Web Exclusive | February 2017 | By Kevin Hardy

Donald Trump and the Future of Immigrants in Foodservice

Even with a litany of pledged legislative priorities before him, President Donald Trump appears poised to take action on immigration. The results, one way or the other, will be dramatic.
For all the optimism in the industry, there is worry that Trump’s immigration reform and rhetoric might send the wrong message. Michael Vadon

President Donald Trump’s campaign promised sweeping changes to the nation’s immigration system. And with Republicans now controlling both houses of Congress, he’s positioned to deliver.

Depending on how far the immigration pendulum swings, reform could prove a boon to the restaurant industry. If policy changes provide a path to legal status for the nation’s estimated 11 million undocumented immigrants, they could stream into the labor pool, easing pressure for restaurateurs struggling to find talent. Or reform could go so far as deporting millions of the undocumented immigrants, squeezing labor supplies and choking the nation’s food system.

The American Farm Bureau Federation estimates that 50–70 percent of farm laborers are unauthorized. Losing access to undocumented workers would cause agricultural output to fall $30–$60 billion. Domestic fruit production could decline as much as 61 percent, and livestock production could be down by 27 percent. All told, the federation estimates that an enforcement-only approach to immigration will cause food prices to rise as much as 6 percent across the board.

“It would have a dramatic impact on the economy,” says Kristi Boswell, director of congressional relations for the American Farm Bureau Federation. “Every on-farm job has two to three downstream jobs following it. So when you start taking away the farm-level worker, that impacts the downstream, whether it be the packing house, the processing plant, or the restaurant chain.”

Trump’s anti-immigrant rhetoric has immigrants across the U.S. nervous about what’s to come. And the president’s recent executive orders temporarily stopping the nation’s refugee program and restricting immigrants from seven predominantly Muslin nations haven’t helped.

“There’s a lot of anxiety on the ground,” Boswell says. “We see that from the workforce generally.”

Even so, Michael Mabry isn’t anxious at all.

The COO of MOOYAH Burgers, Fries & Shakes says reforms and government regulations constantly reshape the industry. His Texas-based chain boasts 87 restaurants in the U.S. and abroad. He believes concerns about the economic impacts of immigration changes are overhyped. But even if they’re not, restaurants will still compete on a level playing field, he says, regardless of what changes come from Washington.

“Whatever is mandated or whatever reform comes down, we’ll figure it out. We always have and I think we always will,” Mabry says. “It’s not like the restaurant industry is going to go away. There’s a lot of smart guys out there that figure it out, and everyone else follows.”

The National Restaurant Association (NRA) estimates that nearly a quarter of all American restaurant workers are foreign-born. Nearly 2.3 million immigrants work in restaurants. In his first entry-level job in the restaurant industry, Mabry says, he worked elbow-to-elbow alongside plenty of immigrants. He remembers that many had moved here holding college degrees from their home countries. If immigration reform efforts help bring more people into the fold of the legal workforce, Mabry is all for it.

“I think immigration is important to the fabric of who we are as a country, so of course it has a direct effect on this industry,” he says. “But I’m not as worried, actually I don’t have any worry as to what immigration policies are going to do to my business.”

Even with a litany of pledged legislative priorities before him—think sweeping tax cuts, a repeal and replacement of the Affordable Care Act, and deregulation of Wall Street—Trump appears poised to take action on immigration.

"There certainly does seem to be the political will to do immigration reform,” says Shannon Meade, director of labor and workforce policy for the NRA. “But Congress has so many competing priorities before it now. It’s a pretty full Congressional calendar this year."

Meade says comprehensive immigration reform would be good news for the restaurant industry, which, like other employers, has clamored for a better functioning immigration system.

"We obviously are coming from a place in recognition that the immigration system is broken,” she says, “and that it makes economic sense to fix it."

Specifically, the industry would like to see uniformity in the use of E-Verify, the federal government’s free online tool for checking the legal work status of applicants. Many states mandate some or all employers use the federal system, while others do not. In addition to pushing for a national standard, the NRA is also lobbying for legal protection for employers that inadvertently hire ineligible workers even after relying on the government’s work verification process.

And restaurateurs hope immigration reform will help relieve the pent-up demand for guest worker programs, Meade says. While immigrants make up a sizable share of restaurant employees, the NRA has no estimates on how many undocumented people work in the industry.

"The restaurant industry is growing. As the industry grows, there’s going to be a need for workers. For a lot of them, the temporary worker issue is a big issue,” Meade says. “You need people to fill these roles. Every year, you see these temporary worker visa programs fill up quickly ... And it's not just restaurants. Its hotel, lodging, and other hospitality employers. There is a real need for this year-round temporary worker program."

