Report: Hospitality Sector Struggles to Stay Open for Business in Midwest Amidst Stalled Reforms, Immigration Crackdown

August 24, 2017

Midwest leisure and hospitality, a sector responsible for 10 percent of jobs across the 12-state region, relies on immigrants to fill entry-level positions passed up by increasingly educated and aging U.S.-born workers, according to a new analysis by the Chicago Council on Global Affairs.  Against the backdrop of restrictive immigration policies and workplace raids championed by the Trump administration, the report instead calls for immigration policy changes that can keep regional restaurants and hotels open for business.

“A thriving Midwest economy depends on a robust hospitality sector, which directly depends on an updated, expanded immigration system,” said Sara McElmurry, author of the report and assistant director of immigration at the Chicago Council on Global Affairs. “Immigrants are already playing an outsized role in this critical sector, yet our immigration system doesn’t reflect—or foster—their contributions.”

Just 13 percent of the U.S. population, immigrants make up 31 percent of workers in the hotel and lodging industry and 22 percent of workers in the food service industry. In addition, immigrant entrepreneurs are building businesses and creating jobs. These entrepreneurs make up 43 percent of owners of small hotels and motels, and 37 percent of all small business restaurant owners.

With limited visas to hire foreign-born hospitality workers legally, an estimated 1.3 million in the sector are undocumented. The reality makes these workers—and their employers—vulnerable as Immigration and Customs Enforcement ramps up workplace raids seeking undocumented immigrants. It also has economic consequences, as mass deportation could cost the Midwest economy $6.4 billion in lost GDP.

As the federal government proposes significant cuts to the flow of legal immigrants and cracks down on undocumented workers, the report offers policy proposals to sustain and maximize their vital contributions to the hospitality sector. Recommendations were informed by numerous industry stakeholders across the Midwest region and include:

  1. Build government capacity to accurately assess labor market needs—and expand and tailor visa channels to meet demand.
  2. Provide a pathway to legal employment status for current undocumented hospitality workers.
  3. Build a simple, consistent, and reliable employment verification system.
  4. Create federal support for immigrant entrepreneurs.
     

This report is part of a series of papers produced by the Chicago Council on Global Affairs that examine the contributions of immigrants in the industries that power the Midwestern economy, including agriculture and healthcare. Each report includes policy recommendations, tailored to the needs of the Midwest, to maximize immigrants’ contributions to industry workforces.

The Chicago Council on Global Affairs’ immigration studies are supported by the John D. and Catherine T. MacArthur Foundation.

For access to the industry analysis and all case studies, view the report online