FROM THE CONSULTANTS By Carl Sacks
Economic Impact of Elections Part 2 – Immigration and the U.S. Labor Market
Editor’s note: This is the second in a series of articles about the current U.S. political climate, and how it may impact the catering industry. See part 1, which explores tariffs, here . T he state of the labor market in the U.S. is broadly positive, though some areas remain problematic. As of the time of preparation of this article, the seasonally adjusted unemployment rate remains only slightly above 4%, a level that many economists have traditionally considered to be full employment. This is down from a peak of over 14% in April 2020, during early COVID-19. However, there is a case to be made that the current tight labor market benefits some categories of workers much more than others, primarily because of the impact of automation. For example, there are some mid-level creative and analytical white-collar jobs that are clearly at risk from AI replacement,
while many manual labor jobs are being done more frequently by machine. However, the catering industry is not likely to directly benefit from automation, since robot servers and captains are not on the horizon. Immigration continues to be a bone of political contention. The big picture perspective is that the U.S. has always been a nation of immigrants. Recent arrivals have traditionally been fuel for economic growth, and discouraging immigrants feels self-defeating on several levels. Despite this, the post- election political climate seems to be focused on limiting additions to an already tight labor market. This will impact caterers in several areas: Primary catering staff Recent immigrants, documented or not, represent a pool of labor that caterers have frequently used for staffing both front and back of
house. This is more pronounced in some areas of the country than others; however, the caterers we have visited with purely native U.S. born staff are clearly in the minority. Regions of the country with large immigrant populations are the most likely to have those ethnicities represented in the local catering personnel pool. While there are no reliable surveys on the number of undocumented staff working for U.S. caterers, it is certainly greater than zero. The percentage of undocumented workers in the hospitality industry is estimated to be in the 7% range, but our guess is that the undocumented percentage in catering is somewhat higher. This is in part because there are so many part-time jobs in catering that are in constant need of temporary staff. The catering industry went through a labor shortage shock during COVID-19, from which it has mostly recovered. However, if there is a substantial ICE crackdown on immigrants, this could limit the
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SUMMER 2025 ■ CATERSOURCE
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