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What Restaurants Need From the Next Federal Stimulus

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It should ensure that restaurants can viably remain closed for now — or safely operate takeout — while letting workers who want to stay home do so without facing financial ruin

A restaurant worker looks out of a window while a sandwich board outside signals that the restaurant is open only for delivery and takeout during the city’s coronavirus crisis
Williamsburg Mediterranean restaurant Dar 525
Gary He/Eater

The key to the next COVID-19 stimulus package, which Congress will consider this month, will be to address the failures and omissions of the previous trillion-dollar spending bills. The next stimulus should tell the food world: We’ll help you, especially if you need to wait it out a little longer.

Grocery store employees are losing their lives. Amazon and Instacart staffers have walked off the job pending better protections. Restaurant workers are commuting from neighborhoods with high infection rates via crowded subways where social distancing is impossible. Undocumented workers are denied unemployment benefits. And because small-business loans are highly restrictive, many staffers won’t have restaurants to return to when the economy reopens.

If the last stimulus set the groundwork for bringing businesses back online — with President Donald Trump hastily rushing toward a return to normalcy — the so-called fourth stimulus should do the opposite. It should ensure that restaurants can viably remain closed for now — or safely operate takeout — while letting workers who want to stay home do so without facing financial ruin.

There is some hope on this front. There’s been talk about rent relief. Politicians have also floated the idea of extending the $600 pandemic unemployment payments. But Republicans already shut down an effort to make newly federal sick leave permanent, and have so far ignored a Democratic effort to provide hazard pay to food service workers. Still, none of this is a reason to back down. Here’s what the hospitality industry needs from the next federal stimulus.

Extend $600 pandemic unemployment insurance through the summer’s end

New York unemployment insurance typically caps out at $2,000 per month, barely enough to make rent in many parts of the city — never mind pay utilities or buy groceries. The last stimulus bill addressed that issue by giving most workers an extra $600 per week, but the payments end on July 31. Operators in the Empire State and elsewhere have already talked about not being able to open until August; it’s likely that many will need help beyond the current deadline.

Congress, accordingly, should extend payments through the end of the summer. Both the federal and state governments should also find a way to offer these benefits to the undocumented — a fair request given that they pay into the system in the form of taxes, reportedly to the tune of over $1 billion in New York alone.

Revamp the small-business loan program

In the last stimulus, the government instituted a $350 billion Paycheck Protection Program, allowing businesses to receive grants provided they used the bulk of funds to keep workers on payroll. There’s one catch, however. Venues that don’t rehire the bulk of their staff by the end of June will see those grants convert to burdensome loans, a tough provision for restaurants that aren’t sure whether it will be safe to reopen or how much business will fall off.

Congress should, for the hospitality industry at least, fully transform the loans to grants, without any provisions on rehiring or restrictions on using funds for fixed costs. Being able to pay rent will do a lot more for saving jobs than keeping workers on at venues that are shuttered, or worse, prematurely operating amid a deadly pandemic.

Institute a permanent sick leave and family leave benefit

Last month, a new federal sick leave bill went into effect, albeit only temporarily. An early version of the bill passed created a permanent paid benefit, but Republicans objected. As a result, the policy is quite narrow, targeting those sick or quarantining with COVID-19. The benefit expires in December. What’s more: Anyone who takes paid leave to care for a family member would not again be able to take paid leave for themselves if they later got sick.

New Yorkers are in a strong position here; we enjoy additional city and state protections guaranteeing paid time off in the event of illness, although sometimes at lower payouts and with fewer days than the federal program — and with more administrative hoops to jump through. A more far-reaching federal program would help fill in some of the weaker spots in the New York plan. And inasmuch as the Empire State does better if the country does better — viruses do not stop at borders — a permanent paid sick leave program would help mitigate the spread of disease and the potential for human and economic disaster during future pandemics.

Institute a nationwide personal protective equipment mandate

Both New York, New Jersey, and Los Angeles have ordered employers to provide grocery and other public facing workers with face masks. Congress should do the same to ensure the protection of workers in states who haven’t taken similar decisive actions.

Institute caps on delivery fees

Restaurants depend on delivery to survive; that’s a narrative that doesn’t necessarily smell right when it’s propagated by Grubhub commercials, a company whose fees — up to 30 percent — can attenuate a venue’s already thin profit margins. San Francisco Mayor London Breed, accordingly, capped third party delivery fees at 15 percent, effectively arguing that tech delivery companies shouldn’t eat away at the livelihoods of independent establishments. The federal government should do the same, especially since local New York leaders haven’t yet acted. Grubhub argues that such regulations could raise prices for consumers and lower pay for delivery workers.

Promote mortgage and rent relief

Restaurants can’t pay rent because they’re not open, and landlords won’t be able to pay banks because they’re collecting zero or reduced rent. Without some sort of forgiveness on both these fronts, the U.S. risks a deeper economic collapse. If Congress can ensure workers laid off due to COVID-19 receive close to their full pay through enhanced unemployment, a fair move in kind for restaurants would be to mandate rent relief for the duration of a local shutdown order. Landlords should receive forgiveness too, leaving the government to bail out the industry they’re most familiar with bailing out: the banks.

Low cost coverage for the uninsured

Millions of hospitality job cuts could cause many to lose their employer-sponsored health insurance — if they had that coverage in the first place — while uninsured or underinsured cooks and delivery workers still on the job risk exposing themselves and the hundreds of customers they interact with every day. The good news is that Trump has announced that he’ll be using stimulus money to reimburse medical providers if they treat uninsured COVID-19 patients. The bad news is that president declined to say whether these protections would apply to the undocumented, or whether folks will be covered if they receive treatment for other ailments.

New York is a good state for these protections; many ex-workers will qualify for coverage under Medicaid or the Affordable Care Act. And in the city, a new program called NYC Cares offers coverage for even the undocumented. But not everyone is aware of those programs — and perceptions of the high cost of coverage could cause residents to delay coverage. Congress should codify Trump’s policy in the next stimulus, ensuring coverage for both the undocumented and those who need hospital care for non-COVID reasons.

Hazard pay for restaurant, grocery, and delivery workers

Hazard pay, from one perspective, is a form of preemptive blood money. It attempts to justify potential or actual harm to an employee via added compensation. This can incentivize even more people to risk their lives in exchange for what’s still low pay. On the other hand, it’s among the smallest things society can do to compensate an essential class of hospitality workers for their risks. Senate Minority Leader Charles Schumer proposed a strong measure that would guarantee the equivalent of up to $25,000 a year extra for these staffers, retroactive to the start of the crisis and going through until the end of the year.

Congress should adopt the hazard pay measure, but it’s worth meditating upon this issue for a bit longer because the extra cash doesn’t solve the larger ethical and work safety questions at hand. Grocery staffers, cooks, cashiers, and delivery people surely didn’t expect their health to be put in jeopardy when they were hired, but unless they’re laid off, they won’t qualify for the most comprehensive benefits. There’s no unemployment system for people who choose to quit and safeguard their health. This highlights a tough divide in the industry: Unemployed captains, chefs, and general managers can (justifiably) collect up to $1,100 per week in benefit checks, all while grocery staffers and cooks can earn less while still showing up to work in the global heart of the pandemic.

The true solutions to that paradox go beyond hazard pay. They involve more complicated questions regarding capitalism, inequality, universal basic income, and the worth of a human life. For now, a worker with little access to benefits is likely to wager that a low risk of death by COVID-19 carries better odds than the certainty of financial devastation from quitting a job. As long as federal policy doesn’t provide a safe and economically sound way for more workers and small-business owners to stay at home, more people will die.

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