cities create revenue for local governments, investors, and CEOs by creating an economy of illegal-migrnat workers, consumers, and renters. The migrants are paid little — but they are also much better paid and safer than in their homeland, and the state government provides many benefits, such as education for their children and healthcare.
Migrants gain from the Democrats’ Sanctuary Cities economic model even as Americans in those cities lose their civil right to a level playing field economy where they are not discriminated against as they compete for decent wages and housing. For example, median rents rose to $16,500 in 2024 amid an average income of $52,000. Roughly speaking, three full-time, minimum wage jobs are needed to afford a two-bedroom apartment in Minneapolis, according to a far-left group, the National Low Income Housing Coalition.
Trump’s enforcement is now ending the Sanctuary Cities’ exemptions from the popular laws that protect Americans in their national market for wages and homes.
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The cities’ reliance on exemptions from federal laws is illustrated by a New York Times article about Minneapolis, headlined “‘It’s Been Brutal’: Twin Cities Economy Suffers Under ICE Crackdown.”
The upside-down article sympathetically describes several supposed victims of ICE enforcement, including Henry Garnica, the owner of a grocery store in East St. Paul:
Four of his 10 workers have disappeared, too afraid to come to the store. He keeps the door locked, opening it only for the occasional customer. Sales are down 45 percent, and his savings are dwindling. “Many small businesses have shut down,” Mr. Garnica said. “It’s not good for the economy, it’s not good for families, it’s not good for anybody.”
The evidence provided by the New York Times‘ article suggests that Garnica and his peers are hiring low-wage illegal migrants, so cheating many Americans out of decent wages and opportunities.
The New York Times article also described a restaurant owner who seems to expect an exemption from federal law:
Oscar Murcia arrived in St. Paul from El Salvador in 2000, and a few years later started a restaurant and bakery called El Guanaco. He now has four locations, serving mostly Latino customers pupusas and tacos. As ICE activity intensified in December, traffic plunged 80 percent at the Minneapolis location, so he closed it. He has cut hours and staff at the rest of the stores, and asked his landlords and bankers for relief on rent and loans.
Even if customers come back, Mr. Murcia will be missing some of his 64 staff members — four of them were detained, even though he said they had work permits and pending asylum applications.
Again, the article tries to portray Murica as a victim of bad federal policy, even as it shows that Murica is in trouble because the federal government is no longer providing him with an exemption to nationwide labor laws and civil rights laws.
Sanctuary cities also generate a fortune for government agencies, and especially for teachers and teachers’ unions, said Glahn.
But for this wave [of migrants], they would be closing elementary schools in Minneapolis. All of a sudden, you know, out of nowhere, [they say] “We’ve been saved by all these kids showing up and populating our schools!” They get a per-pupil payment from the state for every student enrolled, so they have an incentive to enroll illegal immigrant students because that brings in revenue [for schools]. But, of course, none of the [young students] speak English, so now we have cries of “We don’t have Spanish language bilingual teachers!” and then all this extra cost is being imposed [on taxpayers]. So even though they’re getting more money for the students, they’re running big budget deficits … They think they can get the money out of the state, and then the state thinks they can’t get out of the feds.
Migrant communities from pre-modern tribal societies were welcomed to the Sanctuary City Economy because they would pirate federal spending programs, often via Minnesota agencies where top Democratic politicians barred oversight and law enforcement. Their imported poverty becomes a revenue-generator because the federal governments have lavishly funded the relocation of legal refugees, and those funds are recycled into local rent, autos, groceries, healthcare, teachers, and much else.
Minnesota used to be one of the most productive states in the union, and it birthed the Cray Supercomputer company, the 3M technology company, and the medical device industry, Glahn said. But, he said, officials “decided, instead of nurturing that [technology sector], we’re just going harvest what we can from it.”
With the restoration of federal law to Minnesota’s Sanctuary Cities, the “jig is up,” said Glahn. “I see Mayor Frey — he’s looking very haggard these days.”
“This massive ICE presence has also been horrible for Minneapolis business,” Mayor Jacob Frey posted to X on February 3. “We need ICE to leave so our economy can get reignited.”
The same Sanctuary City business model was also exposed in Maine, as ICE officials detained many migrants in January. The Bangor Daily News reported on September 9:
“My store for now is really down,” Maria, a [migrant] grocer [in] York County, said.
Maria was forced to close for 10 days during the ICE surge. She has since reopened but said on this day she’s only had one customer. “Nobody is coming. Nobody. Everyone is scared. They don’t want to go out,” she said.
A survey of 245 businesses by the Greater Portland Council of Governments reported that “Nearly half said that revenue losses, employee absenteeism, transportation issues and decreased productivity also affected their businesses,” according to the Bangor Daily News.