The coronavirus pandemic has been financially devastating for a wide range of industries, but particularly restaurants, which have been ordered to shut down in many cities across the U.S. That has prompted immediate layoffs of restaurant workers.
In New York, restaurateur Danny Meyer’s Union Square Hospitality Group laid off 2,000 people last week, amounting to 80% of its workforce. Chef and restaurateur Tom Colicchio, famous from hosting Bravo’s “Top Chef,” laid off 300 people from his Crafted Hospitality restaurant group.
U.S. unemployment claims rose last week the most in one week since the financial crisis, with the restaurant segment reflecting some of the most new claims (in states like Washington, claims jumped seven-fold.) Colicchio says an estimated 5 million to 7 million restaurant workers have already been laid off nationwide.
Colicchio and others have now launched the Independent Restaurant Coalition to advocate for financial relief from the government in the form of “direct income replacement” for the workers missing out on pay checks.
“If we get direct replacement, we can actually start funneling that through all the other different industries that we touch,” says Colicchio. “We’re not looking for a bailout, we want the government to put us back to work, so that many of these restaurants can open up and start feeding our community.”
Meanwhile, most of the restaurants that have shut their doors for in-restaurant dining are still open for takeout and delivery. In New York, 70% of restaurants are still offering takeout, the New York State Restaurant Association told Yahoo Finance on Friday.
Colicchio says that’s a bad idea.
The restaurants open just for takeout are losing money every night anyway, Colicchio says—so it’s not worth having workers flout the stay-at-home directives.
“Most people I’m talking to are doing at most $5,000 of business a night,” Colicchio says. “They’re putting their employees in danger. We’re telling people to stay home, so unless you’re essential, you should stay home. Especially in New York City, you’re asking employees to take public transportation to come to the restaurants, I don’t think that’s a great idea. But the restaurants are doing this because they’re struggling, I understand the intention, I had the same desire to make sure my staff is kept whole, but it’s just not a good thing to do right now.”
It’s not just independent restaurants; big chains like McDonald’s (MCD) and Starbucks (SBUX) have also dragged their heels on closing completely.
Starbucks, amid the pandemic, at first made inside seating off-limits, keeping its cafés open for to-go orders. Then, last week, it closed most of its café-only locations, keeping open only drive-through lanes and a handful of stores for mobile delivery.
McDonald’s has closed its in-store dining at all U.S. locations, but is allowing franchisees to stay open for to-go orders if they wish. In contrast, in the U.K., McDonald’s and Subway have both closed all their locations, even for takeout.
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Daniel Roberts is an editor-at-large at Yahoo Finance. Follow him on Twitter at @readDanwrite.
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