After a contentious battle in 2016, the 2020 presidential election was already set to be a tense affair. But in the midst of the COVID-19 pandemic, the stakes have risen even higher in the race between President Donald Trump and former vice president Joe Biden. Embittered by a fraught national pandemic response, social justice issues, Great Depression–level unemployment, and a volatile economy, Americans will choose not only which candidate they want to sit in the Oval Office, but also which candidate they think will be able to steer the ship through this unprecedented global disaster.
Because the pandemic hit foodservice especially hard, the outcome of this election will be particularly important for restaurants, as the president’s agenda will help guide the industry through recovery. Here’s how each of the presidential candidates’ platforms stack up on the key issues facing restaurant leaders over the next few years.
Perhaps nothing is so pivotal to a restaurant’s success as its employees, so it’s fitting that presidential candidates’ labor policies are a top-of-mind concern. Predictably, Trump and Biden’s platforms on employee-employer relations vary widely.
Notably, Biden has emerged as a pro-employee candidate and has won the support of key labor unions in the 2020 election. Not only did he pledge to encourage unionization, but he also plans to extend benefits for workers displaced by the pandemic and require employers to provide up to seven days’ leave for family, safety, and illness, including for COVID-19.
However, Biden’s support for raising the national minimum wage to $15 per hour for all workers and eliminating the tipped minimum hourly wage of $2.13 is perhaps the most impactful change his platform would have on the restaurant industry. Proponents of the policy, such as One Fair Wage, a non-profit group that lobbies for equal pay for tipped workers, have lauded Biden’s plan, stating that a $15 minimum wage would help these employees make enough to support themselves and their families, particularly as tipping rates have fallen during the pandemic.
But while a massive increase in the minimum wage is likely to draw support from hourly frontline workers across the industry, critics of the move—such as the National Restaurant Association, which has argued against such an increase for several years—posit that it would be too burdensome for restaurants already operating on thin margins and might ultimately cost restaurant workers their jobs as managers slash payroll hours to make up for the costs.
Biden has also given support to “fair and flexible” scheduling, which would require restaurants to give employees more predictable shifts. He has also called for a return to the Obama Era Department of Labor rule, which increased access to overtime payments. While the overtime rule was lauded as a boon for workers, it ignited fiery criticisms from the business community.
Trump, however, has been seen as a pro-business candidate and has spent much of his term rolling back protections put in place during the Obama administration, including scaling down the overtime rule and canceling restrictions on how employers could distribute tips.
Surprisingly, in 2019, Trump said that he was considering the call for a $15 minimum wage, but so far in this election cycle, it hasn’t surfaced as a major issue for the president. While he did note that many low-income workers’ wages were rising in his 2020 State of the Union address, a study by the National Employment Law Project found that most of these increases were driven by state minimum wage increases rather than a federal policy.
Considering the fact that the Republican Party didn’t change its platform from 2016, it is almost certain that Trump would more often take the side of the business community rather than that of employees if reelected.
Given Trump’s stance on employee relations, it comes as no surprise that his tax policies are also pro-business. During the 2016 election, one of his key platform issues was cutting taxes for businesses—something the president accomplished with his 2018 tax reform plan.
Under the plan, the biggest companies, including large restaurant chains, benefitted from sharp reductions in tax rates, with the top rates falling from 35 percent to 21 percent. Many of those restaurant chains that benefited from the tax breaks reinvested the money in their businesses. For some, like Starbucks, this freed up cash to increase pay for employees and issue company stock.
Meanwhile, smaller companies also saw modest rate reductions, and “pass-through” entities, which the Tax Foundation says make up 90 percent of U.S. businesses, received a 20 percent deduction on qualified business expenses.
Though Trump had promised tax cuts would help individuals, too, Investopedia reports that many individuals actually saw higher tax rates or smaller refunds, particularly among lower- and middle-income individuals.
