Thousands of restaurant workers have already lost their jobs due to coronavirus

Thousands of jobs have already been lost as the novel coronavirus continues to upend daily life for millions of Americans.
Coronavirus Pandemic Causes Climate Of Anxiety And Changing Routines In America
A woman in New York City hangs a sign in a restaurant window amid thousands of closures due to the COVID-19 outbreak. Victor J. Blue / Getty Images

Get the latest from TODAY

Sign up for our newsletter
SUBSCRIBE
/ Source: TODAY
By Michelle Gant

As more restrictions are enacted to help stop the spread of the novel coronavirus, the restaurant industry has been hit with a series of devastating blows.

Last week, Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, called for a 14-day shutdown of all bars and restaurants as part of the nation’s efforts to enforce social distancing. On Monday, even President Trump, who has previously given speeches contradicting the advice and warnings from health officials, also called on Americans to avoid eating in restaurants, bars and other public areas as a way to curb the rapid spread of the disease.

Download the TODAY app for the latest coverage on the coronavirus outbreak.

Now, those at the top of the industry have been forced to make once-unthinkable decisions that will have a lasting impact on millions of lives for weeks to come.

Restaurant closures on the rise

Many large cities and states have already issued their own mandates to close restaurants and bars. While some establishments may still operate as takeaway or delivery businesses, the drastic measures are being taken because many people have continued to flock to these venues, despite warnings.

“The industry supports the efforts of the local, state, and federal governments to slow the spread of the coronavirus, and are making every effort to pivot business models to focus on delivery, drive-thru and carry out," Marvin Irby, National Restaurant Association interim president and CEO, told TODAY Food.

Though most workers recognize the severity of COVID-19, people across all parts of the industry — from restaurateurs to chefs and dishwashers — are growing increasingly worried as their livelihoods face unchartered territory.

“There are more than 1 million restaurants in the United States, employing 15.6 million people. More than 70% of these restaurants are small businesses that support their local communities," said Irby. "These local restaurants run on razor-thin pre-tax margins, and they are facing an unprecedented cash flow crisis."

Hundreds, if not thousands, of restaurants may be closed until the pandemic is under control, and while many will be able to reopen, it's likely that many more will never recover.

Government officials in states, including California, Maryland, New York, New Jersey, Connecticut, Kentucky, Michigan, Illinois, Ohio, Massachusetts and Washington, have all put restrictions on establishments where food is served or venues where large groups gather in order to curb the spread of the virus. Many of the restrictions will remain in place at least until the end of March.

Many larger companies voluntarily ceased dine-in operations, as well.

Starbucks announced Sunday it would be shifting to a “to-go” model for all locations in the U.S. and Canada for at least two weeks. The Seattle-based chain also said it would temporarily be closing stores in “high-social gathering areas,” such as malls and university campuses, as well as in communities with high clusters of COVID-19 cases.

McDonald's and Chick-fil-A both announced the closure of their dining rooms and public play places this week.

While these closures and restrictions have been deemed necessary by public health officials, the people working in the restaurant industry are already facing a major economic impact just a few days after the new measures were enacted.

In New York City, about 154,400 people work in restaurants, cafes, bars, and food trucks, earning $4.7 billion in wages a year, the New York Times reported.

City comptroller Scott M. Stringer has estimated that due to the impact of coronavirus, restaurant sales are estimated to decline by 80% during this shutdown. This number is likely to cripple many businesses.

How many people will lose their jobs?

Many businesses have already laid off workers as the country heads into a recession, which some economists believe has already begun, according to CNBC. If the economy continues on this trajectory, an estimated 3.5 million jobs could be lost, based on figures from previous recessions.

But that burden is likely to have a more devastating effect on people working in certain industries, like those in hospitality, restaurants and food service, as those in unsalaried positions are more likely to be laid off, according to Irby.

More than two-thirds of U.S. restaurant operators reported seeing a decline in traffic last week due to the COVID-19 outbreak, according to a survey by Black Box Intelligence (which was first reported in Restaurant Business Online).

