A Year After LA's ICE Raids, Small Businesses Are Still Losing Millions

Walk through parts of the Los Angeles Fashion District today and you'll see something researchers didn't expect a year out: empty storefronts that used to have lines out the door. A new study from the UCLA Latino Policy and Politics Institute, done in partnership with Inclusive Action for the City, found that immigration enforcement operations in June 2025 triggered an economic shock to LA County's small business corridors that, more than a year later, still hasn't resolved.

This isn't just an LA story. It's a preview of what business owners in any city facing sustained immigration enforcement activity should expect — and a set of hard numbers that owners elsewhere can use to plan for it.

What the Numbers Actually Show

Researchers looked at businesses within a half-mile of nine immigration enforcement sites across Los Angeles County. In just the two weeks following the June 2025 operations, those businesses recorded roughly 46,000 fewer customer visits and an estimated $3.16 million in lost revenue. The Fashion District alone — an area dense enough that researchers counted more than 550 businesses within a half mile of one enforcement site — lost an estimated $1.52 million in that same two-week window.

The damage didn't stay contained to two weeks. Among the small business owners who participated in the study, 59% reported revenue declines exceeding 50%, and another 20% reported declines between 26% and 50%. Nearly 7 in 10 businesses — 68% — temporarily closed or cut their operating hours. And 51% said staff missed work because they were afraid of encountering enforcement activity on their commute or at the job site.

A separate survey from the Los Angeles County Department of Economic Opportunity and the Economic Development Corporation found that 82% of surveyed businesses said they were negatively affected by the raids, with more than half reporting reduced sales.

Why the Damage Outlasted the Raids Themselves

The enforcement operations themselves were measured in days. The economic disruption has lasted more than a year. That gap is the part small business owners in other markets should pay closest attention to.

Fear, once established in a neighborhood, doesn't dissipate quickly. Customers who are worried about being questioned, detained, or simply caught in the middle of an operation change their routines — they shop less often, drive further to avoid certain areas, or stop going out altogether. For businesses that depend on walk-in foot traffic, especially retail, restaurants, salons, and other service businesses in immigrant-heavy commercial corridors, that behavioral shift shows up directly in daily receipts.

On the labor side, the effect compounds the problem. When over half of surveyed businesses report employees missing shifts out of fear, owners are left short-staffed at the exact moment they most need to keep the doors open and reassure remaining customers that things are normal.

What This Means If You Own a Business in an Affected Area

Model the cash flow hit before it happens

If your business operates in a community where enforcement activity is a realistic possibility, build a contingency scenario into your financial planning — the same way you'd plan for a seasonal slowdown or a supply disruption. Reviewing your profit and loss statement regularly makes it easier to spot a sales decline early and react before it becomes a cash crisis.

Diversify how customers reach you

Businesses that depend entirely on walk-in traffic were hit hardest in the UCLA study. Even a modest online ordering, delivery, or pickup option gives customers a way to keep supporting your business without needing to be visible on the street. This won't fully replace foot traffic, but it can blunt the worst of a sudden drop.

Check your insurance coverage now, not after a disruption

Business interruption provisions vary widely by policy, and most standard policies weren't written with this kind of disruption in mind. It's worth a conversation with your carrier or broker about what your business insurance actually covers if foot traffic collapses for reasons outside your control.

Communicate directly with your workforce

The study found more than half of affected businesses had employees miss work out of fear. Clear, honest communication about what the business is and isn't seeing, and what support is available, can reduce uncertainty for staff who are trying to decide whether it's safe to come in.

Know your rights and your options

Business owners don't have to navigate this alone. Local chambers of commerce, small business development centers, and legal aid organizations in affected areas have increasingly built resources specifically for this situation, including guidance on what a business is and isn't required to do if enforcement activity occurs on or near the premises.

A Broader Pattern Beyond Los Angeles

LA County isn't an isolated case. Researchers and reporters have documented similar disruptions in other markets, including Minnesota, where immigrant-owned businesses have temporarily closed or scaled back hours amid enforcement concerns. National polling has found that roughly 47% of small business owners say increased immigration enforcement has negatively affected their business in some way.

For owners operating in any community where enforcement activity has occurred or could occur, the UCLA findings are a useful benchmark: the visible disruption may last days, but the financial impact can stretch well past a year. Planning for that timeline — not just the initial event — is the difference between weathering it and losing the business entirely.

Photo by Tem Rysh on Unsplash