Two rounds of Paycheck Protection Program money, totaling $84 billion in aid to restaurants and inns, according to Restaurant Business, were issued to hospitality businesses — including thousands of restaurants — to pay laid-off workers and cover expenses accumulated while closed.
Now, dining and drinking establishments are back for a fourth round, and they seem to have sympathy in Congress. Though the Senate wouldn’t wave through the aid by acclamation on Saturday, something of a legislative Hail Mary, the effort has 209 representatives and 15 senators as co-sponsors.
Before the industry gets more help, two things should happen.
First, target the new money strictly for independent restaurants that were shut out from the last round, when recipients included strip clubs, which had sued to get access to the PPP funding that, bowling alleys, Disney World restaurants, fast food franchises and restaurant companies had already received.
The Independent Restaurant Coalition, the main driver behind the aid push, maintains that the guidelines written for the previous revitalization fund would prevent double-dipping, but that needs to be clearly stated.
Barry Sorkin, co-founder of Smoque BBQ in Chicago, says he’s grateful that Congress approved the PPP program (his restaurant received a loan from the program), but he wants to see others helped, too. “It makes sense for those who haven’t gotten any money to get some.”
Second, and more important, there must be a serious conversation about the toxic work atmosphere that permeates many dining and drinking establishments. Because Congress holds the purse strings for further financial support, maybe congressional hearings about the nature of the industry would be appropriate.
Erika Polmar, executive director of the Independent Restaurant Coalition, says her group has a single priority: getting federal money. “The industry is on the verge of extinction,” she says. But some in the business readily acknowledge the need for some soul-searching.
“The industry needs a big reset,” says Bruno Feldeisen, a veteran chef and judge on “The Great Canadian Baking Show.”
Sava Farah, CEO of the Pulpo Group in Ann Arbor, Mich., similarly backs self-examination in the restaurant business: “I don’t even want to see the industry recover until we have that depth of conversation.”
Her company received two PPP loans but was not awarded revitalization funds, even though she checks both boxes for aid that was originally designated to help women and people of color.
Farah backs another round of government support, but says the 1 million unfilled jobs in the industry illustrate the need for change in an “abusive culture.” She adds, “The restaurant model is completely antiquated. It’s hard on the owners. It’s hard on the staff.” As for profit, “There’s very, very little. The turnover is massive.”
Sorkin says restaurant proprietors should be capable of changing the workplace environment, given the adaptability they’ve shown during the pandemic, pivoting from indoor dining to carry out, then to outdoor dining and back again. “We’ve found that we have to re-examine things we’ve re-examined,” he says. Maybe some high-profile pressure would help.
Would it be appropriate for Congress to push a private industry to address its culture as a condition of aid? Well, federal assistance programs in the past have required companies to make significant changes.
During the 2008-2009 financial crisis, for example, the Obama administration engineered an auto industry bailout but insisted on extensive reorganizations at General Motors and Chrysler, killing brands such as Pontiac and Saturn; closed thousands of dealerships; changed business practices; and revised union contracts.
Even if the government won’t lead the conversation, Farah is bent on discussing what can be done so that employees want to come back to work and ultimately make restaurants their careers. More than just happy workers are at stake, she says.
“Without restaurants, you don’t have tourism,” a $25 billion industry in Michigan, she says. ”Without tourism, you don’t have healthy downtowns.”
Government aid, while sorely needed, can’t single-handedly revive restaurants. Those in charge need to look in the mirror and then pledge to change.