Restaurant Industry During COVID-19

This article was written by Cameron Fisher, Adam Goode and Nick Lombardo.

The economic effects of the Coronavirus outbreak deepened this past week as the number of jobless claims in the U.S. rose to a record 6.6 million, representing approximately a 13% unemployment rate according to the New York Times. The burden of the crisis has been most prevalent in industries such as tourism, retail and restaurants, where hundreds of thousands of part-time and full-time workers have lost their jobs and many businesses are threatening to shut down. The National Restaurant Association (Association) estimated in a recent survey that within the first 22 days of March, three million jobs and $25 billion in sales (a 47% decrease), were lost as a result of closures and restrictions attributed to the virus. The Association also estimated that 3% of all restaurants in the US have closed permanently as a result of the pandemic and up to 11% have said that they may close permanently within the next 30 days.

In response to the pandemic, on March 27th, 2020, President Trump signed into effect the Coronavirus Aid, Relief and Economic Securities (CARES) Act, which increases unemployment benefits and payments to many of those most affected by the crisis. The CARES Act also provides loans and other relief to restaurants and other small businesses that apply and qualify. However, there is still a significant economic hardship on these unemployed workers within the restaurant industry and a number of entities have taken notice.

Several Organizations are trying to help restaurant workers affected by this crisis combat lost wages during this great time of need.

Boston-based brewery Samuel Adams, for instance has partnered with The Greg Hill Foundation to setup the Restaurant Strong fund which has raised money that will be given to recently unemployed workers within the service industry due to the COVID-19 pandemic.  Individuals in several states including Ohio, can receive $1,000 if they complete an application and meet the following requirements:

  • Full-time restaurant employee (minimum 30 hours/week, can be multiple restaurants)
  • Employed for three months or longer at the same location
  • Worked in a restaurant, bar, cafe or nightclub
  • Submit the last two pay stubs received

The One Fair Wage campaign is another group trying to help by providing cash assistance to restaurant and service workers who rely on tips. To apply, workers must fill out an application on the firms’ website and an organizer will reach out to discuss the application.

Some restaurants, meanwhile have tried different ways to stay open and service customers, including carry-out, curb-side pickup and delivery.  There are even restaurants that are delivering their individual ingredients to people so they don’t have to go to grocery stores.

Uncertainty in times like these requires communities and businesses to continue working together to meet the challenges ahead. Schneider Downs is committed to helping our clients navigate the uncertainties their businesses face due to the coronavirus and other issues.  If you have any questions or need assistance, please reach out to us, we are happy to help.

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The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at contactSD@schneiderdowns.com.

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2020 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

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