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Trump immigration sweeps upended L.A.’s economy, with some businesses losing big

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Trump immigration sweeps upended L.A.’s economy, with some businesses losing big

The first month of President Trump’s immigration crackdown in Los Angeles put a dent in the area’s economy, costing business owners millions in lost revenue and exponentially more in lost output from workers, according to a new county report.

The survey found that 82% of businesses reported negative impacts from the raids that began early last June and 44% reported losses of greater than half their normal revenue. More than two-thirds of respondents said they had changed operations, such as by reducing hours and delaying expansion plans. Some said they had to close temporarily or had difficulty obtaining supplies and services from usual vendors.

The report was prepared jointly with the L.A. County Department of Economic Opportunity; researchers from a nonprofit group called the Los Angeles County Economic Development Corporation conducted an online survey of hundreds of local businesses.

The survey is the latest evidence that the raids upended parts of the Los Angeles economy as some residents here illegally went underground and employers lost workers amid the arrests. It’s clear the immigration action hit some areas and sectors of the economy harder than others. Some communities were largely unaffected. But in immigrant communities such as downtown L.A., Boyle Heights and Santa Ana, merchants have reported impacts.

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The report said some sectors, such as restaurants, construction and retail, would be particularly hard hit. But the authors said both employers and employees found innovative ways to keep going.

“How these businesses are adapting, it’s really a testament to their resilience,” said Justin L. Adams, a senior economist with the Los Angeles County Economic Development Corporation.

According to the report, released this week, undocumented workers contribute an estimated $253.9 billion in total economic output, equivalent to 17% of L.A. County’s gross domestic product. These undocumented workers support over 1.06 million jobs and generate $80.4 billion in labor income across a range of industries, including construction, manufacturing, retail, and services, the report said.

But when masked agents with the Department of Homeland Security started roaming the Southland, targeting immigrants for deportation and arresting the activists and American citizens who followed them on their missions, businesses suffered as workers in the county’s underground economy went into hiding.

In the first week of June alone, when the raids began in earnest and the National Guard was deployed into the city with active-duty Marines, researchers estimated that the nightly curfew downtown resulted in an estimated $840 million in economic output losses, according to the report.

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An analysis of L.A. Metro data, according to the report, showed that bus ridership on high-vulnerability transit lines around that time declined about 17,000 monthly riders compared with baseline levels.

“The out-of-control ICE raids are doing senseless and catastrophic harm to our country, and we are seeing the toll,” L.A. County Supervisor Janice Hahn, who lobbied to commission the report alongside Supervisor Hilda L. Solis, said in a statement.

Adams, one of the authors of the report, said researchers partnered with the USC Equity Research Institute to create an updated, current estimate of undocumented workers in L.A. County, finding it to be about 948,700.

With the county’s overall population at roughly 10 million, undocumented residents represent nearly 1 in 10 people, Adams noted.

“It’s pretty sizable,” he said. “They are going to have a large economic impact on the county.”

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That businesses in the area have been hurt by raid-related disruptions is not necessarily surprising, Adams said, but the report “reinforced and helped quantify that.”

He continued, “It’s not straightforward to do, because this is essentially trying to measure a big portion of the shadow economy.”

About 311 people responded to the survey, but not everyone fully identified themselves, their business or its location, possibly out of concern for future immigration raids, Adams said.

Across some 178 interviews, business owners described seeing significant changes among consumers, including reduced spending and customers avoiding certain areas of the county altogether. Employees expressed fear about coming to work, productivity fell due to worker anxiety, and businesses faced difficulty finding replacement workers, the report said.

Owners described additional costs such as banking expenses for loans to cover lost revenue, more advertising and marketing to attract more business, boosted wages to attract replacement workers, and legal expenses to support detained workers. One business owner said she picked up a side job in order to keep her workers employed, while others had added expenses such as lunch deliveries or gas cards to help employees avoid open areas and public transportation.

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For small-business owners, even small fluctuations in revenue can have ripple effects, affecting their ability to pay rent and vendors.

Ben Johnston, chief operating officer of Kapitus, a firm offering financing to small businesses, wrote in a memo describing expected trends in 2026 that he expects costs to continue to rise for the restaurant industry in particular, which already struggles with thin profit margins and relies heavily on immigrant labor.

