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A restaurateur’s guide to the election

Figuring out the presidential candidates’ potential impact on the industry may be tougher this year, pundits agree. But here are the indications that are known.
Photograph: Shutterstock

President Trump promised voters during the last presidential election that he’d “drain the swamp” and upend longstanding political conventions. Who knew that would extend to traditions that have long helped restaurateurs and their political watchdogs decide which candidate for the Oval Office may be best for the business? Like drafting a party platform. 

Indeed, the Republican Party decided not to compile one this time around, saying its record from the last four years is the best preview of its aims for the next four. But Trump did air his priorities for the industry to restaurateur and fellow reality-TV star Jon Taffer in an installment Thursday of the “Bar Rescue” host’s podcast: A reinstatement of business meal deductibility, measures to get travelers back on airplanes, and a re-up of the Paycheck Protection Program.

The Democrats have been more observant of tradition, setting out a 92-page rundown of what party members intend to do if they win on Nov. 3. Much of the 2020 platform could have been cut-and-pasted from past declarations of the party’s stance on issues of importance to the industry: Raise the federal minimum wage (this time to $15, by 2026), remove curbs on unions’ organizing efforts (remember Card Check?) and mandate more benefits from employers (12 weeks of paid family and sick leave).

Every four years, Restaurant Business delves into the presidential candidates’ positions on matters pertinent to the restaurant industry, an exercise intended to help operators make a more-informed decision at the polls. The task was greatly complicated this year by a plague, the existential threat it poses to restaurants, the chronic deadlock in Congress, and how Trump has recast the political dialogue. Handicapping the prospects for the industry has become far more complicated, as has nudging policy in a favorable direction. 

“The rules of engagement here in Washington are so different because there’s a pandemic,” says Sean Kennedy, EVP of public affairs for the National Restaurant Association and the industry’s de facto chief lobbyist. “We’ve retooled. But every month, every week, we have to recalibrate how we go about our advocacy, and we don’t see that changing anytime soon.”

The association typically does not endorse a presidential candidate, focusing on issues of importance to the industry rather than the parties or individuals. The industry is continuing to weigh in on races through its political-action committee (PAC) funding, but the association’s prime objective has been influencing what comes after the election, before and after the electees are sworn in.

“A restaurant operator has talked to everyone who is running for an office,” says Kennedy. “There are no candidates who are unaware of what is at stake for our community and what the tools are that we need. So they’ll come in knowing the basics of the industry and what it needs to survive.”  

He ventures that every politician running for national office on Tuesday has announced their candidacy at some point in their careers at a local restaurant whose operator (and menu) they know well. “That is our greatest asset,” he says.

Here are the topics that might be discussed as restaurateurs leverage those relationships post-election:

 

 

Fed aid

 

Federal relief for restaurants

Trump told Taffer that he’s fully supportive of renewing the Paycheck Protection Program (PPP) again ASAP, alleging House of Representative Speaker Nancy Pelosi has been the stumbling block. “We’re going to do a very big package, as soon as the election is over,” the president said. “I want one bigger than hers.”

Republicans have pushed back on sweeping aid packages, saying they want something more targeted than the Democrats’ HEROES Act, which includes $130 billion in direct financial relief for restaurants. The most vocal opponent to those expansive measures may be Senate Majority Leader Mitch McConnell. He faces a challenge for re-election on Tuesday from Democrat Amy McGrath, but the latest polls show the veteran lawmaker ahead by about nine points. Still, McConnell’s power would be shorn if the Democrats capture the Senate, as many Beltway watchers predict. Even Trump has acknowledged the difficulty his party faces in holding onto its majority in that chamber.

Without mentioning the PPP, a program developed under auspices of the Department of the Treasury, the Democrats have called for “making significant, immediate grants and loans to help small businesses make payroll, pay rent and other expenses, and keep their doors open when possible,” or essentially the objectives set out in  the PPP.

 

 

Wages

 

Wages and other labor issues

Nowhere are the differences between the parties in starker contrast than in their stances on labor matters.

