Measuring the economic damage of Minnesota’s ICE surge is hard

ST. PAUL, Minn. (Minnesota Reformer) — Emerging statistics on the economic impact of Operation Metro Surge to Minnesota — $203.1 million in damage in Minneapolis, $106 million in lost wages in the Twin Cities — are based on limited data and a healthy dose of back-of-the-envelope calculations.

Anecdotal evidence from Minnesota businesses struggling from dramatic revenue losses and immigrants sheltering at home and losing wages is abundant, but the full scale of the economic impact of the surge is extremely difficult to quantify precisely. Government, think tank and academic researchers are offering early analyses, if only to give a rough sense of the scale of impact, to help policymakers respond to the crisis caused by the surge in 3,000 federal immigration agents in Minnesota. During the surge, people were afraid to leave their homes and encounter federal agents who shot three people, killing two, and detained citizens and legal immigrants.

The problem is that the surge started winding down only in recent weeks — with hundreds, not thousands, of federal immigration agents now left in Minnesota, according to a recent sworn statement from the federal government — and good data is slow to emerge, said Aaron Rosenthal, a researcher at North Star Policy Action who has worked on two reports estimating the surge’s economic impact.

“It may be a long time before we have objective data that can really speak to the impact of what occurred,” Rosenthal said.

Rosenthal said he thinks early estimates, such as the city of Minneapolis’ estimates based on rough calculations, are still valuable, because businesses, families and policymakers “can’t wait a year for proper data.”

The 2026 legislative session began Feb. 17, with immigration enforcement reform and recovery top of mind for Democratic lawmakers in the divided Legislature. Already, Republicans in the House housing committee have turned down a proposal for $50 million in one-time emergency rental assistance. A Senate companion bill for $75 million in rent relief was advanced by the housing committee to the taxes committee, both of which are DFL-controlled.

On Thursday, the city of St. Paul added $1.4 million to its emergency rental assistance program. The city of Minneapolis allocated $1 million for rental assistance on Feb. 5.

Gov. Tim Walz has proposed $10 million in forgivable loans for businesses affected by the surge in immigration enforcement, acknowledging that such a relief package would be “a very small piece of” the recovery.

$106.1 million in lost wages in the Twin Cities Metro Area

The analyses of consumer spending and labor outcomes published by Rosenthal and economist Aaron Sojourner are the most concrete and statistically complex estimates of the surge’s impact available thus far, though Rosenthal said he was hesitant about the results from the consumer spending report and “would not want policymakers to draw on that to make policy.”

He and Sojourner are more confident about the results from the second report, published a week after the first, which used data from a small-business timekeeping platform called Homebase to estimate $106.1 million in lost wages in the metro statistical area, comprising 15 counties.

The researchers used an econometrics method called synthetic difference-in-differences for both reports. A brief explanation for the statistically curious: Ideally, we would be able to compare economic measures in the Twin Cities in recent months to a version of the Twin Cities, during the same time period, that never experienced Operation Metro Surge — an impossible counterfactual.

Using synthetic difference-in-differences, the researchers can create a “synthetic” metro area, out of a combination of other metro areas, which has historically trended similarly to the Twin Cities on, for example, the number of employees working over time. Their analysis included 49 metro areas from across the country, such as Milwaukee, Buffalo and Providence.

They then look at how the number of employees in the synthetic metro area trended during the months of the surge, and use that information to estimate that impossible counterfactual: how the Twin Cities would have fared without the surge.

The city used the U.S. Census Bureau’s American Community Survey to identify a group of households who identify as foreign-born, have limited English and earn money at a job instead of through public assistance. It then assumed that all such households — around 10,000 in Minneapolis — did not earn wages at all in the month of January, leading to $47 million in lost wages.

In the latter estimate, the city’s report assumes that roughly 60% of food and drink establishments in Minneapolis lost an average of $20,000 per week to calculate $60 million in revenue losses for the food and drink sector in a month.

The estimate came partly from survey responses from 82 businesses, around half of which were from restaurants and cafes. Of those, 87% reported decreased sales, a city spokesperson said in an email. The spokesperson also cited a Lake Street Council estimate of economic losses of $30 million in a month for the Lake Street corridor, which has many immigrant-owned businesses, as well as Rosenthal and Sojourner’s first report — the one they are more hesitant about — which estimated a statewide impact of $80 million per week.

“Back-of-the-envelope” calculations will have to do, for now

Nick Graetz, an associate professor of sociology at the University of Minnesota who published a report quantifying rent debt resulting from Operation Metro Surge, calls the type of analyses he and Minneapolis city researchers have conducted “back-of-the-envelope” — basic calculations based on making “some assumptions and projecting from those assumptions.”

“A big difficulty is, that’s kind of what we’re forced to do in the moment before we have really good, solid data on this,” Graetz said. Graetz, who has published research on pandemic-era emergency rental assistance, said that years later, researchers are still in the process of understanding the scale of impact of COVID-19 on rent debt.

He said that Rosenthal and Sojourner’s report on labor impacts is the highest quality so far and thinks it’s more reliable than the city’s estimates of the same measures. Unlike those reports, which estimated overall lost wages before extrapolating to rent need, Graetz and Yusra Murad directly estimated missed rent payments.

The approach of Graetz and Murad, who is a health policy graduate student at the U and an organizer with United Renters for Justice, has some similarities to the city’s: Using American Community Survey data, they identified households who identify as foreign-born and earn money at job instead of through public assistance and earned under $75,000.

They then looked at scenarios in which 30%, 40% or 50% of those households missed rent payments in January and February in order to get a range of $27.4 million to $51.3 million in extra rent debt amassed from immigrants sheltering in place out of fear and not working.

The percentages they picked had some logic behind them — for example, as the city of Minneapolis noted, 42% of foreign-born households have limited English, but they chose 30% as a low end in part because it’s closer to the 21% of all Latino households that were behind on rent in the early days of the COVID pandemic.

The percentages and income cutoff are ultimately “arbitrary,” Graetz acknowledged.

“We fiddled around with a lot of different ways of slicing this,” he said, which changed the estimates, but the scale of rent debt was still in the 10s of millions.

Part of that rent debt was mitigated by a “sophisticated mutual aid network” in which people donate to rent funds for immigrant families. Graetz said his understanding was that mutual aid was on the scale of millions: an impressive amount, but “a sliver of the need that’s been piling up and … continue piling up when rent is due for March.”

Because rent debt was already high before the surge — an estimated $22.3 million in a month — Graetz said he doesn’t think there’s “any risk of overshooting” with bills that propose increases to state-level emergency rental assistance.

The report cites some data from tenant hotlines: Greater Twin Cities United Way’s 211 helpline received a 59% and 118% increase in housing and rental assistance calls compared to 2025. HOME Line, which provides advocacy services to tenants, saw a 72% increase in requests for financial assistance compared to 2025 — higher than in the early months of the COVID-19 pandemic — according to the report.

Cecil Smith, the CEO of the Minnesota Multi Housing Association, said that in his informal survey of landlords controlling 40,000 units, including affordable and market-rate housing, landlords reported a fluctuation of 1 percentage point increase or decrease in collection for rent due Feb. 1, and none reported “significant distress” — suggesting that landlords have yet to experience the effects.

Like Rosenthal, Graetz said that the value of the estimates is to give policymakers a sense of the scale of the problem, which has been missing from “a lot of conversations” on Operation Metro Surge relief; getting to a precise and accurate estimate is not necessarily the goal, especially given the lack of data infrastructure around tracking rent payments.

“We can’t, obviously, get the exact number.”

(Story written by Alyssa Chen with Max Nesterak contributing – Minnesota Reformer)