New York State Comptroller Calls for Federal Support of NYC’s Restaurant Industry

October 9, 2020 by Reece Nations
A New York Restaurant. (Photo by Dan McCue)

ALBANY, N.Y. – New York State Comptroller Thomas DiNapoli’s office has released a report indicating employment in New York City’s restaurant industry fell from 317,800 jobs to only 91,000 jobs after pandemic-related restrictions were imposed on businesses.

While the industry once accounted for $10.7 billion in total wages and $27 billion in taxable sales citywide, both of these metrics have since cratered from the coronavirus pandemic’s lasting effects, according to the report. Compared to just a year earlier, taxable sales for the city’s restaurant industry had fallen by 71% during March, April and May.

“New York City’s bars and restaurants are the lifeblood of our neighborhoods,” DiNapoli said in a statement. “The industry is challenging under the best of circumstances and many eateries operate on tight margins. Now they face an unprecedented upheaval that may cause many establishments to close forever.”

DiNapoli continued, “Restaurants reflect our diversity, employing tens of thousands of immigrants and providing a range of options fitting for a world-class metropolis. It’s important that the state and city continue to be creative and bolster the industry. The city’s decision to extend outdoor dining year-round to help keep restaurants afloat is a step in the right direction along with opening for indoor dining.”

Bridging the “economic-activity gap” should be a priority for the federal government since the discontinuation of the Paycheck Protection Program on Aug. 8, DiNapoli said in a press release. 

Currently, he said the federal government is not providing enough financial support for the city’s small businesses.

New York’s foodservice industry accounted for around one in 12 private-sector jobs and establishments citywide in 2019, according to the report. The majority of these restaurants are considered small businesses, and around 80% of them have fewer than 20 employees.

Over 60% of New York City’s restaurant workers were immigrants in 2018, compared to roughly 45% across all other occupations citywide. Hispanics made up the largest share of restaurant workers, including both immigrants and native-born residents, at 44%.

Restaurant closures have a disproportionate effect on immigrant workers for this reason, DiNapoli said. In 16 neighborhoods, the total amount of immigrant food service industry employees was between 70% and 90%. 

“We applaud Comptroller DiNapoli for using data to help illustrate the dire state the restaurant industry finds itself in,” Melissa Autilio Fleischut, president and CEO of the New York State Restaurant Association, said in a statement. “This report mirrors the findings from our own surveys of restaurateurs. And the numbers don’t lie. Many in the industry are on life support and barring government assistance, a majority of restaurants may face closure by year’s end.” 

Fleischut continued, “This is a critical time for the culinary capital of the world and hopefully initiatives like expanded outdoor dining and the reopening of indoor dining can turn around the fortunes of our operators, both big and small.”

In June, New York City began the “Open Restaurant program,” which granted special roadway and sidewalk permits to restaurants, according to the report. The city would later expand the program, allowing restaurants to set up dining spaces in traffic-free streets. 

On Sept. 25, New York City Mayor Bill DeBlasio announced that he would extend the program year-round and permanently in some cases. Forty-three percent of restaurants and bars citywide had received sidewalk or roadway seating permits as of the first week of September.

Restaurants in the city opened for indoor dining on Sept. 30, albeit with restrictions still in place. Restaurant occupancy cannot exceed 25%, temperature checks are required for all patrons, masks are required to be worn when not seated and contact-tracing information must be left at the establishment for a member of each party.

“New York City’s restaurant industry is vital to our economy and Comptroller DiNapoli’s shocking new report confirms with data the economic devastation that COVID-19 has inflicted on these vital small businesses,” Andrew Rigie, executive director of the NYC Hospitality Alliance, said in a statement. “The Comptroller’s report sends a critical message that must be heard by policy makers [sic] and New Yorkers at large, which is, that in order to save our city’s greater economy, our restaurant industry must be at the core of its recovery.” 

Rigie continued, “While we are appreciative of the government actions taken so far to support our restaurant community and the hundreds of thousands of people it employs, many more policies must be enacted by all levels of government to help save these small businesses and our economy.” 

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