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In Pennsylvania, Over 80 Percent of Restaurant Workers Are Out of a Job

The National Restaurant Association is asking Congress for $240 billion to help the industry recover

corner restaurant boarded up with sign that says tradesmans
Restaurants in Philadelphia started shutting their doors to slow the spread of COVID-19 mid-March.
Justin Blasi

At least 81 percent of restaurant employees in Pennsylvania have been laid off or furloughed since the beginning of the novel coronavirus outbreak in March, according to a new report from the National Restaurant Association. On Monday, the organization asked Congress to create a $240 billion recovery fund for the food service industry.

In a letter to federal lawmakers, the National Restaurant Association lays out bleak findings from a survey it conducted in April. Across the U.S., eight million restaurant employees have been laid off or furloughed. That’s two out of every three restaurant jobs. In March, the food service industry lost $30 billion in revenue, and will likely lose another $50 billion by the end of April.

Four out of every 10 restaurants have closed, “some with no hope of reopening,” the letter reads.

In Pennsylvania, the survey found that 96 percent of restaurant operators have already laid off or furloughed employees, on average reducing staff by 85 percent. Eleven percent say they expect to lay off or furlough even more employees over the next 30 days.

Based on those results, the National Restaurant Association estimates that more than 8 out of every 10 employees who were working in the restaurant industry in Pennsylvania in February have now lost those jobs, accounting for more than 332,000 people.

Restaurant operators in PA reported, on average, an 82 percent decrease in sales in early April. If that trend continues, the local industry will lose more than $1.8 billion in sales by the end of the month.

About half of Pennsylvania’s restaurants are open for takeout and delivery while dining rooms are closed. One percent of operators say their restaurants are closed permanently, compared to three percent nationally, and another three percent in PA expect to close permanently within the next 30 days.

Nationally, 60 percent of restaurant owners think that federal relief programs already in place, like the CARES Act, are not enough to let them keep employees on the payroll.

“The restaurant industry has been the hardest hit by the coronavirus mandates — suffering more sales and job losses than any other industry in the country. As past recoveries have proven, we will be one of the slowest to bounce back. For an industry with sales that exceed the agriculture, airline, railroad, ground transportation, and spectator sports industries combined, a restaurant relief and recovery program is desperately needed,” the National Restaurant Association writes in its letter to Congress.

The association is asking for a grant program where restaurant owners can apply for funds through the end of 2020. It also wants more money put into the Paycheck Protection Program, which offers federal relief in the form of loans to small businesses, as well as a restructuring of the program, which the NRA says doesn’t make sense for restaurants, especially not now. The PPP has an eight-week loan period, but restaurants are still under stay-at-home orders, many of which don’t have an official end date yet. Even when those orders end, “it will take some weeks — or months — for restaurants to ramp up operations (restock inventory, recruit and retrain staff, comply with new health codes, etc.),” the NRA explains in its Blueprint for Recovery.

The organization also wants changes to the PPP stipulation that at least 75 percent of a loan must be spent on payroll: “For an industry crippled by the current crisis with vastly scaled-back operations and skeleton workforces — if at all — this rule severely limits the benefit to restaurant owners.”

Additionally, the plan proposes tax credits or a grant program for restaurants that need to make changes to their facilities to follow new health and safety guidelines, like continued social distancing, enhanced sanitization, and ongoing use of personal protection equipment and disposable products.

“The national shutdown is a devastating blow to the hospitality industry, which is one of the largest in the state,” says John Longstreet, president and CEO of the Pennsylvania Restaurant & Lodging Association. “The profit losses and furloughs are quite shattering. We’re confident we can recover from this, but a proper recovery will require assistance and patience.”

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