Restaurants urging $60B relief bill amid industry job losses

Erika Polmar, Executive Director of the Independent Restaurant Coalition, joins Yahoo Finance to discuss the report on local restaurants urging $60 Billion Refill of SBA Grant Program as the industry loses jobs for the first time in eight months and the outlook for the restaurant industry.

Video Transcript

ALEXIS CHRISTOFOROUS: Many COVID-related restrictions may have been lifted, but that doesn't seem to be helping the battered restaurant industry. Last week's disappointing jobs report showed the restaurant and bar industry actually lost jobs for the first time in eight months in August, and the overall industry is still roughly a million jobs below its pre-pandemic levels.

My next guest says the restaurant industry needs another round of government assistance, and fast. Erika Polmar is Executive Director of the Independent Restaurant Coalition. And Erika, it is good to see you again. Tell us specifically what these local restaurant owners are asking of the government right now.

ERIKA POLMAR: Thank you so much for having us today. The Restaurant Revitalization Fund was created as part of the American Rescue Plan, but it was only funded with $28.6 billion. So it helped tens of thousands of local businesses across the country. But unfortunately, it was only one third of the businesses who applied for assistance. There were over 270,000 applicants from struggling restaurants and bars, and only 100,000 received grants.

So we are simply asking that the fund be replenished. We heard when it was created, we heard Senator Schumer say, that the $28.6 billion was only a down payment. And it's time, in fact, it's past time to replenish the fund so that the hundreds of thousands that are in need of assistance can have some stability and get back to work.

ALEXIS CHRISTOFOROUS: Erika, it's one thing to replenish the fund. It's another to get those funds to the people who need them most. And we saw that one of the big flaws with the SBA grant program at the height of the pandemic was a lot of that money wasn't going to those small restaurant owners. What are you asking to be done differently this time so that doesn't happen again?

ERIKA POLMAR: We're very confident that the SBA has learned from their first experience distributing the fund and will correct errors so that the funds are distributed to the appropriate entities that are eligible and truly struggling and need assistance at this time.

ALEXIS CHRISTOFOROUS: Talk to me a little bit about why the restaurant industry is suffering so much and seemingly taking a couple of giant steps backward. Is it that the labor shortage is just too much for this industry to overcome? Is it that people are not coming out in droves and eating out at restaurants now with the Delta variant on the rise? What are some of the main reasons there?

ERIKA POLMAR: Well, we really-- it's a bit like having Groundhog Day. You know, we feel like we're going back to where we were in March 2020. With the rise of the Delta variant, we have seen more dining restrictions, and also a tremendous amount of consumer hesitancy. There have been a number of studies that have shown that consumers initially weren't thinking they were going to be going back out to dine until September. And they got thrown a monkey wrench, and now it feels even less safe for many folks to come out and dine.

Restaurants are also facing mountains and mountains of debt from 18 months of operating at limited capacity, sometimes being completely closed. And although they may have had a few busy weeks over the summer, that's just not enough to boost the industry out of the hole that the pandemic has created. So we need some support to recover from the past year and a half and navigate the uncertain months ahead and to deal with things like the increased costs of goods. As you know, the supply chain basically stopped, and it doesn't just turn right back on. So the costs of goods that restaurants need to operate is absolutely sky high.

ALEXIS CHRISTOFOROUS: Right. We are seeing inflation at all sorts of levels. And I know these restaurants don't want to necessarily have to raise prices, because that's going to deter consumers from coming back. Talk to me about how that has impacted their ability to raise wages and make these jobs more attractive to fill. I mean, we just keep hearing time and time again, especially on the show we brought on restaurant owners who say they simply cannot find the workers right now.

ERIKA POLMAR: You know, I think we see a wide number of reasons for restaurant employees not wanting to return to work or not being able to work. Certainly wage is a concern. But you have to look at the fact that our industry is one of the largest employers of single parents. And without things like child care, it's incredibly hard to go back to work in a restaurant.

The Restaurant Revitalization Fund would provide the foundation and stability for restaurant owners to be able to reevaluate their programs, possibly make staffing changes. And as you mentioned, there's only so much you can change menu pricing before you lose the consumers and you end up in this horrible cycle of not being able to make the business work.

ALEXIS CHRISTOFOROUS: How many restaurants have we lost in this country, have just closed for good because of the pandemic, Erika?

ERIKA POLMAR: At the end of 2020, we had accounted for 90,000 businesses that had permanently closed. The Independent Restaurant Coalition has surveyed our members. And at this point, more than 80% of those surveyed said that if they don't receive a Restaurant Revitalization Fund grant they, too, will be in danger of closing.

ALEXIS CHRISTOFOROUS: It's a sad state of affairs. And yeah, we love our local restaurants, and we encourage folks to even take out, delivery, whatever you need to do to support those local restaurant owners. Erika Polmar, Executive Director of the Independent Restaurant Coalition, thanks for being with us. Best of luck.