The Texas Restaurant Association released a report estimating 25-30% of independent restaurants in the state will have to close if the reduction in patrons continues. There is also concern over workers in other food supply chain industries, including farming, trucking and manufacturing, which TRA estimates could result in an additional loss of at least 500,000 jobs.

In this uncertain climate, no restaurant is immune to the economic impact.

On Wednesday, Danny Meyer, who operates one of America's most successful restaurant groups, announced that 2,000 people (nearly 80% of his company's total workforce) would be immediately laid off from his restaurant empire Union Square Hospitality Group.

And experts say it's likely to get worse.

“The foodservice industry was on track to have sales of $899 billion this year," said Irby. "Sales are already slowing, and the loss of revenue will have a deep impact on the small business owners of local restaurants."

The question on many people’s minds during this time is how they can help keep their favorite business afloat while still following social distancing protocol.

How to help local restaurants and industry workers

"It’s too early to know how long the necessary guidance on social distancing will last, but restaurants are still ready to cook for their communities," Irby said. "Reach out to your favorite local restaurant and find out how you can order."

The first thing restaurant fans can do is to order delivery or takeout, if possible, for their favorite place. Before browsing through an app, call the local eatery first to see if they're offering a new, direct service. This way, the money is going directly to the business, and not being split by a third-party service.

However, many popular delivery services are doing their part to help these companies stay in business since they rely on restaurants.

OpenTable partnered with a number of delivery services, including Caviar, UberEats, and Postmates, to facilitate delivery and takeaway at restaurants on the OpenTable network. In the OpenTable app, go to the “Get it delivered” section to see which restaurants are offering delivery through those partners. The reservation system also compiled a list of businesses offering independent takeaway service, which may also be ordered through the app.

Last week, Grubhub announced it would temporarily suspend the collection of up to $100 million in commission payments from independent restaurants nationwide. The company also created a fund that will enable proceeds from its Donate the Change program to go toward charitable organizations supporting restaurants and delivery drivers impacted by the current health crisis. Diners are able to round up the change from every order and donate it to the fund.

Doordash is offering a similar option. Through the end of April, independent restaurants in the U.S. can sign up for free with DoorDash and Caviar, and pay no commission for 30 days, a company spokesperson told TODAY in a statement. For all existing DoorDash partners, there will be no commission fees on pickup orders through the end of next month.

Any restaurant workers facing fewer hours will be given priority access to sign up as DoorDash delivery workers to help them make ends meet during this period of uncertainly.

Another way to support food businesses is by buying gift cards and merchandise. Many businesses are now offering branded merchandise to help offset lost wages from a lack of diners.

Helen Rosner, The New Yorker's food correspondent, compiled a handy list in her Instagram highlights showcasing dozens of businesses across the country that are offering merch. Even if your favorite spots don’t normally extra things to buy, they might be doing it now, so check out their websites and social media accounts to find out if they have anything to offer; then pick out some cool new sweatshirts and T-shirts to wear while you’re self-isolating.

Organizations prioritizing those in need are also helping out struggling restaurants, so consider donating to a group. Restaurants in need of assistance may contact the Small Business Association, which announced it will work with state governments to provide low-interest disaster recovery loans to restaurants that qualify.

Support Restaurants, a collective of restaurant industry professionals, has set up a national Dining Bond Initiative “to get funds into the hands of restaurants now, even if they are temporarily closed,” according to its website. Any business can join. The Dining Bond works like a savings bond, allowing people to purchase them at lower rates for a higher future value. For example, a $100 certificate might only cost you $75.

Other organizations have set up online fundraisers to help tipped employees facing financial struggle.

The Restaurant Workers’ Community Foundation announced it’s forming a COVID-19 Crisis Relief Fund for restaurant workers. This fund will direct money to organizations leading on-the-ground efforts in the industry, invest in providing zero-interest loans to businesses that need assistance reopening once the crisis has passed and help raise money for individual workers facing economic hardship.

As the state of the health crisis and related restrictions change on a daily basis, more and more organizations are stepping in to help keep these businesses afloat.