“The crackdown on undocumented immigration weighs on the industry, further reducing margins for restaurants who are trying to keep menu prices as affordable as possible,” Johnston said.

The L.A. County report echoes findings by UC Merced researchers based on U.S. census survey data that found that the week after the raids began in June, the number of people reporting private sector employment in California decreased by 3.1% — an employment downturn matched in modern history only by the COVID-19 lockdowns.

Statewide, undocumented workers generate nearly 5% of California’s gross domestic product through their wages earned and the goods and services they help produce alone, according to a report last year from the Bay Area Council Economic Institute. That rises to 9% when additional business activity and other benefits of their labor are added.

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With 2.28 million undocumented immigrants living in California, they represent 8% of workers in the state, with nearly two-thirds having lived in the state for over a decade. Their total contribution in local, state and federal taxes is $23 billion annually, according to the Bay Area Council Economic Institute.

In L.A. County, officials have sought to stem the bleeding from the immigration sweeps by launching a fund to deliver financial relief to small businesses. As of December, some 367 businesses have been awarded more than $1.53 million in grants. The county has also expanded potential paid hours for youth who have become primary earners for their families due to immigration enforcement and sought to connect these youth to employment opportunities.

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Erewhon opens new Southern California location

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Erewhon opens new Southern California location

Erewhon opened its newest location in Glendale on Wednesday, marking the luxury grocer’s 14th store in Southern California with more set to open soon.

The new store, located at 520 N. Glendale Ave., includes the chain’s signature cafe and tonic bar as well as an indoor-outdoor patio space.

Known for its upscale, trendy products and high prices, Erewhon has grown into a tourist destination in Los Angeles and a hot spot for celebrities and influencers.

The Glendale location will bring Erewhon staples to trendy consumers in the area, including the beloved Strawberry Glaze Skin Smoothie, which until last year was named after the model Hailey Bieber.

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Employees at the store handed out complimentary gift bags and fresh flowers during the grand opening Wednesday morning.

“This location was designed to reflect the spirit of the neighborhood while creating a welcoming space to gather, centered around wellness, connection, and a commitment to the quality standards that define Erewhon,” Erewhon President Josephine Antoci said in a statement.

The company purchased the space, which was formerly a hardware store, in 2024.

Erewhon has locations in several of Southern California’s wealthiest areas, including Calabasas and Beverly Hills. It also has stores in Venice, Manhattan Beach and at the Grove.

“Erewhon’s decision to invest in Glendale reflects confidence in our city’s economic future,” Glendale Mayor Ardashes Kassakhian said in a news release.

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The grocer was founded in 1966 by Japanese immigrants Michio and Aveline Kushi — pioneers of the natural-foods macrobiotic movement — who began selling imported organic goods out of their Boston home. In 1969, the company opened its first Los Angeles location on Beverly Boulevard.

Josephine and Tony Antoci bought the company in 2011 and helped launch it to its luxury status with a cult-like following. Tony serves as chief executive while Josephine handpicks much of the store’s merchandise.

By the mid-2010s, Erewhon had become a watering hole for celebrities such as the Kardashians and the Beckhams.

The company has its eye on further expansion. A Thousand Oaks location is slated to open this August and stores in Costa Mesa and downtown Los Angeles are planned for 2027. An Erewhon cafe opened in the Los Angeles County Museum of Art’s new David Geffen Galleries earlier this month.

The Pacific Palisades location, which shut down after the wildfires last year, is set to reopen in January.

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The Glendale Erewhon takes the place of Virgil’s Hardware Home Center, which opened in 1932 and closed in 2019.

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Volvo to pay $197 million after hidden pollution device found in California truck engines

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Volvo to pay 7 million after hidden pollution device found in California truck engines

Volvo Group North America has agreed to pay nearly $197 million to resolve allegations from California regulators that company’s heavy-duty truck engines violated California emissions standards and certification requirements.

About 10,000 diesel truck engines manufactured by Volvo were equipped with an undisclosed device, causing them to release excessive levels of smog-forming pollution across California, according to the California Air Resources Board, the state agency that regulates air pollution and greenhouse gases.

