When the pandemic hit, governors across the country were faced with a difficult decision: They could either shut down restaurants or risk more COVID-19 outbreaks in their states. Quickly, and responsibly, governors chose the latter, but, naturally, the restaurant industry suffered as a result. By April, over 80 percent of restaurant workers in Massachusetts were laid off or furloughed — a trend that could be seen in state after state — and the industry lost hundreds of billions of dollars in revenue nationwide.
That’s a big reason why states started tinkering with their lockdowns, easing indoor dining restrictions in order to allow restaurants to draw customers back. Governors have been forced to make trade-offs between public health and economic misery: Earlier this month, for example, Governor Baker expanded customer capacity at restaurants from 25 percent to 40 percent indoors, a decision public health officials said was rooted in the declining number of positive cases. While the move could help some businesses survive, it could also potentially contribute to more coronavirus spread at a time when new and highly transmissible variants are infecting more and more people across the country.
But public health and restaurant survival don’t have to be at odds — they never did. Just as the federal government bailed out the airline industry early on in the pandemic or how it stepped in to fund stage and music venues in December, the federal government should do everything in its power to keep restaurants afloat while encouraging them to limit activities that are risky for customers and workers alike, such as indoor dining. A proposal by congressional Democrats to include $25 billion in grants for restaurants in the next major COVID relief package could embolden governors to clamp down on indoor gatherings until it’s reasonably safe again, by relieving them of the no-win choices they now face.
The grant proposal is significantly less than the $120 billion industry advocates have called for. But that’s not necessarily a bad thing. Congress should make sure that it targets federal relief to restaurants that actually need it. Last year, when the Paycheck Protection Program rolled out, big corporations ended up using resources that could have been better spent on small businesses. In fact, 1 percent of borrowers — including big law firms and restaurant chains — accounted for over a quarter of total PPP loans. Lawmakers should try to avoid repeating that outcome.
So far, the restaurant grant package would do just that. The program is specifically designed to help small businesses and small-scale entrepreneurs, not corporate chains. Of the proposed $25 billion, $5 billion would be reserved for restaurants that made less than $500,000 in annual revenue in 2019. Chains and franchises with over 20 locations would also not be eligible for receiving any of the allocated funds. And though the fund would probably dry out relatively quickly — a reflection of the dire situation so many restaurants are in — lawmakers say Congress could replenish the fund as needed.
By providing only scattered and limited relief earlier in the pandemic, the federal government all but guaranteed that governors would come under enormous pressure to allow indoor gatherings. From wedding venues to restaurants to movie theaters, states reopened businesses that would undoubtedly add risk to community spread, all while keeping most schools — the gathering space that is most critical — closed. Had Congress bailed restaurants out sooner, then that would have resulted in better economic and public health policy. It would also have relieved restaurant workers of the choice between a paycheck and personal safety. In fact, one recent study showed that line cooks are the workers most likely to die of COVID. They’re effectively forced to work in life-threatening conditions, and most often without hazard pay.
Now lawmakers have a chance to finally save restaurants and protect their workers while encouraging governors to keep indoor dining off-limits. Restaurants shape our cities, our towns, and our neighborhoods. They’re gathering spots for friends and family, and they’re often among the first to help their communities when disaster strikes. And yet, when the pandemic came for restaurants, they were left behind. And even though many of their loyal customers tried to help them stay afloat and started and contributed to many fund-raising efforts, hundreds of thousands of restaurants in the United States have closed permanently. But they shouldn’t have had to. It’s time for the government to pick up the tab.
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