The following is a guest post written by Michelle Korsmo, president and CEO of the National Restaurant Association.
With just days remaining until Nov. 5, the outcome of this election is far from certain, and no poll or pundit can definitively forecast the balance of power post-Election Day. Candidates still working to close with voters would be wise to connect with any of the 1 million restaurants across the country, where our industry’s priorities closely reflect those of our customers. Key pocketbook issues — such as inflation, the economy, the job market, taxes and immigration reform — dominate the concerns of the electorate. These are also the same pressing topics that our board members, a diverse group representing every segment of the restaurant industry, recently brought to the White House.
Like most American households, restaurant owners have felt the squeeze of increased costs — everything from labor to food to equipment has forced restaurants to raise their menu prices. The impact on our bottom line is real. They feel it in decreased sales and fewer customer visits. Despite their craving for a return to normal, 42% of adults say they are not going out to restaurants as often as they would like, while 38% say they are not ordering takeout or delivery from restaurants as often as they would like.
Consumer hesitation is a symptom of the broader uncertainty facing American households and businesses this election season. Policymakers can restore economic confidence by tackling the critical issues that will reinforce the vibrancy of business and a reliable workforce pipeline. These are the top issues that must be addressed:
Immigration policy can no longer be treated as a third rail. Comprehensive immigration reform is not just an economic necessity, it is a moral imperative. Yet, on the campaign trail, it has been reduced to political hyperbole and social media memes.
A growing workforce is necessary to fill essential roles, and without immigrants, business owners struggle to operate at full capacity. Modernizing outdated laws could create greater certainty for employers and employees alike. Candidates must prioritize immigration reform that addresses labor needs and establishes legal pathways for workers. Without it, restaurant operators will continue to face crippling labor shortages that harm not only our industry but the broader economy as well.
Our workforce relies heavily on robust guest worker and seasonal visa programs. While these programs are completely separate from immigration policy, aggressive anti-immigrant rhetoric has handcuffed them together. Progress on guest worker reforms stalled because of broader immigration debates, leaving seasonal industries like ours in a bind. Restaurant operators, particularly in seasonal locations, depend on these workers to meet demand. But without reliable access to these programs, operators are forced to limit their operations, curbing their economic potential and ability to serve their communities. It is vital that lawmakers untangle these two issues and address them separately.
Tax policy is just as critical for the restaurant industry. The Tax Relief for American Families and Workers Act of 2024 is essential to ensuring small businesses can continue to contribute to the local economy and provide jobs for our communities. Because our businesses operate on extremely thin margins, the smallest change in tax provisions can have a significant impact on whether a restaurant keeps its doors open or shuts down.
Business interest deductibility is vital for businesses relying on debt financing to grow, cover operating expenses, and manage cash flow. Without it, the tax burden could increase by as much as 30%, adding pressure on top of rising costs and inflation.
Another key provision is 100% bonus depreciation on equipment purchases, allowing businesses to immediately deduct the cost of capital investments. This is essential in capital-intensive industries like restaurants, where such upfront deductions support cash flow and enable necessary improvements. If these key tax provisions are allowed to expire, then small businesses will face increased financial burdens that will delay growth and job creation.
Our industry is a microcosm of the broader American experience — feeling the same pressures, challenges and hopes for a brighter future. The next administration and Congress must recognize the immense role that restaurants play in our economy and communities.
The policies that support our businesses, from comprehensive immigration reform to sound tax provisions, are vital not just for our survival but for the overall health of the economy. With restored confidence and stability, restaurants can continue to be a source of opportunity, innovation and growth.
