The restaurant industry lost 5.5 million jobs.

A record-breaking 20.5 million jobs were lost in April, and the unemployment rate rose to 14.7 percent, according to the Bureau of Labor Statistics.

The number of unemployed workers is the highest the U.S. has seen since the Great Depression. 

For perspective, it took two years for the U.S. to reach double-digit unemployment and lose more than eight million jobs during the Great Recession. The country added 22.8 million jobs since then, and that gain was wiped out by the end of April. The Great Depression reached a peak of 24.9 percent unemployment in 1933. 

On Thursday, the U.S. Department of Labor reported that another 3.2 million Americans filed for unemployment in the week ending May 2, meaning more than 33 million have filed claims in the past seven weeks. The job losses peaked in the final week of March, with 6.9 million filing for unemployment. 

The Independent Restaurant Coalition said food and beverage locations lost 5.5 million jobs in April alone, or about 27 percent of total job losses for April. The organization recently called for a $120 billion stabilization fund to help the 11 million employees and 500,000 locations in the independent sector.  publicly traded companies or other large chains would not have access to the funds. 

“Restaurants were the first to close and will be the last to reopen,” the Coalition said in a statement. “A quarter of the people who lost their jobs last month worked in a restaurant, yet we’ve seen nothing from Congress that will help ensure these people will have jobs to return to when this crisis ends or that will save an industry that contributes $1 trillion to our economy.”

Approximately 9 percent of Paycheck Protection Program loans have gone to businesses in the food services and accommodation industry, according to the Small Business Administration, despite the industry accounting for a significant portion of unemployment numbers. 

The Coalition has frequently voiced its displeasure with the program, particularly with the eight-week forgiveness period. Operators have argued that it doesn’t make financial sense to bring back employees while stores are closed. If they do, the employees will likely be laid off again after the forgiveness period. 

“While we are pleased that Congress is proposing changes to the PPP [Paycheck Protection Program], any fixes to the program are an eight-week band-aid for an 18-month problem,” the Coalition said. “The PPP is helping some small businesses survive the crisis, but it’s not working for independent restaurants. Many independent restaurants aren’t getting relief, and among the small group that are, they won’t be able to use that relief when shelter-in-place orders are lifted. Congress must take action and pass a stabilization fund.” 

A survey by the National Bureau of Economic Research in April estimated that restaurants have a 30 percent chance of remaining open if the crisis lasts four months. Additionally, another survey released jointly by the Coalition and the James Beard Foundation found that 80 percent of independent restaurant owners are unsure if their business will survive the pandemic. 

Similar to the Coalition, the National Restaurant Association has asked Congress for assistance, but in the form of a $240 billion recovery fund. The number matches the expected financial loss by the end of the year. 

Matters are expected to move in a slightly positive direction as more than a dozen states have allowed dining rooms to reopen, albeit under tight restrictions. 

“Employers who have maintained open communication and transparency with workers throughout the pandemic are poised to retain their workforce and reopen with success,” said Steven Kramer, CEO of digital workplace platform WorkJam, in an email to FSR. “Further, employers who open direct communication with employees now will quickly see a return on their investment.”

“Stores everywhere are putting together business continuity plans—the key is to do it quickly while maintaining cost efficiency,” he added. “If they want to reduce risk while preparing for additional change, leveraging technology that can mitigate further disruption caused by national (or local) mandates as well as changes in consumer demand.”

Feature, Labor & Employees