Biden’s plan, on the other hand, would increase the tax burden for corporations and high-income earners to generate an additional $3.3–$3.7 trillion in federal tax revenue over the next decade if it were implemented in 2021, reports The Motley Fool.
This would largely be accomplished by instituting a minimum tax of 15 percent on companies with $100 million or more in annual net income that typically pay little federal income tax. This would close loopholes in which Trump’s 2018 tax reform plan allowed massive corporations like Amazon to pay $0 in taxes. Additionally, the top marginal tax bracket would raise from 37 percent back to its pre-Trump administration 39.6 percent, and a payroll tax would be reinstituted on the top 1 percent of earners.
While most of these moves impact the biggest restaurant chains and their leaders, Biden’s tax plan would also phase out small business deductions over $400,000.
Building on one of the key issues in the Democratic primaries, Biden’s campaign has embraced access to healthcare as a pivotal point of his platform. His plan is to support and expand the Affordable Care Act (ACA), signed into law by President Barack Obama in 2010. Biden’s plan would allow Americans to choose between private health coverage or a public option, such as Medicare, while providing tax credits aimed at helping middle class families by reducing the cost of healthcare plans dependent on income.
Trump, however, has been an outspoken critic of the ACA and attempted to repeal it during his term. Though the repeal ultimately failed, Trump has ended some of the ACA’s key policies, such as subsidies to help low-income Americans purchase insurance and the individual mandate, which required that all Americans have some form of insurance or pay a penalty on taxes. Additionally, the 2017 Tax Cuts and Jobs Act signed into law by Trump repealed the ACA mandate that fined large companies that do not provide qualified health insurance plans for employees, generating significant savings for large restaurant chains.
Among all the issues where the Democratic and Republican platforms differ, immigration is perhaps the topic where their policies most diverge, and it will serve as a crucial differentiator between the candidates for restaurant leaders.
Famous for his strict, zero-tolerance immigration policies, Trump is unlikely to change tack in a second term. If re-elected, the president is likely to continue using a national emergency declaration to grant wider powers for border control and the construction of a wall along the border with Mexico.
Additionally, in June, Trump suspended new H-1B and other temporary work visas that big companies frequently use to attract skilled workers from other countries through December, and he also extended a freeze on green cards for new immigrants—both moves made in response to COVID-19.
However, the next phase of his immigration plan is likely to be the rollout of a merit-based system. In July, Trump announced an immigration act would be forthcoming, and though the details had not been released as of August, the move is expected to remove 4 million people from immigration waiting lists.
While Trump has argued that his efforts will help “protect American communities and American jobs,” critics have argued that tough immigration stances could hurt the restaurant industry, which relies on immigrants to fill jobs. In 2017, the Chicago Council on Global Affairs estimated that while immigrants make up only 13.5 percent of the population of the U.S., 37 percent of all restaurant owners and 22 percent of restaurant workers are immigrants.
Opinions on the right way to handle immigration for the nation and for the restaurant industry vary. Celebrity chefs such as José Andrés and Rick Bayless have been outspoken in their criticism of Trump’s immigration policies, even closing the doors of their restaurants for the national Day Without Immigrants protest in 2017.
Meanwhile, Biden’s stance serves largely as a reversal of Trump’s, and in some cases, as a return to Obama-era policies. He promised to rescind Trump Administration policies limiting immigration within his first 100 days in office. He has also pledged support for the Deferred Action for Childhood Arrivals (DACA), Deferred Action for Parents of Americans (DAPA), and Central American Minors programs and promised to build a White House task force to support immigrants. Biden also plans to end the national emergency declaration that Trump has used to fund a border wall and end workplace immigration raids, and will focus enforcement efforts on safety and security threats. He also plans to work with Congress to create a path to citizenship for immigrants.
When Americans imagined this year’s election, no one could have predicted that voters would elect a president in the midst of a global pandemic. But 2020 has been a year of surprises, and voters will have to weigh not only which candidate’s vision most closely aligns with personal beliefs and business objectives, but also which candidate they believe can help the industry rebuild toward a brighter future.