In an alternate timeline, this would have been a big week for Milwaukee. Fifty thousand visitors to the city were going to spend their money judiciously, and restaurants and bars would have made bank with catering orders, parties, and a 4 a.m. bar time.
Instead, Milwaukee has a convention that has no attendees and brings in no cash flow. When the COVID shutdown started in March, there was at least hope among service industry folks that the DNC would inject some much-needed cash flow. As the months went on and the DNC got smaller and smaller, that hope waned until it was clear that there would be no DNC boost to the local economy.
It's not just here in Milwaukee that restaurants and bars are struggling, of course. According to some sources, full service restaurants have lost as much as 80% of their business at the peak of the pandemic, and are still down a significant amount compared to last year. Even if customers felt comfortable dining out again, the record job losses and economic hit to pocketbooks would still significantly affect “luxury” businesses like restaurants.
This problem of lost revenue for restaurants and bars isn’t going away. Until there’s widespread administration of a vaccine, restaurants will continue to have greatly reduced capacity for social distancing, and people will continue to avoid enclosed spaces. Many service industry workers will remain unemployed, and restaurants will continue to close as owners run out of savings to keep their businesses going.
A New Act
Unlike the auto industry and big banks that have been “bailed out” in the past, the restaurant industry, which accounts for 4% of the U.S. GDP, is made up largely of independent small businesses. There’s a proposed bill in Congress, called the RESTAURANTS Act, that would provide a $120 billion relief fund for these struggling small businesses.
The bill, which was introduced in June, is cosponsored by a bipartisan group that includes Sen. Chuck Schumer, Sen. Roger Wicker, and 174 others in the House, and 26 cosponsors in the Senate. It was developed with input from the Independent Restaurant Coalition, an industry group that formed near the beginning of the pandemic with the goal of representing small restaurants, bars, and their employees through this crisis.
The bill would create a substantial relief fund in the form of grants. The grants would only be available to service industry businesses that are not publicly traded or part of a chain with more than 20 locations. Grants would cover the difference in revenue between 2019 and projected revenue through the end of 2020.
Unlike the Paycheck Protection Program (PPP) of the CARES Act, the money from RESTAURANT Act grants can be used on expenses other than payroll, including food, rent, supplies and other overhead, giving the business owner more flexibility.
Additionally, to avoid the problems that surfaced with the PPP, the first 14 days of funds will be made available only to businesses with $1.5 million or less in average annual revenue, in hopes that it will help women- and BIPOC-owned businesses secure funding. Of the $300 million allocated to administer the program, $60 million would be earmarked for outreach to marginalized and underrepresented communities.
What You Can Do
Milwaukee has a thriving and robust restaurant and bar scene, but many restaurants have already closed permanently because of the pandemic, and many more will probably follow suit. As always, if you are comfortable and able to support your favorite local restaurants by patronizing them, either with takeout or in person dining, now is the time to do that. Leave good reviews, be understanding of problems or mistakes, wear a mask even if you're sitting on a patio or picking up takeout, and tip well.
You can also show support by emailing your representatives about the RESTAURANTS Act. The Independent Restaurant Coalition makes it super easy to do with a form on their website. You just enter your information, and using your address, it populates your representatives for you, along with a short form letter of support. Click “Send Message” and you're done.
If you’ve seen local restaurants post on social media recently asking for your support on legislation, chances are it was about this. Small restaurant owners are in dire straits, and are sincerely appreciative of any support you can give, even if it's simply spreading awareness and emailing your reps.
To read more New Restaurant Reality columns by Lacey Muszynski, click here.