Democratic presidential candidate Joe Biden has repeatedly voiced support for raising the federal minimum wage to $15 an hour, from a current level of $7.25.  Because a number of cities and states have already raised their minimums to that threshold, the bigger issue may be Biden’s stand on the tip credit, a break for full-service restaurants. Forty-three states allow businesses with servers or other tipped employees to count the workers’ reported gratuities toward the minimum wage they’re due. Biden has indicated that he’d abolish the tip credit nationwide, a move that would significantly raise the labor costs of employers who are using the concession to businesses.

The Republican Party has been mute on the matter.

Ironically, one of the operators who’d feel the pain of disallowing the tip credit would be Donald Trump. Most of his domestic hotels are allowed to take a tip credit for servers and other employees who work for gratuities.

The Democrats are also calling for measures that would facilitate collective bargaining for wages across all industries. “We know that strong American labor unions help increase wages and job standards for workers across the economy, which is why Democrats will prioritize passing the PRO Act”—short for Protecting the Right to Organize Act—"and restoring workers’ rights, including the right to launch secondary boycotts,” its platform states.

Among the measures it pledges to pursue is a restoration of Card Check, a simplified vote for union representation where employees only have to check a box on a card, and not confidentially. Opponents say union proponents could lean on holdouts against collective bargaining because they’ll know how co-workers are voting.

The Democrats said they’d also seek a repeal of so-called right-to-work laws, which spare employees from having to join a union when a majority of co-workers vote to be represented by one.

Trump has proven a bane of unions through his reconstitution of the National Labor Relations Board, the federal watchdog on union organizing. Under President Obama, the board shifted noticeably in a pro-labor direction. Trump changed the makeup.

 

 

Regulation

 

Business regulation

Trump has made good on his assurances to the business community that he would seek to reverse some of the regulations and government curbs they loathe. For the restaurant industry, those concessions have included a softening of the overtime pay requirements for salaried managers; a favorable delineation of when servers should be directly paid a full minimum wage for side work, the so-called 80/20 rule; a preferred definition of when a restaurant franchisor can be regarded in court as a co-employer of a franchisee’s staff; and who can share in tip pools.

Washington watchers say many of those measures could and likely will be overturned if the Democrats should win a majority in the Senate, still an “if” in the minds of Trump and other politicians, and hold their control of the House.

For that reason, some contend the real concern for business should be whether the Senate filibuster is abolished. The parliamentary tactic allows opponents of a bill to talk it to death—to keep a debate alive, so that other business cannot be conducted, until the proponents give up. Filibusters have been known to last for days, with members reading from phone books or using other tricks to wear down their opponents.

Under current Senate rules, a filibuster can only be halted by a two-thirds vote. Election handicappers say the Democrats may win a slim majority in the upper chamber, but not enough to ward off the delay tactic. But if the two-thirds rule could be killed, requiring only a simple majority to end nonstop debate, the floor would be cleared for legislative rollbacks of Trump’s regulatory changes.

 

 

Immigration

 

Immigration

As an industry in dire need of a deeper labor pool, restaurants have not aligned with Trump’s aggressive stance on immigration and limiting incoming traffic. The hospitality business has traditionally favored finding ways for job seekers from abroad to work legally in the U.S., be it through temporary permission or becoming citizens. Just on Thursday, Trump advisor Stephen Miller indicated in an interview that a second Trump administration would likely seek further limits on immigrants legally working in the U.S.

Biden’s party states in its platform, “Democrats believe it is long past time to provide a roadmap to citizenship for the millions of undocumented workers, caregivers, students, and children who are an essential part of our economy and of the fabric of our nation. We will also eliminate unfair barriers to naturalization, reduce application backlogs, and make our immigration processes faster, more efficient, and less costly.”

Biden’s party is also calling for an immediate reversal of Trump’s most controversial immigration measures, including a re-instatement of legal status for immigrants who were brought into the U.S. at a young age, and a discontinuation of separating immigrant children from their parents.

Watch next week for Restaurant Business’ post-election analysis of what the results mean for the industry.

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