When the coronavirus came to America, restaurants were the first and hardest-hit businesses affected by health restrictions. Government mandates forced restaurants to shut their doors to customers for months. This resulted in millions of wait staff and cooks losing their jobs through no fault of their own. In April alone, 5.5 million restaurant employees were laid off.
The dire situation for restaurants is not letting up. In just the last two weeks, state and local government mandates have shut down nearly 100,000 dining facilities across the country. Restaurants have hemorrhaged more jobs and revenue than any other economic sector, and every week more establishments face the prospect of bankruptcy.
The damage to restaurants has spilled over and hurt the farmers, fishermen, and food distributors who supply restaurants and rely on them for business. Meat producers have had to euthanize millions of animals because of a lack of buyers. In addition, fishermen have seen a dramatic drop in demand for seafood. Until restaurants can return to full capacity, farmers and fishermen will continue to struggle.
In response to these unprecedented challenges, I have introduced the RESTAURANTS Act to bring much-needed relief and certainty to restaurants across our nation. This legislation has gained bipartisan support in Congress, as well as backing from restauranteurs and a large coalition of industries that rely on restaurants.
The federal government acted swiftly this past spring to send relief to families, individuals, and businesses in need. Although these measures helped soften the economic blow for many Americans, restaurants did not benefit to the same degree as other businesses because of their unique budget needs. The Paycheck Protection Program required businesses to spend 60 percent of their loan money on labor costs in order for their loans to be forgiven. Yet most restaurants have to spend the larger portion of their budgets on fixed costs like food, rent, and utilities. As a result, many restaurants did not qualify for loan forgiveness and are still waiting for support.
The legislation I introduced would set up a $120 billion relief fund designed to give restaurants the urgent assistance they need. This fund would compensate small and independent restaurants for losses incurred from February 15 through the end of this year. Restaurants could use these funds to cover payroll, benefits, mortgage and rent payments, utilities, maintenance, and supplies. The relief could help thousands of restaurants survive this crisis and would give many establishments the certainty they need to reopen – helping many former employees regain their jobs. With more restaurants reopening, the farmers and fishermen who supply them would benefit immensely from an increase in business.
Restaurants are a pillar of our economy that support the livelihoods of millions of Americans. They are the second-largest private employing sector after health care, and for countless Americans they provide the first opportunity for a job. Restaurants are not looking to profit at this hour but merely to survive. Now is a time for us to preserve these establishments in their moment of greatest need.