Volvo is developing a software fix to repair many of these vehicles and extend their warranties at no cost to the owners. Eligible truck owners are expected to be notified of a non-mandatory recall on these trucks next year.

CARB found inconsistencies in the Swedish automaker’s data while testing trucks with Volvo engines from model year 2010 to 2016, which resulted in the investigation and ensuing settlement.

“This case underscores why CARB’s compliance testing and strong enforcement are essential to protecting the state’s air quality and public health,” said Lauren Sanchez, chair of the state Air Resources Board. “Our responsibility goes beyond adopting regulations — we are committed to upholding them by identifying violations and holding companies accountable for meeting emissions standards.”

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Under the settlement, Volvo will pay $17.5 million in civil penalties to reimburse the state for the cost of the investigation and support its vehicle-testing operations. Another $179 million will go toward investing in clean-air initiatives, such as electric vehicle incentive programs, to offset air pollution that resulted from the alleged violations.

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Commentary: A surge in Nevada data center construction threatens the electricity supply for 49,000 Californians

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Commentary: A surge in Nevada data center construction threatens the electricity supply for 49,000 Californians

Local opposition has blocked or delayed more than a dozen huge data center projects around the country. But these Californians don’t get a vote on Nevada projects that could affect their electricity supply.

Those big data centers being built for artificial intelligence firms are in bad odor nationwide.

Seven in 10 Americans oppose projects in their local communities, according to a recent Gallup poll. More than a dozen, valued at some $64 billion, have been blocked or delayed by local opposition in recent years.

But what happens when the people directly affected by these project plans don’t get a vote?

Data centers did not influence this decision.

— NV Energy, explaining its move to end service to 49,000 California customers. But is it telling the truth?

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That’s the quandary faced by 49,000 residents living on the California side of Lake Tahoe, mostly in the city of South Lake Tahoe. The surge in construction of data centers in Nevada is prompting the Nevada utility that supplies 75% of the Californians’ electricity to cut them off next year.

The California-regulated utility that carries the electricity over the state line to their homes and businesses has assured them that it will find alternative sources to protect them from losing service — but hasn’t promised that their rates won’t increase because of the transition.

“It’s like we don’t exist,” Danielle Hughes, the head of a local energy nonprofit and an advocate for the customers, told me. The crisis facing those residents is just the latest in a long line of indignities they have suffered thanks to several unique characteristics of their energy market, Hughes says.

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For one thing, they are permanent residents of the community — teachers, firefighters, police, and service workers at the hotels, restaurants and resorts that bring in a tidal wave of visitors every winter. The latter, as well as vacation-home owners and renters, generate seasonal electricity demands that drive up power costs year-round.

That means that the permanent residents are in effect subsizing the visitors, even though they’re lower-income ratepayers than the generally well-heeled vacationers.

Before delving deeper into the issues for the permanent residents, let’s examine the effect of the large-scale data centers being built and proposed in Nevada, and more generally coast to coast.

Nevada has emerged as a prime location for data centers, in part due to the wide open, undeveloped acreage available for construction. More than 60 data centers have sprung up around Reno and Las Vegas, with many more slated to rise in the northern part of the state, according to a survey by the Desert Research Institute, a Nevada nonprofit.

“We’re right at the epicenter for global expansion” of data centers, observed Sean McKenna, a co-author of the report.

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The existing data centers consumed 22% of Nevada’s electric generating capacity in 2024, DRI calculated. If all those under construction and on the drawing board are completed, that figure would rise to 35% by 2030. NV Energy, the Nevada utility that provides the electricity for the California side of Lake Tahoe, estimates that the electricity demand for just the 12 projects being planned would come to 5,900 megawatts — nearly three times the generating capacity of Hoover Dam.

That construction frenzy is likely to bring some of the same drawbacks that have provoked local communities to militate against data centers — not only pressure on existing electricity capacity, but also a voracious appetite for water due to the cooling needs of the computerized equipment managing the data for AI applications. Residents in the neighborhoods of data centers have also complained of incessant noise coming from their 24/7 operations.

