On November 29th the Federal Trade Commission launched its inquiry into supply chain disruptions. They have ordered retailers including Walmart, Amazon and Kroger to turn over information to help study the causes of high prices and empty shelves – but they have also included, for what I think is the first time, wholesalers and brands including P&G, Tyson and Kraft Heinz. I applaud that for what could be is that they are taking a much more holistic view (versus just looking at one particular industry – such as meat packing) – but there are two groups that I wish were also around the table – smaller manufacturers – who have been devastated along with farmers & ranchers, who are faced with the inability to get their products to market. As we’ve discussed before there are three major issues that we all – and the FTC – need to address: climate change, the labor shortage and transportation. One underlying problem that Business Insider points out is that the US food supply relies heavily on foreign workers.
Here are the facts: Food-related industries historically rely on low-wage immigrant labor and are now facing shortages. That labor pool is also shrinking as foreign-born workers seek opportunities in other industries. If immigration maintained its 2016 levels, the US would have 2 million more people today.
Global supply-chain problems are intrinsically tied to labor issues, but the US food supply chain is facing a particular labor shortage that has deepened over the past five years: foreign-born workers. No question with all the publicity and threats, immigration declined under the presidency of Donald Trump. Given the 75% labor 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. And as a lot of you know very well, a lot of those open jobs are in food-related industries like agriculture, processing, retail, foodservice and other services –that have a history of relying on low-wage immigrant labor, including undocumented workers. Many of these undocumented workers, particularly at restaurants that shut down, says Business Insider, 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 laborers 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 centers, according to Eater, mostly concentrated in back of house roles. For the FTC and the White House to understand and solve these issues they must bring everyone to the table – not just the big guys.