Apr 26 2021
The COVID outbreak caused the fastest and one of the deepest economic collapses in modern U.S. history, but the pain has not been spread equally across the economy. The restaurant industry and its workers have been hit especially hard with 2.5 million jobs lost since February—one in four of the 10 million jobs lost in the overall economy. If the economy as a whole had suffered the same level of job losses as the restaurant industry, that would translate into 30 million jobs lost instead of the 10 million it has lost since February. More than 110,000 restaurants—about one in six—have closed permanently or long term. The situation threatens to worsen as new U.S. COVID cases exceed 1.5 million each week.
The reason for this collapse is clear: science has shown that COVID can be spread by tiny particles that are expelled into the air when people talk or even breathe. These aerosols can remain in an enclosed area like a restaurant for a long time. For this reason, indoor dining is an especially risky activity, which has led to a sharp decline in demand for indoor dining by consumers as well as orders by state and local governments to limit or even ban it. The situation is likely to deteriorate this winter as COVID cases surge, Americans fear dining out, state and local regulations increase and weather curtails outdoor dining.
Restaurants are especially vulnerable because they are more likely to be small businesses. Small businesses typically lack the cash reserves and access to credit that larger businesses have, which makes going over a year with only a fraction of normal revenue untenable for many. The collapse in restaurant employment disproportionately affects women and Latinos while immigrant restaurant owners are especially vulnerable. Many small, independently owned restaurants will not survive without further relief. Americans will eventually begin to eat out again, but the question is whether the restaurants they eat in will be owned by large chains or small-business owners.