How will the 2020 Presidential Election Impact the Hotel Industry?

As you know, we are in the midst of a presidential election year; wondering who will lead our country into the next four years. Each potential candidate has his own views on things that will impact hotels and the hospitality industry at large. In particular, changes to the minimum wage and to immigration law could have a significant impact on hoteliers and the properties they run.

Changes to Minimum Wage Could Affect Hoteliers

The number one cost in a hotel is staff. Minimum wage laws are of great importance to hotel owners who need dozens of employees in order to run their property. Even a slight increase in minimum wage can have a significant impact on a hotel’s operating cost, therefore, this issue is one for hoteliers to watch in this election year. The federal minimum wage for covered nonexempt employees is $7.25 per hour, but many states have their own minimum wage laws. Employees are entitled to whichever rate is higher.

As of the writing of this article, the candidates still in the running were: Donald Trump (Rep), William Weld (Rep), Joe Biden (Dem) and Bernie Sanders (Dem). Democrats seem to agree that a minimum wage increase is long overdue and that it’s virtually impossible to survive on $7.25 an hour. Both Biden and Sanders want to double the hourly minimum from $7.25 to $15, and then allow it to rise automatically with inflation (as proposed by House Democrats in the Raise the Wage Act). It’s unclear where President Trump stands on this matter as he took contradictory positions on the issue in 2016. He eventually supported an increase to $10 an hour, but hasn’t done anything on this topic since he took office. Also unclear is William Weld’s position on minimum wage.

Changes to Immigration Law Could Affect Hoteliers

Finding workers to fill a hotel’s lower-level positions has become increasingly difficult thanks, in part, to immigration laws that keep workers from coming to the US. Hoteliers around the country are having to get very creative to find workers in today’s tight hotel labor market: massaging benefits, bonuses and pay to try and attract workers into housekeeping, custodial and other lower-level positions.

Brian Crawford, senior vice president of government affairs for the American Hotel & Lodging Association (AH&LA) said the shortage of H-2B visas for low-skilled workers is among the contributing problems the group is lobbying hard to address. The H-2B program, which allows U.S. employers or U.S. agents who meet specific regulatory requirements to bring foreign nationals to the United States to fill temporary nonagricultural jobs, now has a cap of just 66,000 (33,000 allotted for each half of a fiscal year). It’s not nearly enough as evidenced by the 100,000 applications filed by US employers for just the first half of 2020. 

According to an audio recording obtained by The Washington Post at a private event in Oxford, England, Acting White House chief of staff Mick Mulvaney believes the U.S. economy needs more immigrant workers in order to keep growing. “We are desperate—desperate—for more people,” Mulvaney was recorded saying. “We are running out of people to fuel the economic growth that we’ve had in our nation over the last four years. We need more immigrants.

So how will this year’s election impact the already dwindling pool of US hotel staff? The Trump administration wants to have more immigrants come to the U.S. in a “legal fashion,” by using a points-based system similar to those used in Canada and Australia.  Bernie Sanders has specifically called to repeal Section 1325 of Title 8 of the U.S. Code, which makes crossing the border without undergoing an inspection by an immigration officer a misdemeanor offense. Joe Biden, on the other hand, believes the statute should remain in place. Both Democrats back a path to citizenship for Dreamers brought to the U.S. as children.

It remains to be seen who will lead our country into the next four years. The implications of that candidate’s immigration and minimum wage views will be of great concern to those of us in hospitality. For now, all we can do is watch and wait to see how this election plays out and hope for the absolute best outcome.

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