California Shutdown Is Causing Restaurants And Other Businesses To Struggle Greatly

After California began their second statewide shutdown a multitude of businesses immediately feared what the future would hold.

After an intense second-wave of Covid-19 infections, California Governor Gavin Newsom shutdown the state with measures that yet again restricted a multitude of businesses and restaurants from making an income. This comes after weeks of restaurants investing the little profit they’ve been making this year to construct outdoor dining facilities that would make socially distanced eating possible. 

“It is tragic” says Laurie Thomas who owns a new upscale Mediterranean restaurant in San Francisco, Terzo. Thomas is also the head of the Golden Gate Restaurant Association, and she recently spoke with the local media about how San Francisco is already gearing up for hundreds of restaurants to shut down, leaving thousands of California residents unemployed. 85% of all bars and restaurants have closed already, and while it makes sense for these public settings to be closed to curb the spread of the coronavirus, without any financial assistance from the government these businesses have little to no chance of survival. 

The statewide stat-at-home order is due to the fact that a majority of California hospitals are reaching maximum capacity with a dwindling amount of doctors and nurses available due to individuals getting sick. In California alone 1.5 million individuals have contracted the virus and 20,500 have died. 

“The new restrictions will have a major economic toll. That impact is bound to exacerbate an already towering wealth gap between the state’s rich and poor.”

During its first shutdown California’s unemployment rate increased from 5.5% all the way to 16.4%, shattering records; more than 2.6 million people have lost their job in the state. Initially the state passed a federally funded $2.2 trillion stimulus package that gave every individual who filed for unemployment an additional $600-a-week, as well as an eviction moratorium which prevented individuals from being evicted over failure to pay rent. 

That stimulus program expired over the summer when the restrictions became much looser, and the eviction moratorium will expire at the end of the year. As of right now there’s little to no hope for a second stimulus package, especially considering the fact that the federal government can’t even come to a consensus over what to give the hundreds of millions of Americans struggling right now. 

Mark Duggan, a director at the Stanford Institute for Economic Policy Research, recently spoke with the press about how once the pandemic is over, the millions of individuals who lost their jobs throughout the country still will struggle to find work: “There have been some winners but many more losers from this pandemic economically. The scarring effects are going to be real, it’s amplifying inequalities and a hell of a lot of people in California, and America, are really struggling.” 

“Minority-owned establishments are being  disproportionately affected. Roughly 36% of immigrant-owned businesses have already gone under.”

Close to half of all California small businesses are currently at risk of shutting down completely, according to a report published by Duggan’s group. Restaurants, as we’ve seen, are having the hardest time staying open. California is the second-worst state in terms of restaurant closings, Hawaii is number one, and according to an analysis from the National Restaurant Association, 43% of California restaurants will not survive the pandemic. 

Thomas, owner of Terzo, claims that she had to let go 52 employees last week when the restaurant was officially forced to shut down for the second time. Only five members of her staff have returned and they’re only there to help her run her second restaurant for it’s bare-minimum take-out options that many restaurants are opting for to remain afloat. “I support the state’s attempts to contain the virus, but we just cost people who are living paycheck to paycheck two to four weeks of critically needed compensation.”

Alissa Anderson, a senior policy analyst at the nonpartisan California Budget and Policy Center, recently discussed how America is “very deep into the worst recession in generations.” California currently has 1.5 million unemployed residents, which is more than what the state lost during the great recession nearly a decade ago. 

“Black and Latino workers, especially women, have been most affected because they have been historically segregated into the low-paying service industries that had to shut down. It is important to view the pandemic and the recession through the racial disparities that we saw even before the crisis hit.” 

With the distribution of Pfizer’s Covid-19 vaccine there is hope for these businesses in 2021, however, they will need to survive the rest of this pandemic first, and without any further financial assistance from the state and federal government, that will be extremely difficult.