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Hospitality industry needs more immigrant workers to survive, report says

As the Chicago hotel and restaurant scene booms, so, too, does the scramble for workers, and some businesses say they need more immigration, not less, to meet their labor needs.

Those were among the sentiments captured in a new report from the Chicago Council on Global Affairs that analyzed the hospitality industry's reliance on immigrant labor across the Midwest, which comes as the Trump administration moves to reduce immigration.

With hospitality job growth expected to continue and the region's U.S.-born population graying, shrinking and opting for higher-skill jobs, the report says the sector needs access to an immigrant workforce to keep the doors open.

Leisure and hospitality jobs, which account for nearly 10 percent of employment in Illinois and across the Midwest, are disproportionately filled by immigrants, who not only wash dishes and clean hotel rooms but also launch small businesses that create more jobs, according to the report, released Thursday and the last in a series.

Immigrants, who make up 13 percent of the U.S. population, account for 31 percent of hotel workers and 22 percent of food service workers, according to the report. Immigrant entrepreneurs comprise 43 percent of owners of small hotels and motels and 37 percent of small restaurant owners.

But about 1.3 million hospitality workers across the country work without legal authorization. Twenty percent of the nation's cooks and 28 percent of its dishwashers are here illegally, the report says.

Report author Sara McElmurry, assistant director of immigration at the think tank, spent two years interviewing several dozen restaurant and hotel owners and managers, labor organizers and trade associations across the Midwest to understand the industry's labor concerns in the region.

The consensus is that "we need reforms that responsibly expand the immigration system to hire more of these workers," McElmurry said. In addition, she said, "what I heard consistently was let's build some sort of pathway that allows workers to adjust their legal status."

The White House and some Republican lawmakers have taken the opposite stance, saying immigration, particularly for low-skill jobs, hurts American workers who must compete.

President Donald Trump, whose toughened immigration enforcement policies have raised fears among some hospitality businesses that they could be subject to workplace raids, this month endorsed proposed legislation that would reduce legal immigration by 50 percent by giving priority to highly skilled, educated and English-speaking immigrants, and deprioritizing extended family members of current legal residents. It did not address what to do with immigrants already in the country who are here illegally.

But some of the toughest jobs to fill are low-wage, low-skill hospitality jobs, according to the council's report, especially in areas like Chicago with an exploding food scene.

"In Chicago it is so competitive, there are so many restaurants, it is difficult to get staff and good staff," said Billy Lawless Sr., whose family owns the Gage, the Dawson and several other popular restaurants in the city.

Lawless, himself an immigrant from Ireland and an advocate of immigration reform, said it has always been difficult to find dishwashers and table bussers, but now the labor crunch is across the board.

"Of course we'd like to employ citizens, absolutely, why wouldn't we," said Lawless, who estimates at least 30 percent of his staff are immigrants, most of whom earn more than minimum wage. "They just won't apply to the menial jobs."

But Dave Gorak, executive director of the Midwest Coalition to Reduce Immigration, said the notion Americans won't do the work is a "falsehood" because many already do.

"The availability of cheap foreign labor, especially the illegal variety, is preferred because employers know it serves to hold down labor costs," said Gorak, whose group is based in La Valle, Wis. "Without this plentiful source of workers, these employers would be forced to make a greater effort to recruit Americans and raise wages."

To be sure, there are areas of Chicago with high rates of unemployment and the city talks often about a crisis of youth joblessness that plagues parts of the South and West sides.

But while there are pipeline programs to help employ people with barriers, such as criminal records or bouts with homelessness, report author McElmurry said they have found "varying rates of success."

"A lot of employers have told me the most consistent source of workers has been immigrant labor," she said.

Immigration is particularly important to the Midwest, where the population is not only aging into retirement but also growing more slowly than the rest of the nation and losing people of prime working age, McElmurry said.

The industry also has felt squeezed as teens and young adults who used to take entry-level hospitality jobs prioritize other activities, like internships or summer school, and gravitate toward jobs that give them benefits and holidays off, her report said.

Teens made up 17.4 percent of the restaurant workforce in 2016, up from 16 percent in 2010 but still down from 21 percent in 2007, according to the National Restaurant Association.

Low pay and physically demanding work also make it difficult to fill certain jobs with U.S.-born workers who have other options. In the Chicago metro area, the mean wage for housekeepers is $12.81 an hour, or $26,650 a year, according to the Bureau of Labor Statistics. For dishwashers, the mean wage in the area is $10.88, or $22,620 a year.

Mario Garcia, who until last year worked as a weekend manager at a suburban Best Western, said nearly all of the workers he hired at the hotel were immigrants because they accepted low pay for difficult jobs without complaint. Most earned minimum wage, which in Illinois currently is $8.25 an hour.

Americans who applied usually were hired to work the front desk, where their language skills were most useful. They didn't want the physically punishing jobs like housekeeping once they learned the wage, he said.

Hiring immigrants became "a cycle," he said, because it was easier for the Spanish-speaking supervisors to train new workers in their language. Sometimes it was positive, because they could communicate with international guests. But the language barrier also prevented some workers from advocating for themselves, such as when years went by without a raise, he said.

While critical to the industry, immigrant workers are vulnerable to exploitation, Garcia said. They work hard without complaint for fear of a reduction in their hours or of being replaced by another willing applicant.

Garcia said he didn't think the hotel wanted to make wages more appealing because it counted on saving money on its workforce so it could invest in hotel renovations.

McElmurry said the industry needs to take a holistic approach to its labor challenges and address low wages, demanding or unsafe working conditions and high worker turnover in addition to immigration reform.

The report offers several policy recommendations to benefit workers and employers, including streamlining the tangle of worker visas that allow people to work in the U.S. seasonally or temporarily if they are transferred from abroad or are in training.

Other recommendations include providing a pathway for immigrants in the U.S. illegally to become legal and, subsequently, a mandatory system for employers to verify the legal status of their new hires.

The report also recommends Congress create a permanent visa channel for foreign-born entrepreneurs, who drive many dining innovations.

Despite the federal gridlock over immigration, Illinois and Chicago were highlighted for creating environments where immigrants can flourish.

In Chicago, the $30 million Hatchery incubator for food and beverage entrepreneurs is being built in collaboration in part with Accion Chicago, which serves immigrants. The city also partnered with area universities to launch a Global Entrepreneurship in Residence Program to sponsor entrepreneurs with H-1B visas, and it is creating municipal identification cards for people living here illegally.

Illinois, meanwhile, is the only state in the Midwest that extends driving privileges to immigrants in the U.S. illegally, helping them get to work. And Gov. Bruce Rauner has said he plans to sign the Trust Act, which would prohibit state and local police from arresting or detaining people solely because of their immigration status.

Sam Toia, president and CEO of the Illinois Restaurant Association, said in an emailed statement that the report "definitely drives the conversation forward with pragmatic immigration reform policy recommendations that will help the Midwest's hospitality industries thrive."

aelejalderuiz@chicagotribune.com

Twitter @alexiaer

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