US food supply chains rely heavily on foreign workers; now those industries suffer the worst labour shortages

Business Insider US
Farm workers harvest zucchini on the Sam Accursio & Son's Farm on April 01, 2020 in Florida City, Florida.
Joe Raedle/Getty Images
  • If immigration maintained its 2016 levels, the US would have 2 million more people today.
  • Food-related industries historically rely on low-wage immigrant labour and are now facing shortages.
  • That labour pool is also shrinking as foreign-born workers seek opportunities in other industries.
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With Thanksgiving less than a week away, inflation continues to make headlines for driving up food prices, both at grocery stores and in restaurants.

A major factor behind those increases is the cost of labor, where companies' struggles to find and retain staff are having ripple effects from farm to table.

Global supply-chain problems are intrinsically tied to labour issues, but the US food supply chain is facing a particular labour shortage that has deepened over the past five years: foreign-born workers.

Had US immigration levels maintained their pre-2016 trajectory, the US would have roughly 2 million more people today, analysts at both JPMorgan and Grant Thornton estimate.

Although immigration declined under the presidency of Donald Trump, neither he nor his policies were solely responsible for all of it. Even so, the rhetoric and political climate of those years likely contributed to the shortfall employers currently face.

Given the 75% labour force participation rate of foreign-born residents, that works out to 1.5 million fewer workers available to fill the 10 million open jobs in the economy right now.

A lot of those open jobs are in food-related industries like agriculture, processing, and service – industries that have a history of relying on low-wage immigrant labour, including undocumented workers. 

Now that strategy has led to a precarious position.

Restaurants, like farming and processing jobs, tend to offer low pay and poor conditions in many cases, and high turnover means there are almost always jobs available.

These same industries were hit hard by Covid-19 in the early days of the pandemic. Many undocumented workers, particularly at restaurants that shut down, lost their jobs, while those who continued working were in frontline positions where they were more likely to be infected, such as in meat-processing plants with documented large outbreaks.

A US Department of Agriculture study found that as many as half of hired labourers in crop agriculture did not have the immigration status needed to work legally in the US. Undocumented workers make up about 10% of the restaurant industry, and as much as 40% in some urban centres, according to Eater, mostly concentrated in back of house roles. 

Immigrants without authorisation typically take these jobs because they have the fewest options, Daniel Costa, the director of immigration law and policy research at the Economic Policy Institute, told Insider.

These workers are attractive to employers who are willing to take the risk of potential legal action, because unauthorised workers have "virtually no labour rights in practice," Costa said. They are unlikely to report their employers for poor workplace conditions and pay – or even illegal actions – because of repercussions they could face.

Line cooks were the single profession most at risk of dying from Covid-19, according to a study from UC San Francisco, followed by machine operators, agricultural workers, and construction workers.

"These are rough, dirty jobs that are physically dangerous and often demeaning," said Nathan Dollar, a doctoral researcher at the University of North Carolina who studies agriculture workers.

In addition to less immigration to the US, Dollar explained that agricultural businesses' labour challenges are also tightening as foreign-born workers tap into better opportunities, like entrepreneurship.

Restaurant workers meanwhile have been leaving those jobs for better pay and conditions in the warehousing and logistics industry.

With a shrinking foreign-born labour pool and growing opportunities in other industries, Dollar says immigrant workers are less willing to work under demeaning or dangerous conditions for low pay.

"You're seeing a new labour movement spawning, and I think that's probably why people are not willing to work for these low wages," he said.

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