Democratic governors in New York, California, Illinois, Oregon, Washington, and Michigan are once again shutting down indoor dining at restaurants under the guise of fighting the rise in new Covid infections. Yet, actual contact tracing data shows that restaurants and bars account for less than 1.4% of the virus spread. Most restaurants are limited to 25% capacity and California has even gone as far as banning dining in outdoor patios. Restaurant owners have spent heavily to equip their workers with personal protective equipment and retooling their dining rooms in order to maximize safety.
The National Restaurant Association announced that, nationally, nearly 110,000 restaurants have permanently closed. In many cities, rent alone could be as high as a million-dollars a month. Even at 25% capacity most restaurants can’t cover their rent, utilities, salaries, and all other overhead. Takeout alone helps a bit but still falls far short of what is needed.
It is not just the owners of restaurants that are getting hurt. They will lose the equity they have built over many years. But, it is also the low-earning servers and kitchen staffs who are being laid off. Often, servers depend on tips that closures and limited capacities have reduced and cutoff. In California alone restaurant closures accounted for over 139,000 new unemployment claims just this past week. In other words, Democratic governors are whacking workers who need the income the most without the statistical or scientific evidence that these shutdowns are needed.
If all of that isn’t bad enough, many of these same Democratic governors are saying that they will need to raise income tax rates to make up for deficits resulting from previous decisions. NY’s Andrew Cuomo said “you could see dramatic tax increases that would hurt families and hurt the economy.” These governors know that the old battle cry of “tax the rich” no longer works because the so-called “rich” are fleeing high-tax states to places like no-income-tax Florida. Further, low income restaurant workers are also fleeing cities like New York to places like Florida where restaurants, even Walt Disney World, are in full operation. The irony is that per-capita Covid cases in Florida are lower than New York.
As I type this post I am hearing that NY’s famed “21 Club”, which dates back to 1930 as a speakeasy, will shut its doors for good next month. This will result in another 140 employees out of work.
Restaurants help define a neighborhood fabric. In areas like parts of NY’s Brooklyn and the South Bronx it was the opening of small restaurants that helped bring about renewal of these neighborhoods. Their closing could also contribute to the decline.
By closing restaurants all these governors are doing is causing destruction far-worse than the Covid virus. In the end, we will see communities with nothing else other than boarded up storefronts, homeless, and crime.