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Coronavirus’ Impact on the Economy

An economic downfall is slowly showing its effect from the coronavirus. Margaret Crable, web content specialist and writer for USC Dornsife: College of Letters, Arts, and Science, wrote that “between March 21 and 28, as the country enacted quarantine measures, the United States experienced a 3,000 jump in joblessness claims.” According to the Department of Labor, unemployment claims went up 1,106,000 million.

Those millions of people that are applying for unemployment are some of the most vulnerable right now. They are local entrepreneurs who own businesses. Most, if not some, work at our favorite restaurants. Immigrants, whose job is to pick fruits and vegetables, are affected by the global pandemic.

How COVID-19 has affected small businesses

Small business owners are at a disadvantage in this crumbling financial system right now. Local businesses in Maine have been impacted by the economic downturn so much that they worry about how they are going to pay rent. Companies around Maine received relief from federal and state programs.

In regards to setting up payment plans with landlords, they are on their own. Arcadia National Bar, a bar and arcade place in Portland, Maine, is one example. Dave Aceto, co-proprietor of Arcadia National Bar, stated that their landlords said we do not know what the future holds, so let us work together as a team and figure this thing out.

Summer Allen, the owner of Valentine Footwear, expressed that she and her landlords have worked out the details surrounding rent in the early stages of the pandemic. “She says that’s not a universal experience,” stated Allen.

Peter Harrington, a longtime commercial broker in Portland, conceded that the global crisis had speeded up the closing of businesses, “and some less-harmonious, or profitable, landlord-tenant relationships.” This means that property owners must deal with the tenants that they have because no one is looking for a vacated building.

Another example of the trickle-down effect of the coronavirus is in the city of  La Conner, WA. Close to nine companies in La Conner, WA, are permanently closed. That is about 10% of La Conner’s business. Skagit Valley Tulip Festival, an annual event each spring, was canceled this year. The Canada-U.S. border attracts many patrons to the small town who contribute to the local economy of La Conner has been infinitely closed. These closures are affecting people, as is the case with Rebecca Strong, who owns Lux Art Center. She was finally getting her business going when the pandemic halted further development of her business

“I just feel like the streets are rolled up, and the tumbleweeds are coming in,” replied Strong to King 5.

Immigrants face the greatest risk

Immigrants, most of whom are farmer workers, have the steepest hill to climb. “In San Joaquin and other rural counties, these workers often live in spaces not meant for human habitation— basement rooms with metal-grilled vents for windows, trailers parked on dirt roads that don’t exist on official maps,” said Anita Chabria, staff writer for the Los Angeles Times.

With no strict rules in place, the coronavirus can quickly spread around, especially since farmworkers usually stay in rooms that are occupied by at least 24 people. In effect, an unsafe work environment can damage the economy a little more by having fewer field workers and deserting the freshly grown food to decay. Consequently, this will hurt the economy in California.

Raul Hinojosa-Ojeda, an associate professor of Chicana and Chicano Studies at UCLA, implied in his statement that immigrants are on the receiving end of unfair treatment from a moral and economic perspective.

In Skagit County, Washington, Families Unidas for Justicia and United Farm Workers of America, two labor advocacy groups, were waging a labor war with WA State labor and health departments to impose distancing in farm labor housing and transportation. Andrea Schmitt, the labor group’s lawyer, said they understand that the workers in the field worry about retribution if they voice their concerns about safety and health. This is concerning to hear that people must fight for their human rights during the global crisis.

Workers in the San Joaquin area do not have access to unemployment or any other resources. Also, they have not received the 12,00 relief check that other families, due to citizen status. In April, Gavin Newsome, governor of California, distributed 75 million in state funds, which 1,000 dollars would be given to 150,000 illegal immigrants. They also fear that their citizenship status will be used against them once the eviction moratorium is lifted, which would have ended on September 1, but Gavin Newsom, Governor of California, signed a bill safeguarding millions of Californians from eviction.

The impact on restaurants and workers

 The slow downward spiral of the economy has hit the doors of the restaurant industry. In a report done by Yelp, there is a correlation with the highest increase in COVID-19 cases occurring in June and the uptick in activities in May. In fact, “the ten states with the largest increase in COVID-19 cases in June all saw a significant increase (50%) in consumer interest in restaurants, bars, and nightlife, and gyms” the month before, reported by Yelp.

It is going to take time to get used to this unique and strange period while dining at restaurants. “Warming up to the idea but more than two-thirds say they still prefer cooking and eating at home out of concern about exposure to coronavirus,” stated Lisa Dennings, the executive editor at Nation’s Restaurant News and Restaurant Hospitality. From a survey done by AlixPartners, 44% remained at home to reduce human contact at restaurants compared to 49% in April. Adam Werner, an AlixPartners managing partner, said that patron feelings around delivery and takeout are changing. About 57% of customers are currently taking out food or getting it through delivery only once a week.

Happy business owner opening the door at a cafe wearing a facemask to avoid the spread of coronavirus – reopening after COVID-19 concepts

How will this affect workers? Jaime Wilson, a restaurant worker at Peete’s Cafe, which is located in Brooklyn, wrote an opinion piece for Grubstreet about the daily struggles that restaurant workers have endured during COVID. He stated that this rapidly moving virus has made working in restaurants unbearable.

 Wilson expressed that hourly pay rates were not livable wages pre-COVID. COVID has added another worry for workers like Wilson. “Many of us also risk unexpected days off due to weather conditions, or even another temporary closure if just one staff member calls out or tests positive for COVID-19,” stated Wilson.

It was made obvious by Wilson that restaurants and bars are open again because there is a need to gain some sense of normalcy back, but it is not. Wilson remarked that “due to the loss of supplemental unemployment benefits and a continued lack of government aid, the choices for restaurants and their employees remain extremely limited: reopen despite the risks, or risk closing permanently.”

What does the future hold for restaurants? Restaurants may have to do a complete overhaul of their business structure. Some major findings were clear and honest communication, being extra creative, and online marketing of your restaurant. These discoveries were made by Amanda Retzer, Content Marketing Manager for Yelp.  “A lot of these companies like DoorDash and UberEats offer ways to market your restaurant and [put together] any type of promotion, so we really shifted our marketing dollars there over the past few months,” said Pesce, Director for Marketing for Yolk, a 15 restaurant business based in three regions.

There appears to be a glimmer of hope. The hospitality industry, including restaurants and bars, was leading “the nonfarm sector of the economy in rehiring during July,” stated Peter Romero, Editor at Large, at Restaurant Business Online. Restaurants and bars make up 28% of the jobs available.

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