President Donald Trump’s low-immigration policy is spiking wages for restaurant workers in South Carolina’s Hilton Head resort, just before the November election. An example is Steve Carb, who was forced to raise wages and managed to fill just 900 of the 1,000 open jobs at his 12 restaurants in Hilton Head.
According to The Washington Post, dishwashers now earn $13 an hour instead of the $10 they earned a couple of years ago. Line cooks are paid $15 to $18 an hour, instead of $13 to $15. Additional overtime costs mean tweaking the menu to stay profitable, from switching to smaller shrimp to raising the price of a plate of fish and chips by 30 cents.
“The whole island is a disaster zone right now,” said Carb, president and founder of SERG Restaurant Group. “It’s been a nightmare.”
Carb even closed off lower-performing portions of his restaurants because they did not earn enough revenue to pay prevailing wage costs. That decision suggests the supply, demand, and wages for staff have reached an “equilibrium,” showing roughly equal power between employer and employees.
The Post also reported that tough lobbying by business groups is prompting state legislatures, as well as federal GOP and Democratic politicians, to block popular demands for mandatory use of the federal employment-verification system or E-Verify. The E-Verify system is effective at raising wages for Americans by excluding illegal immigrants.
“If you cut off the labor supply like these laws do, you are going to see employers get desperate when it becomes a lot more difficult to hire, and if businesses are following the law, they have to raise wages,” said Pia Orrenius, senior economist at the Dallas Fed who found that states with universal E-Verify requirements typically saw substantial reductions in the number of unauthorized workers.