SACRAMENTO (AP) – Nearly a third of restaurants in California have closed permanently, and two-thirds of workers have lost their jobs, at least temporarily, when the pandemic hit more than a year ago. Governor Gavin Newsom imposed the country’s first nationwide lockdown, a legislative committee reported Tuesday.
Few businesses were harder hit than hospitality, which included more than 76,000 food and drink establishments with 1.8 million employees prior to the pandemic, according to the California Restaurant Association.
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But with the shutdown, up to a million of those workers were quickly put on leave or laid off, the association told the Senate’s Special Committee on Pandemic Emergency Measures.
“COVID-19 has changed all of our lives, but its effects are being felt more clearly in the restaurant industry,” said Democratic Senator Josh Newman, who chaired the committee and chaired the hearing on the matter. “It is clear that the recovery will take time.”
Employment in restaurants is still a quarter down from the pandemic, according to the latest figures from the state’s Department of Employment Development.
Industry leaders fear that a labor shortage could close more businesses when the economy reopens.
The state initially closed non-essential stores, but did allow grocery businesses to continue offering take-away meals. The color-coded tier system to reopen the economy later allowed restaurants to offer outdoor or indoor seating at various levels of capacity as coronavirus cases subsided.
With infections dwindling, vaccinations increasing, and a positivity rate of less than 1%, California is well on its way to lifting most of the remaining restrictions on June 15, according to official figures.
However, many restaurants are having difficulty serving customers who are already admitted below current capacity limits due to staff shortages, the committee said.
Potential employees could potentially make ends meet if they make ends meet with unemployment and government incentives instead of going back to work, the report said. Some may fear their safety during the pandemic, while others want “more stable career paths” after repeated vacations.
“Right now, we are only at the beginning of this crisis,” said Matthew Sutton, senior vice president of government affairs and public order for the California Restaurant Association. Unspecified, he said lawmakers may want to use part of the state’s massive budget surplus to create an incentive program for workers to return to work.
The industry is expected to recover at some point, the restaurant association reported, creating an additional 160,000 jobs by 2029, bringing the total to nearly 2 million across the state.
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“We look forward to going back to it, but it will be a few years,” said Sutton. Meanwhile, he said restaurants need to recover from the loss of income while their fixed costs like rent and insurance persist.
The abrupt shutdown orders from health officials did not give restaurant owners time to cut jobs or distribute the food, drink and other supplies they had just acquired, Sutton and other witnesses said at the hearing.
“Restaurant closings are literally reverberating into the ground,” he said, affecting a wide segment of the economy, including food companies. Many facilities were not designed to have a take-out model, but most tried to adapt anyway “to keep their doors open to some extent” and to keep some staff working.
In hindsight, the state lacked evidence to back up its decision to close outdoor restaurants, and that rationale was “not effectively communicated,” said Dr. Matt Willis, Marin County Health Officer.
“Even with no specific knowledge … I think this is an area we could have done better,” Willis said, although he said the evidence of virus transmission while eating indoors was much clearer.
Since health officials did not have time to collect data on the risk of transmission from outdoor contact, they had to act to the best of their ability at this point, but now they understand that the risk of outdoor transmission is low, Willis said and the California Conference of Directors by Environmental Health Executive Director Justin Malan.
“We may not have the right answers … but remember, this was a novel coronavirus,” Malan said. “We didn’t have a blueprint for how to respond.”
The restaurants said they quickly adapted to a new business model during the pandemic, with the help of the state Department of Alcohol Control, which was also tasked with inspecting the facilities to ensure they were complying with the pandemic rules.
They could offer roadside or free off-site delivery, expand into outdoor areas such as patios, sidewalks, parking lots, or closed streets with local approval, and sell alcoholic beverages to be consumed off-site or with take-away groceries. The state waived two year license renewal fees for eligible companies.
Aside from safety measures such as masks, increased hygiene measures, preventive medical examinations for employees and physical distancing, restaurants have introduced one-way menus or customers that they could display on their smartphones and switched to the provision of cutlery rolled up in napkins.
Sutton said the improvements to indoor airflow and filtration will be long-term, and restaurants want to be able to maintain their expanded outdoor dining options as well.
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