With global warming driving up temperatures in Nevada’s semiarid and desert zones, they add, residents will find themselves in a contest with data center owners for an already inadequate supply of power in the state. DRI warns: “Local utilities and ratepayers in data center cluster regions like Northern Nevada also risk bearing the costs of subsidizing AI and computing services as power grids expand their infrastructure.”

In many communities, the result has been a vigorous and vocal backlash, including in California. They’ve packed town halls, prompted state and local political leaders to legislate limits on their growth or even to ban them.

That brings us back to the situation around Lake Tahoe.

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In terms of its electric utility service, the region has long been an outlier. About 25% of its power comes from two solar farms operated by Liberty Utilities, but the rest comes from NV Energy; the reason is that it’s unconnected with the California transmission grid but accessible via a line from Nevada.

As a result, it falls into the cracks among energy regulators. Because it’s not part of the California grid, the California Public Utilities Commission has only limited jurisdiction over its service, although it has the authority to approve its electricity rates. The Nevada Public Utilities Commission doesn’t oversee the customers’ service at all, because they’re not Nevada residents.

The region is also unusual because its peak energy demand comes in the winter; most of the rest of California peaks in the summer, when air conditioners are on full blast.

Hughes and other residents have maintained that because the CPUC hasn’t modeled electricity demand for their small region, they have been paying for infrastructure that doesn’t serve them.

“We’ve been paying for assets in Nevada,” Hughes says, “without it being tracked by the state of California.”

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Liberty does charge permanent residents in the Tahoe area about 2% less than the rate for part-time residents, but the discount should be much larger, Hughes says. Liberty didn’t respond to my request for comment.

Earlier this year, NV Energy informed Liberty that it would no longer serve as its wholesale energy provider after mid-May next year, and urged Liberty to make haste to secure an alternate supplier.

Liberty promised its customers in a recent statement that they “will not be left without service” as a result of the change. “This does not mean the power is shutting off,” Eric Schwarzrock, president of Liberty Utilities, said at a South Lake Tahoe City Council meeting last month, according to the news site SFGate. “Energy companies, utilities, large customers change energy supply frequently.”

Liberty and NV Energy both attributed the change to a preexisting agreement that anticipated that NV Energy would eventually cease providing power to Liberty’s customers, although their interpretations of the deal and the impetus for the change appear to be at odds.

The “long-standing agreements and planning assumptions … date back more than a decade,” NV Energy said in a May 14 statement. That was “well before data center growth became a factor,” the utility said. “Data centers did not influence this decision.”

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That is, to be charitable, dubious. How do we know? Liberty said so in a March 6 letter to the California Public Utilities Commission, requesting permission to take “immediate action” to find alternative providers.

The letter stated that Liberty had expected its arrangement with NV Energy to “continue indefinitely.” During their last negotiations for an extension of the deal, however, NV Energy informed Liberty that it would cease serving Liberty on May 31, 2027, with a possible extension to Dec. 31.

“This change of stance by NV Energy was a surprise to Liberty,” the letter said. Liberty ascribed NV Energy’s decision to new “market circumstances” in the latter’s home service region. Among them: “A number of entities are seeking to add large loads such as data centers into the area.”

NV Energy says it will continue serving Liberty’s customers until Liberty secures a new supplier, even if it misses the May 2027 deadline; the ultimate deadline is Dec. 31, 2027, when NV Energy expects to complete its 350-mile Greenlink West transmission line between Las Vegas and the Reno area, part of a $4.2-billion infrastructure upgrade.

Yet that still leaves an open question that should make those customers nervous: How much will they be paying for power?

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In its recent statement to customers, Liberty made only the vaguest of promises. “While no utiulity can predict the exact future cost of energy,” it said, “affordability is a primary goal” in its search for new suppliers. “With a competitive bidding process, we aim to find a cost-effective solution for your monthly bill.”

But any new supplier would have to come from outside California, because of the region’s lack of any connection with the state’s grid. And generators in nearby states face their own rising demands from data centers, drought and global warming.

The drawbacks of these massive industrial installations are beginning to be felt by their neighbors, including higher electricity prices and dwindling water supplies. They’re only going to get worse.

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