A new report from the Federal Reserve Bank of Minneapolis shows that a recent immigration crackdown in Minnesota is creating serious challenges for local businesses and workers. The findings come from the Fed’s latest Beige Book, a regular survey that gathers information from companies and economic contacts across different regions of the United States to assess economic conditions.
The report describes the region’s overall economic activity as mostly flat. Some areas, such as consumer spending, wages, and prices, showed modest increases. However, several key sectors—including agriculture, manufacturing, and real estate—are struggling. Behind these mixed results is a major concern raised by businesses: the impact of aggressive immigration enforcement.
In Minnesota, federal authorities launched a large immigration operation known as Operation Metro Surge, which has involved thousands of arrests since late 2025. The operation brought a significant presence of immigration agents to the Minneapolis–St. Paul area and triggered widespread fear in immigrant communities.
According to the Fed’s survey, the crackdown has disrupted the local labor market. Many immigrant workers have stopped showing up for work or left the area because they fear being detained. As a result, businesses that depend on these workers are now facing serious labor shortages. Some employers say they are actively trying to hire replacements but simply cannot find enough people willing or able to fill the positions.
One landscaping company told the Federal Reserve that the situation has significantly reduced its workforce. The company reported that several employees stopped coming to work after enforcement operations intensified. When the company tried to recruit new workers, it struggled to find applicants. As the employer put it, there were simply “not any people to hire.”
The labor shortage is affecting more than just individual companies. Restaurants, tourism businesses, and hospitality firms in the Minneapolis–St. Paul area have also reported difficulties maintaining staff. Some legal immigrant workers have chosen not to work or travel to job sites because they fear encounters with immigration authorities. This has created operational challenges for businesses that rely on a stable workforce.
Beyond employment issues, the crackdown is also hurting local consumer activity. When workers lose their jobs or stop working, they lose income that would normally be spent in the community. The Fed report notes that many immigrant workers who could not work due to enforcement actions are now losing wages. This puts their ability to pay rent, utilities, and other basic expenses at risk.
Local businesses say this drop in income among workers is reducing customer traffic. Retailers, restaurants, and other service businesses have seen fewer customers because people are either afraid to go out or simply have less money to spend. The result is a ripple effect across the local economy.
Despite these challenges, the broader U.S. economy remains relatively stable. The Beige Book indicates that economic activity has expanded in several regions, while others have remained steady or slowed slightly. Inflation and pricing pressures continue, but many businesses are hesitant to raise prices too quickly because they worry about losing customers.
Still, the Minneapolis Federal Reserve’s findings highlight how immigration policy can influence local economies. When businesses lose access to workers, it can affect productivity, hiring, and consumer spending. For Minnesota companies that depend heavily on immigrant labor, the crackdown has created uncertainty about how they will maintain operations in the months ahead.
Many business owners say they are now trying to adapt by adjusting schedules, searching for alternative workers, or scaling back operations. But for some, the challenge remains simple and immediate: there are jobs available, yet not enough workers to fill them.
