Dire report from restaurant group shows 8 in 10 workers idled and billions lost
The National Restaurant Association is asking Congress for $240 million in relief.
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More than eight in 10 restaurant employees in Pennsylvania — at least 332,000 people — have been laid off or furloughed since the beginning of March, according to the National Restaurant Association, which on Monday asked Congress for $240 billion in federal assistance to rescue the industry from the impact of the coronavirus pandemic.
The human and financial toll enumerated in the NRA’s report, sent to congressional leaders, is stunning in its breadth:
Ninety-six percent of Pennsylvania’s restaurateurs say they have idled employees, and 11% expect to shed more workers in the next 30 days. Figures for New Jersey are similar, with 97% of restaurateurs saying they have laid off workers, though 42% of restaurateurs expect to dismiss additional employees.
Nationally, more than eight million restaurant employees, or about two-thirds of the restaurant workforce, have been idled. Four in 10 restaurants have closed, some for good, as $30 billion in March sales and a projected $50 billion in April sales are lost, the NRA said.
About half of Pennsylvania’s restaurants are open, but only for takeout and delivery. (It’s a pivot that is easier for some restaurants, though a few destination restaurants are gradually reopening with empty bars and dining rooms.)
A national survey of 6,500 restaurant owners, which the NRA conducted from April 10 to 16, found that 60% say the federal emergency measures won’t help them keep employees on their payrolls.
1% of Pennsylvania operators say they have permanently closed their restaurants since the beginning of the coronavirus outbreak, and 3% expect to permanently close within the next 30 days.
“Assuming a gradual reopening of the economy in June 2020, we forecast sustained losses of $240 billion for restaurants by the end of the year,” the NRA said in a letter to lawmakers.
The NRA says the federal government’s Paycheck Protection Program to help small businesses, itself valued at $350 billion, is too limited for most restaurants because it lasts only eight weeks and requires businesses to spend at least 75% of the loan on salaries. The round of PPP money was exhausted quickly, though a move to offer additional relief is in the works.
The NRA asked Congress for a relief plan called the Restaurant and Foodservice Industry Recovery Fund, which it valued at $240 billion. The fund would compensate restaurants for government-ordered closures and give them the capital needed to reopen and to rehire workers.
Under the proposal, a restaurant that lost at least 25% in sales could apply to the account, which would be administered by the Treasury Department. Under the plan, Congress would revise the PPP’s loan-forgiveness requirements; provide tax credits or grants to help restaurants modify their facilities to accommodate continued social distancing; enhance sanitization and employee education, and expand use of personal protection equipment and disposable products; and provide federal help for an employer’s share of unemployment insurance.
“It’s kind of what I have been hearing on the ground, but to see it in numbers is frightening,” said Ben Fileccia, director of operations and strategy for the Pennsylvania Restaurant and Lodging Association, the state’s representative in the association. “Everybody knows the industry is in dire straits, but as I see reports like this come in, it’s going to hit home" and gain traction among political leaders.