Is Restaurants Act on menu for COVID relief?
‘It’s a bloodbath, and it’s getting worse’ as restaurants, bars across country face a dreadful winter in pandemic
Chicago’s Frontera Grill sits empty last month. As chef Rick Bayless stated on Facebook: “I really, really miss seeing guests in here.” (Galdones Photography)
By Ted Cox
“It’s a bloodbath,” said Casey Cora, “and it’s getting worse.”
The spokesman for Chicago’s Frontera restaurants was referring to the hospitality industry as it heads into what looks to be a dark and dreadful winter in the pandemic — unable to serve diners inside, and with outdoor dining increasingly unpleasant.
“Even those chefs and restaurants who are in a better position, with enough staff to pivot and think of creative things to do, you still have 100 percent of your fixed costs, while maybe bringing in 50 percent of your revenue — if you’re lucky,” Cora said. “So the question is, how long can you sustain that? And the answer there is not very long, because every day — or what seems like every hour — there are restaurants big and small going out of business and permanently closing, in Chicago and beyond.”
That’s why the Restaurants Act has been in the spotlight this week as talks revive in Congress to pass another COVID-19 relief package. A bipartisan, bicameral group of legislators has tried to generate support for a $908 billion program — not the ambitious HEROES Act that passed the House in May, or even the smaller relief package passed by the House in October, but something to get desperate workers and businesses some sort of aid as they try to stay afloat while vaccines are approved and distributed.
According to Cora, the Paycheck Protection Program helped at first in the spring as stay-at-home orders robbed restaurants and bars of their business, including chef Rick Bayless’s Chicago restaurant group, comprising Frontera Grill, Topolobampo, Xoco, and others. “We used that to pay our people, which was really a boom to our staff,” he said, but it didn’t cover rent or mortgages or payments to vendors and other obligations. Besides, Cora added, “That money’s all gone, and it’s only gotten worse since then.”
In fact, just this week news stories pointed out that a third of the funding under that program went in large $1 million chunks to major firms, not the individual restaurants and saloons that really needed it. Typical was the Potbelly chain, shamed into returning $10 million in PPP funding, only to return for a second helping later in the summer as the program was extended to reclaim the same amount all over again.
As introduced in June by U.S. Rep. Earl Blumenauer, the Restaurants Act would allocate $120 billion to “the nation’s 500,000 independent restaurants — which account for three-quarters of the restaurants and bars in the United States — and their 11 million workers.” One of its key provisions is to allot federal grants to make up the difference between a business’s 2019 revenue and projected 2020 revenue. When it passed the House in October as part of the revised HEROES Act, Bluemenauer touted that the bill “gives priority to minority- and women-owned and -operated establishments. Unlike previous federal relief packages, this aid would only be available to food-service or drinking establishments with fewer than 20 locations that are not publicly traded.”
The question is, how much of that $120 billion proposal will make it into that $908 billion COVID-19 relief package, even if it does pass pass both houses of Congress and get signed into law?
Cora praised the support of Illinois Sens. Dick Durbin and Tammy Duckworth, as well as Rep. Mike Quigley of Chicago. Durbin recently touted the act on MSNBC, and just this week Gov. Pritzker called for any new COVID relief package to include the act.
But one of the problems, Cora pointed out, is that independent restaurants and bars are, by definition, independent. The National Restaurant Association “for the most part represents chains,” leaving “hundreds of thousands independent restaurants, that never really had a voice in Washington, trying to find their way through this process and stumble through it and figure out how to organize and have their voices heard.”
Bayless has been one of the leading faces of the Independent Restaurant Coalition, a newly formed group trying to take on that lobbying task, not unlike the Chicago Independent Venue League, organizing support for local nightclubs and music halls, only on a larger, national scale.
Let’s be clear that bars, restaurants, saloons, coffeeshops, nightclubs, music halls, and theaters are all vital businesses unable to operate as they usually would in a pandemic, and they all need relief aid to get from here to the end of the pandemic and a return to a sense of normalcy.
The U.S. Bureau of Labor Statistics reported Friday that the U.S. unemployment rate dropped to 6.7 percent in November, but that was down only slightly from 6.9 percent in October, suggesting any recovery was stalling out, especially as only the day before the U.S. Labor Department reported another 712,000 newly idled workers filed for benefits last week. Labor Secretary Eugene Scalia issued a statement Friday drawing attention to the dire situation for restaurants, bars, and stores, saying, “The economy continued to add jobs in November, with a 344,000 increase in private sector payrolls and labor demand continuing to grow in most sectors. However, jobs were lost in retail and food and beverage establishments in November, and a number of workers pulled away from the labor force amid rising coronavirus cases.”
The statistics bureau confirmed that “ employment in leisure and hospitality changed little in November (+31,000) but is down by 3.4 million since February. Arts, entertainment, and recreation added 43,000 jobs in November, while employment in food services and drinking places changed little (-17,000).”
“We hope they’re paying attention” in Congress, Cora said. “Whatever’s being negotiated in Washington (in) this latest $908 billion relief package, it still remains to be seen whether (the Restaurant Act) is in there.” A letter to the Senate leadership from the bipartisan legislators trying to break the logjam has specifically called for the act to be included. “There is continued support for this from our elected officials,” Cora added, “and we’re hopeful, but at the same time we don’t know.”