The ICE surge has disrupted business. Minnesota’s top economic official is ‘very concerned.’

Julian Ocampo said his family’s restaurants lost hundreds of thousands of dollars since they temporarily shuttered operations to keep customers and staff safe during the surge of immigration enforcement in Minnesota. Making payroll has become difficult.

“Small businesses don’t have a safety net,” he said. ”When hardship hits, it hits the people behind the business, their families and neighborhoods they serve.”

Ocampo advocated for support alongside other local entrepreneurs, boosters and Matt Varilek, Minnesota’s top economic official, at his restaurant Los Ocampo in St. Paul on Jan. 29. It’s too early to calculate an overall economic impact, but Mayor Kaohly Her said small-business owners serving immigrant communities are generally reporting sales down by 60% to 70%.

Varilek, who is commissioner of the Minnesota Department of Employment and Economic Development under Gov. Tim Walz, said he expects the impact of the immigration enforcement surge to be “very significant.” This has included federal officers detaining employees at work and the shuttering of small businesses as fearful employees and customers stay home.

“I’m very concerned that as long as we are a target for these federal actions in ways that stoke fear, that it’s harder for businesses to decide to expand here in Minnesota — and that’s really not good for anybody,” Varilek said in an interview.

Varilek spoke with a Minnesota Star Tribune reporter about the economic effects of the surge in federal immigration enforcement. The interview has been edited for length and clarity.

Lots of Minnesota businesses are feeling a lot of pain. It was initially concentrated amongst immigrant-led businesses or businesses with workers who have an immigrant background — or simply have skin that is dark enough that ICE thought they should be questioned.

So, businesses of all sorts in affected areas have workers who are worried about showing up. They have customers who are worried about showing up. And it’s not limited just to retail and hospitality, but I hear from leaders in manufacturing saying that, for example, supply chains may be disrupted by truckers that are nervous about coming into Minnesota for fear of them being questioned by ICE.

They are probably better-equipped to share how they are being impacted and to make their decisions about communications and civic engagement.

I would say we are grateful for a variety of allies who are willing to engage in whatever way they can to restore an ability to grow our economy. Because this situation, again, is having those negative impacts. We have the national economy slowing in a variety of ways: unemployment rate rising. Consumer confidence figures just came out indicating we’re at the lowest level now since 2014. And then Minnesota is facing a much more concentrated version of the impact of federal actions and policies.

And so that’s why we just need as many partners as we can coming to the table to assist with that in public ways and in private ways. And that includes consumers: those that are willing and able to be going out and spending their money and supporting our local businesses to help us get through this.

I would leave that part to those companies to make their decisions. But I would just say that we welcome whatever anyone can bring in terms of progress towards resolution and return to normalcy, because we’re seeing short-term impacts. I fear long-term impacts.

Population dynamics are ever-so-closely related to economic dynamics. We hear from lots of businesses that they need more people — and more talented people — and so we’ve been fortunate that in many years, international migration has been a strong net positive for us.

That’s why it’s important to be a welcoming state, in addition to the fact that it’s the right thing to do. It has positive economic applications, and that’s been especially true when our net domestic migration has been negative, which has been true in almost all of the last 20 years, with maybe one or two exceptions.

The great news is that in 2025, domestic migration to Minnesota, on balance, turned positive, which reflects the governor’s efforts to make this the best state for children and families. It reflects our strong business environment.

We certainly need more of it, and I worry that what we are confronting with the actions of the federal government is just making it harder for us to continue that excellent progress.

We need for that to happen as soon as possible, as the governor and others have said, because it will be difficult to recover while the source of the problem is still happening.