The case for immigration reform

Published in Restaurant Business newsletter

Aslam Khan got started in the restaurant business the way many immigrants do: washing dishes. In 1987, soon after arriving from Pakistan, he got hired by a Church’s Chicken in Los Angeles. After 13 years of working up to cashier, shift manager and ultimately chief operating officer, he bought a franchise himself.

“My mission was to come out of Pakistan and change my life,” recalls Khan, now the brand’s largest franchisee, with 153 units headquartered in Westlake, Texas. The restaurant business, he says, “gave me an opportunity to come over here, create thousands of jobs and contribute back to society.”

For Khan, part of giving back means offering a hand up to new immigrants. So he felt stung on a personal level, not just a business one, when he signed on with the federal government’s E-Verify system, which checks legal eligibility to work in the U.S. Close to 100 of Khan’s employees were flagged for suspect Social Security numbers or other documents. He gave them a chance to correct any errors, but most couldn’t, including several store managers. He had to let them all go. It cost $1 million in recruiting, retraining and sales, he estimates, not counting emotional costs.

“It was people’s livelihoods,” Khan says. “Many of these people had been in our system awhile. They were doing a really good job. It was difficult, but I had no choice. I had to comply with the law.”

At the Gulf Shores Plantation, a resort in Gulf Shores, Ala., a fifth of Pedro Mandoki’s off-season staffers left on their own—even ones who had passed E-Verify—after the state enacted one of the strictest immigration laws in the country. “They just left,” Mandoki says. “They felt they were being harassed. There was so much press about what was going on, they had a feeling of, ‘You’re not welcome.’”

Long a simmering issue for operators, immigration is reaching a boil this year. A divided Congress is wrestling with reform, and restaurant owners are lobbying hard to make it food service-friendly.

Above all, the industry craves certainty, says Rob Green, executive director of the National Council of Chain Restaurants. As states such as Alabama, Arizona and Georgia pass conflicting rules, he says, “a federal approach is much preferable to the patchwork of state laws. It’s important to have certainty in terms of enforcement and expectations.”

In the bigger picture, restaurants want to be certain of two things: finding enough workers and hiring them without fear of workplace crackdowns.

Food service is among the top employers of foreign-born labor, reported the Pew Research Center in January. Immigrants account for 22 percent of the industry’s workers. Without them, say many, restaurants simply couldn’t run.

A critical link

Karen Bremer, executive director of the Georgia Restaurant Association and a former German citizen, points to a sharp drop in U.S. birthrates after 1964. “Nowhere ever, in the history of the world, has an economy expanded with a declining population,” she says. “And we have jobs in our country that Americans choose not to do.”

Don Fox agrees. The CEO of Firehouse Subs points to a new unit in the oil field boomtown of Midland, Texas. The franchisee is paying up to $15 an hour, and still has trouble filling jobs such as prep cooks and dishwashers. “Very often, new people in the workforce, like immigrants, are eager to fill those jobs that natural-born Americans are not always eager to fill,” says Fox, whose 670 units are headquartered in Jacksonville, Fla.

In resorts, where most revenue is crammed into a few months, restaurants depend even more on foreign workers. One is Morey’s Piers, a boardwalk amusement park in Wildwood, N.J. which includes five restaurants. It hires 600 guest workers each summer on short-term J-1 visas that allow them to work three months and travel one.

“It has provided seasonal staffing that we are not able to fill domestically, especially in our shoulder seasons,” says Director of Waterpark Operations and Human Resources Denise Beckson. “Due to the seasonal nature and geographic remoteness of our business location, we are not able to attract a sufficient number of American applicants to successfully operate our business.”

Nonseasonal restaurants have no such options, notes Jay Perron, vice president of government relations for the International Franchise Association. Both high-tech firms and farmers can sponsor foreigners as guest workers. “But because of the way the laws are currently written, there’s no way for low-skilled, low-income workers, who are essential to our industry, to get here,” Perron says.

Of course, 11.7 million illegal immigrants already are here, Pew estimates—and 1.1 million of them work in food service. Undocumented employees make up 12 percent of its workforce, surpassed only by farming, building maintenance and construction. They tend to work disproportionately in the back of the house, where speaking English is less important. Pew calculates that 19 percent of cooks are undocumented, and 28 percent of dishwashers.

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