Yet for all the optimism in the industry, there is worry that Trump’s immigration reform and rhetoric might send the wrong message. On January 27, the president penned an executive order temporarily suspending the nation’s refugee program and banning immigration to the U.S. from seven predominantly Muslin countries. In the following week, the Global Business Travel Association reported, airlines lost $185 million in business travel bookings. The restaurant industry is similarly concerned that immigration policy could dampen tourism spending here.

The travel ban has been temporarily blocked by the courts—most recently, a federal appeals court unanimously refused to reinstate the ban on February 9. The NRA responded the same day with a statement from executive vice president Cicely Simpson, who says the association has always advocated for stronger border security and enforcement measures. But she cautions that such concerns should be balanced against the economic benefits of travel and tourism.

“Travel and tourism from foreign visitors plays a vital role in our economy, especially in growing the restaurant industry,” Simpson’s statement reads. “As the Trump Administration continues to work toward the difficult and important task of securing our borders and reforming our immigration system, we strongly urge them to consider the negative impacts any Executive Order may have on American small businesses.” 

Immigrants working in the restaurant industry

  • Restaurants have a higher concentration of foreign-born workers than the overall U.S. economy. More than 23 percent of individuals employed at restaurants are foreign-born, versus 18.5 percent for the overall economy. 
  • A full 43 percent of restaurant chefs are foreign-born, as are 25 percent of restaurant managers. 
  • Immigrants are more likely to be business owners in the restaurant industry. Some 29 percent of businesses in the combined restaurant/hotel sector are immigrant-owned, compared to just 14 percent of all U.S. firms.

Source: National Restaurant Association

Comments

The U.S. currently has eleven non immigrant guest worker visa programs.
http://travel.state.gov/content/visas/english/employment/temporary.html

There is no cap on the number of workers allowed into the U.S. under the H-2A temporary agricultural guest worker visa program.

http://thehill.com/homenews/senate/263529-funding-deal-hits-backlash-ove...
"The provision could more than triple the number of H-2B visas for foreign workers seeking jobs at hotels, theme parks, ski resorts, golf courses, landscaping businesses, restaurants and bars. The move is intended to boost the supply of non-agricultural seasonal workers."

http://www.uscis.gov/sites/default/files/USCIS/Resources/Resources%20for...

Alabama had to bite the bullet and hire LEGAL Immigrants for its AG Industry:

http://www.bloomberg.com/news/articles/2012-09-24/africans-relocate-to-a...
Africans Relocate to Alabama to Fill Jobs After Immigration Law

"East Coast began calling Atlanta refugee agencies several months ago looking for legal immigrants to come to Alabama for a year, said Mbanfu, refugee employment director for Lutheran Services in Atlanta. He said the company would have taken as many refugees as he could refer. The agency connected East Coast with refugees who had been in the country three to five years, he said."

http://usatoday30.usatoday.com/money/workplace/2009-09-13-plants_N.htm
Immigration raids yield jobs for legal workers

'When federal agents descended on six meatpacking plants owned by Swift & Co. in December 2006, they rounded up nearly 1,300 suspected illegal immigrants that made up about 10% of the labor force at the plants.

But the raids by Immigration and Customs Enforcement (ICE) agents did not cripple the company or the plants. In fact, they were back up and running at full staff within months by replacing those removed with a significant number of native-born Americans, according to a report by the Center for Immigration Studies (CIS).

"Whenever there's an immigration raid, you find white, black and legal immigrant labor lining up to do those jobs that Americans will supposedly not do," said Swain, who teaches law and political science."

An Atlantic Monthly article that shows that most economists' thinking that an increased influx of immigrants provides more jobs for Americans is FALSE and does harm jobs for US workers and the economy:

http://www.theatlantic.com/business/archive/2015/01/does-immigration-har...

http://query.nytimes.com/gst/fullpage.html?res=990DEFDC1430F934A15750C0A...

http://krugman.blogs.nytimes.com/2006/03/27/notes-on-immigration/
The Conscience Of A Liberal--Paul Krugman

"First, the benefits of immigration to the population already here are small."
" But as Mr. Hanson explains in his paper, reasonable calculations suggest that we’re talking about very small numbers, perhaps as little as 0.1 percent of GDP.

"My second negative point is that immigration reduces the wages of domestic workers who compete with immigrants. That’s just supply and demand...

"Finally, the fiscal burden of low-wage immigrants is also pretty clear. "

Also, it is patently untrue that "immigrants" are the solution to low rate of start-ups:

http://smallbiztrends.com/2015/01/immigration-reform-declining-start-rat...

Most of the kitchens in the Seattle area are manned by almost all Hispanics from Mexico. We do employee files on all of them so they have some form of id in a legal sense. If we lost some of them there would be the inability to produce food. Other people who are non-Hispanic do not take these jobs. They either take service jobs in the FOH or they are working in other industries. I believe this is true in both Oregon and California as well. I think before we start threatening this group of people we ought to consider some of the consequences.

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