Jan 15 2021

Beyer, Blumenauer Release New Report on Why More Relief for Restaurants and Restaurant Workers Is Needed

One-fourth of the 10 million U.S. jobs lost since the beginning of the pandemic have been restaurant jobs.

Washington, D.C.—Today, Congressman Don Beyer (D-VA), Vice Chair of the U.S. Congress Joint Economic Committee during the 116th Congress, and Congressman Earl Blumenauer (D-OR), sponsor of key restaurant relief legislation, released a new report on the impact of the coronavirus on the restaurant industry—one of the industries hardest hit by the pandemic—and why more relief for restaurants and restaurant workers is needed.

Since the beginning of the pandemic, one in four (2.5 million) of the 10 million U.S. jobs lost have been restaurant jobs, including 372,000 jobs lost last month alone. In addition, one in six restaurants (more than 110,000) have closed permanently or long term. The economic impact disproportionally has hit owners of small independently owned restaurants, especially immigrants, as well as Latino and female workers, who are overrepresented in restaurant industry jobs.

The reason the restaurant industry is struggling is simple: Americans fear the coronavirus and indoor dining is one of the easiest ways to contract it. Consequently, there has been a drastic decline in demand for indoor dining, as well as orders by state and local governments to limit or even ban it. Many restaurants, nearly two-thirds of which are small businesses, lack the cash reserves and credit access needed to survive this type of months-long loss of revenue.

From Congressman Beyer:

“Congress needs to provide robust relief to the restaurant industry and its workers until the pandemic is over. Without it, tens of thousands of restaurants, many of them small family-owned businesses, will have to close, and hundreds of thousands of restaurant workers, many of them women and people of color, will not be able to make ends meet. This is why I am a proud co-sponsor of Congressman Blumenauer’s RESTAURANTS Act. If Congress wants to ensure that the coronavirus does not lead to the collapse of the restaurant industry—neighborhood delis, pizzerias and cafes in particular, it should pass this legislation. As President-elect Biden said last night during a speech about his economic relief plan, in order to fully rebuild and recover, relief has to target Main Street—not Wall Street.”

From Congressman Blumenauer:

“Time is running out for local, independent restaurants. The Paycheck Protection Program was a short-term lifeline for millions of businesses, but it wasn’t designed for restaurants, who need a tailored long-term solution like the direct cash grants outlined in my RESTAURANTS Act. For these half a million restaurants, diners, coffee shops, and bars to have any fighting chance of staying in business, we need to immediately take up my legislation with the new Congress and the Biden administration.”

While Congress has passed billions of dollars in Paycheck Protection Program (PPP) relief for businesses, many small businesses, particularly small independently owned restaurants, struggled to access these funds. One of the reasons for this is that the financial institutions that administered PPP favored lending to larger businesses that would make them more money in fees, as well as businesses with whom they had preexisting relationships.

If passed, the RESTAURANTS Act would create a $120 billion fund administered by the U.S. Treasury to support small independently owned restaurants (those with 20 or fewer locations). Under the legislation, grants provided to restaurants would be equal to the shortfall in revenue between 2019 and 2020 and could be used to cover payroll, benefits, mortgage, rent, utilities, food, debt obligations to suppliers, and more.

This legislation and other policy solutions—extending unemployment benefits, increasing the Earned Income Tax Credit and investing in Community Development Financial Institutions and Minority Depository Institutions—are discussed in the report.