One by one, America's cities and states are deploying executive action to shut down bars and dine-in service for restaurants to limit the spread of coronavirus. If it can happen in our nation's three biggest cities -- New York, Los Angeles, and Chicago -- it's a solid bet that by the end of the week there will be scant territories in which you can enjoy a watering hole or a nice communal meal.
The service industry is going to be far from alone as far as suffering businesses are concerned when the collateral damage of this is all said and done. But it's a safe bet that if there is not a large bailout from the government at the state and/or federal level, many of our favorite bars and restaurants will perish. And the impact would not end there.
The dystopian scenes as revelers packed bars in celebration of St. Patrick's Day in cities across America on Saturday forced governments' hands. We've all seen that matches meme a thousand times by now, and it became clear that social isolation was just not going to work for us on the voluntary honor system. Nevertheless, now we must look towards the next derivative of this decision as far as upholding our society is concerned.
Bars and restaurants already operate on notoriously thin margins, and their workers depend on tips. Yes, restaurants can ramp up takeout and delivery business, but this will provide little solace for servers who have their rent, taxes, and utilities bills due. And how are bars that don't serve food supposed to weather this?
Giant, which is probably my favorite restaurant in Chicago on account of their unique flavors and textures, published an open letter to Illinois governor JB Pritzker on Instagram, commending him for the health-conscious decision to close bars and restaurants across the state, but urging an immediate benefits package so that our favorite establishments do not go under (there are four slides):
Recommendations from Giant included immediately supporting emergency unemployment benefits for all furloughed workers, elimination of payroll tax, and a call for rent and loan abatement for impacted workers.
We've seen how galvanizing it was when billionaire owners and millionaire players pledged to support hourly arena workers while sports are closed; there is not a similar mechanism by which independent bars and restaurants can support their workers. GoFundMe's are also a nice thought and will certainly be helpful for some servers and bartenders, but it would be precarious for the entire industry to rely on that. Without help, a lot of these places will just shut down -- if you live in a big city, you become accustomed to seeing that happen with some of your favorite spots in the best of times.
There will have to be government bailouts of the service industry, applicable to both businesses and workers. Beyond the fact that bars and restaurants are a prominent factor into forming the souls of municipalities, the effect of this lost money in the chain link of how economic recirculation works is nearly impossible to calculate.