With America struggling to get the coronavirus under control and Washington deadlocked over new relief measures, states face a difficult choice: open the businesses most likely to spread the coronavirus, especially bars and restaurants, or keep them closed and risk a wave of bankruptcies.
Public health officials, including Drs. Anthony Fauci and Deborah Birx, have blamed indoor dining, drinking and social events for seeding summer outbreaks. Because the virus is transmitted mainly by airborne droplets, places like bars — where people may be packed closely together, speaking loudly and often feeling less inhibited — are at particular risk of spreading infection.
Arizona, which had a big spike in the number of infections this summer, shuttered bars and nightclubs in June, a move credited, along with increased mask usage, with helping bring things back under control. In late August, Iowa partly closed down bars in six counties in response to a major spike in the number of cases among young adults.
Many public health experts have called for continuing restrictions on bars, indoor dining, gyms, theaters and other enclosed spaces — either by closing them or by sharply limiting attendance — to further curb the rate of infection and to prioritize reopening K-12 schools. But doing so could drive thousands of such establishments out of business for good.
“I’d love for everything to be open, but I think we can all agree sending our kids to school is more fundamental to our society functioning than bars,” said Malia Jones, an epidemiologist at the University of Wisconsin. “There should be a stimulus package for businesses that are suffering. Some of them are going to be closed for a long time, I think.”
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Saving bars and other indoor businesses while keeping them at least partly closed would likely require a focused national strategy and a large infusion of aid. Such relief may be especially important now, because the coming winter cold is likely to put new pressure on public health and owners’ bottom lines by making it harder to eat, drink and gather outside.
College towns also face crushes of returning young adults, whose behavior — often at bars — has been associated with outbreaks at some large universities.
While some industries have started to bounce back, jobs are down by 25 percent from their pre-pandemic peak in leisure and hospitality, a category that includes bars, restaurants, theaters and hotels.
Not coincidentally, the sector faces some of the tightest government rules: Eighteen states have closed all or most bars, according to the Kaiser Family Foundation, and they face additional restrictions at the state and local levels in many other places.
So far, there’s little sign that help is coming, however.
The White House and Congress are deadlocked over new relief measures, and current programs are running out. President Donald Trump has often contradicted his own experts by urging states to reopen more quickly across the board, showing little interest in approaches that make finer distinctions between different types of businesses and institutions.
In a campaign visit to Pennsylvania last week, Trump called restrictions on restaurants a “disgrace” and baselessly linked them to a conspiracy to hurt his re-election campaign, even as guidelines from the Centers for Disease Control and Prevention caution that indoor dining presents risks and as Birx praised the state’s cautious approach to reopening this month.
“They’re doing it for political reasons, because they want our numbers to look as bad as possible going into Nov. 3rd, Election Day,” Trump said. “Then, as soon as the election’s over with, win, lose or draw for them, they’re going to open it.”
In fact, leaders often face pressure to open more quickly. In New Jersey, where cases currently are low, Gov. Phil Murphy is reopening indoor bars and restaurants at partial capacity even as he cautions that there’s “no question” that diners are better off staying outside. Part of the reason: Businesses may not survive otherwise, especially small establishments without reserves of corporate cash to draw on.
“Our restaurant industry’s been crushed. They deserve this,” Murphy said on MSNBC last week.
In New York, Gov. Andrew Cuomo announced Wednesday that indoor dining would return to New York City this month at 25 percent capacity. The New York State Restaurant Association said a survey of its members found that close to two-thirds could close by the end of the year without government aid. Both Cuomo and Murphy are Democrats.
Bar owners in Texas, where the governor ordered mass closings in June to confront rising infections, have held protests in recent weeks, with some warning that they’re on the verge of financial collapse.
It doesn’t have to be that way. Economists, trade groups and many lawmakers in both parties argue that Congress and the White House need to send a big infusion of aid directly to businesses and institutions that are the hardest to safely reopen in order to prevent permanent economic damage.
Members of Congress have proposed a variety of bills to provide loans or grants to those industries. In the House, the Restaurants Act would provide $120 billion in grants to independent restaurants and bars — rather than large chains — to make up for lost revenue this year. It has 188 co-sponsors so far, including five Republicans. A companion bill in the Senate, co-sponsored by Mississippi Republican Roger Wicker and Arizona Democrat Kyrsten Sinema, has 27 sponsors, including support from Democratic leader Chuck Schumer of New York.
“Trump is always yammering and pushing to move it faster, and I know from my own experience that state and local authorities feel like they’re caught in the middle,” said Rep. Earl Blumenauer, D-Ore., a lead sponsor of the House bill.
By providing flexible grants to restaurants and bars to make up income lost to restrictions, Blumenauer said, “there wouldn’t be quite so much pressure to move prematurely.”
Trade groups for bars and restaurants are calling for aid to help cope with losses related to pandemic regulations. John Bodnovitch, executive director of American Beverage Licensees, an industry trade group, said bars face pressure not only from diminished business but also from shifting government mandates in response to new outbreaks, which make it hard to make decisions about hiring and inventory.
“The unknown is the toughest part,” Bodnovitch said. “If there are going to be widespread shutdowns or restrictions on businesses, there needs to be aid and assistance they can point to and say, ‘We have to close you down, but we’ll work to make sure you have a lifeline moving forward.'”
A separate bill to prop up independent live music venues has backing from prominent senators in both parties, including Democrat Amy Klobuchar of Minnesota and Republican John Cornyn of Texas.
Congress last spring passed the Paycheck Protection Plan, which provided grants and loans to small businesses, and it’s likely that any new bipartisan relief bill that passes would include a new round of funding. But advocates for further aid argue that businesses need more flexibility than the program provided.
The loan program was designed chiefly to keep workers on the payroll. But as indoor businesses like bars face potentially months of further closings or restrictions, some economists and trade groups argue that owners need to be able to put more federal relief money toward rent, new safety measures and surviving prolonged drop-offs in customers.
“The next phase of relief should be more targeted to focus on parts of the economy that are struggling,” said Adam Ozimek, chief economist at Upwork, a platform for freelance workers. “In the long run, for employment to bounce back quickly we need a lot of businesses to make it through this.”
Ozimek has seen the effects of the pandemic and its accompanying safety restrictions up close: In addition to his work analyzing the recovery, he also owns a restaurant in Pennsylvania. While he’s managed to set up new outdoor dining spaces and tailor the menu toward takeout, he estimates that revenue is still only one-fifth of what it was before the pandemic.
“The vast majority of restaurants are losing cash right now,” he said.
The economy, despite adding jobs every month, is still in a fragile place. About 29 million Americans are receiving unemployment or related benefits since the pandemic struck last winter, including more than 800,000 who filed just this week. According to Yelp, over 80,000 businesses have shut down permanently.
Even with aid, the damage may still be severe. Ozimek recommended providing businesses with low-interest loans rather than grants to help distinguish between those that have plans to stay afloat and those that are unlikely to ever recover.