Immigration crackdown deprives Chicago bakery of a third of its workers following a clampdown in the area on 800 people without sufficient documentation.
As Cloverhill Bakery workers were taken into custody, the company has had to restaff about 35% of its employees. Cloverhill makes baked goods for fast-food chains and supermarkets, and supplies consumables like hamburger buns to ubiquitous chains like McDonald’s Corporation (NYSE:MCD). The bakery is owned by Zurich-based Aryzta AG (VTX:ARYN).
“It’s proceeding very, very slowly because it’s like having a brand new factory and a brand new workforce,” Chief Executive Officer Kevin Toland said on a call with analysts. “That’s presenting a lot of challenges, as you can imagine.”
The most recent raid is one of the most daring manifestations of the federal government’s tough talk on immigration since the inauguration of President Donald Trump.
While President Barack Obama was often criticized for his enforcement of immigration policy and deportations, Trump has put more of an emphasis on cracking down on undocumented people living within the U.S. The result is that the immigration authorities are pursuing illegal immigrants in the U.S. with more zeal. The immigration crackdown is then hurting some businesses.
The Cloverhill raid has led to a seven-percent decline in Aryzta’s sales from North America in the three months through October. The increase in employment costs the company is facing will eventually lead to higher consumer prices, said Toland.
The company also claimed that it was unaware of the status of its workers because they were brought in by a staffing agency. The company, however, was reluctant to name the staffing company.
Overall, this represents another addition to the immigration issue that has taken center stage in this president’s White House.
Trump famously began his campaign for president with incendiary comments about illegal immigrants. He referenced the problem frequently throughout his campaign and also made the building of a border wall a key feature of his platform.
At this point, no construction has begun on the border wall, and neither has it been allocated funds. Trump famously said that Mexico would pay for the wall, but that ambition seems to have fallen through.
Meanwhile, Trump also challenged the Deferred Action for Childhood Arrivals, or DACA, which provides minors who were brought over as young children to the U.S. with a path to citizenship.
While Trump said that he wanted Congress to handle a DACA update—it was a policy undertaken by the Obama administration but never codified into law by Congress—and said he would not have these people targeted, the removal of the program caused a political uproar.
There have been multiple spats over DACA and the future of the 800,000 people that it covers, as well as concerns over a massive drain of workers in several key industries as DACA recipients might be more wary of working due to their now ambiguous status in the U.S. and a potential immigration crackdown.
“Chicago Immigration Raid Leaves Swiss Baker Scrambling to Restaff,” Bloomberg, November 27, 2017.