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More restaurants paid April rent, but minority-owned businesses still lag behind
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With warmer weather and vaccination eligibility opening up, more people are inclined to dine out. And there’s some optimism in the restaurant industry, at least among eateries still in business.
A new poll from Alignable, which tracks small businesses, shows that the number of restaurants that didn’t pay rent in April was down to 35% from 63% the month before. But the data also shows minority business owners are still lagging behind.
There are a few ways restaurants can pad their businesses when they’re strapped for cash, by paring down the menu or cutting staff. But rent is a must.
“Seeing the increase in the ability to pay rent is definitely a big data point,” said Alex Susskind, director of the Cornell Institute of Food and Beverage Management. “It’s showing that this is turning for the better.”
Susskind attributes most of the improvement to vaccines and people feeling more comfortable eating out, because when you dine in person, you eat and drink more.
“And that’s more margin for the operators, that’s higher check averages for the operators,” he said. “And those are things they they need to get back to normal.”
For minority business owners, getting back to normal is still far away. More than half weren’t able to pay rent this month.
Laurie Thomas, executive director the Golden Gate Restaurant Association, said unfortunately that doesn’t surprise her. She said immigrant business owners in San Francisco had trouble understanding PPP loan information and had less access to banks to file applications. And now, minorities lag behind in vaccination rates, an essential part of keeping businesses running.
Thomas said some business owners worried about having to disclose their immigration status to get the vaccine. “We worked with the city to ensure that people did not have to have American passports or driver’s licenses.”
Geetika Agrawal at La Cocina, a restaurant incubator that works with women of color, said some of the delay in recovery for minority business owners is cultural.
“I have to tell you how hard it was for most entrepreneurs to even feel comfortable having to tell their landlord they can’t make rent,” Agrawal said, or having to ask for rent abatement. “They don’t have the luxury of trying to risk not making rent. And so that’s tough. It’s a different type of privilege than somebody else who’s maybe used to being able to know that the society will let them fail and catch them.”
The Restaurant Revitalization Fund, part of the American Rescue Plan Act, may catch more of them. In its first 21 days, the program will prioritize businesses owned by women, veterans and people who are socially or economically disadvantaged.
COVID-19 Economy FAQs
Millions of Americans are unemployed, but businesses say they are having trouble hiring. Why?
This economic crisis is unusual compared to traditional recessions, according to Daniel Zhao, senior economist with Glassdoor. “Many workers are still sitting out of the labor force because of health concerns or child care needs, and that makes it tough to find workers regardless of what you’re doing with wages or benefits,” Zhao said. “An extra dollar an hour isn’t going to make a cashier with preexisting conditions feel that it’s safe to return to work.” This can be seen in the restaurant industry: Some workers have quit or are reluctant to apply because of COVID-19 concerns, low pay, meager benefits and the stress that comes with a fast-paced, demanding job. Restaurants have been willing to offer signing bonuses and temporary wage increases. One McDonald’s is even paying people $50 just to interview.
Could waiving patents increase the global supply of COVID-19 vaccines?
India and South Africa have introduced a proposal to temporarily suspend patents on COVID-19 vaccines. Backers of the plan say it would increase the supply of vaccines around the world by allowing more countries to produce them. Skeptics say it’s not that simple. There’s now enough supply in the U.S that any adult who wants a shot should be able to get one soon. That reality is years away for most other countries. More than 100 countries have backed the proposal to temporarily waive COVID-19 vaccine patents. The U.S isn’t one of them, but the White House has said it’s considering the idea.
Can businesses deny you entry if you don’t have a vaccine passport?
As more Americans get vaccinated against COVID-19 and the economy begins reopening, some businesses are requiring proof of vaccination to enter their premises. The concept of a vaccine passport has raised ethical questions about data privacy and potential discrimination against the unvaccinated. However, legal experts say businesses have the right to deny entrance to those who can’t show proof.
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