Restaurant Industry Expects the Loss of 5 to 7 Million Jobs Due to Coronavirus
The National Restaurant Association is warning that the restaurant industry will suffer between 5 and 7 million lost jobs as a result of the coronavirus pandemic. In a letter addressed to President Donald Trump, Executive Vice President of public affairs Sean Kennedy presented the dire warning, asking for nearly $250 billion in federal aid to combat forced closings of bars, restaurants, and food courts.
Even the most calm and well-reasoned estimates of the economic effects of the global pandemic are disastrous. During a White House press conference on Wednesday, the Trump administration discussed a $1 trillion economic stimulus package designed to provide aid to many industries hit hard by COVID-19.
While airlines, hospitality, and virtually every other industry is feeling the ill-effects from what is effectively a national shutdown, the restaurant industry runs on razor-thin profit margins and relies more on cash flow to stay open than many other businesses.
Since the White House presented a 15-day guideline to contain the coronavirus outbreak which advised restaurants and bars to effectively shut down, restaurant owners have been hit as hard as any small business owner.
"Economically, we are anticipating sales to decline by $225 billion during the next three months, which will prompt the loss of between five and seven million jobs," Kenney writes. "The restaurant industry is one of low margins, tight cash flow, and a workforce that depends on us for their livelihood. Without aggressive and immediate action from the federal government, many restaurants that are a staple of local communities will simply never resume service."
The restaurant industry claimes to employ just over 15 million individuals, so if their estimates are correct, that is anywhere from a 33 to 45 percent decline of employees. Kennedy proceeds to recommend the following prescriptive actions from the federal government to save the Restuarant Industry:
Authorize the Department of Treasury to create a $145 billion Restaurant and Foodservice Industry Recovery Fund.
- $35 billion for Community Development Block Grants for Disaster Relief (CDBGDR) assistance
- Assistance in allowing businesses to defer mortgage, lease and loan obligations.
- $100 billion in Federally-Backed Business Interruption Insurance
- $45 billion in expanded access to effective, efficient and affordable federal and conventional loans.
- $130 Million in Disaster Unemployment Assistance
- Federal Loan Program Equal to Lost Revenue
- Additional tax breaks to help restaurants and bars survive this economic downtime.
Bars and restaurants not only represent important cultural outlets to gather and dine, but they also employ 15 million individuals. If nearly half are unemployed, that means up to seven million people won't have any income to spend on other products either.
They will not likely get all of the aid requested, but they can certainly be forgiven for raising the alarm as to how this will affect their industry and the larger economy as well.