Photo by James Yarema on Unsplash

The Real Outrage is Not that Ruth’s Chris Got Federal Money.

David Rolf
3 min readApr 23, 2020


The outrage is that workers are still getting laid off.

Were you outraged that big companies like Ruth’s Chris Steak House and Shake Shack got multi-million-dollar loans from the federal government while some small businesses had to wait? If I were a worker at Shake Shack, I’d welcome the federal money if it meant I kept getting paid.

Congress seems poised to put another $320 billion into the Paycheck Protection Program, which incentivizes businesses to keep people on payrolls. The loans can only be used for payroll, health benefits and for a few core operating costs: rent; utilities; mortgage interest. If the company meets those requirements, the loans are forgiven. The loans are restricted to companies with fewer than 500 employees, but the restaurant and hotel lobbies won a provision that allows subsidiaries and locations with less than 500 employees to qualify.

If our goal is to keep as many Americans working as possible, doesn’t it make sense that all companies — including the companies with the biggest payrolls, and not only those with clever lobbyists or close allies in Congress — should be eligible? After all, 48% of workers work for employers with 500 or more employees.

A big problem, of course, is that Congress did not sufficiently fund the Paycheck Protection Program to cover both small business and big companies. And it’s true that many big companies, unlike small businesses, don’t need the federal cash to survive. But as Derek Thompson argues in The Atlantic, for workers relying on a paycheck, that misses the point. The big restaurant and hotel chains are not going to keep people on payroll when they have no work to do, no matter how much cash they have in the bank. Not surprisingly, restaurant workers accounted for 60% of all of the people who filed for unemployment in March.

The real outrage is not in the Paycheck Protection Program. The real outrage is that, of the $500 billion in loans the CARES Act targeted for big business, only 9% — the $46 billion for the airlines — is conditioned on keeping people working. Every dollar of federal COVID relief for businesses of all sizes should be tied to payroll. After all, the point of taxpayer relief isn’t to extend the ability of companies to buy back shares, over-leverage their balance sheets, over-compensate their CEOs, or offshore jobs. The point is to preserve payrolls so hard-working Americans have jobs to return to, the ability to spend and save again once the economy reopens, and the ability to survive in the meantime. That way the busboy at Ruth’s Chris and the beautician at Ruth’s Cuts can both keep paying the rent and putting food on the table. And we can stop the COVID recession from collapsing into a COVID depression.

A few pieces I read that resonated with me this week:

“We Need a More Resilient Economy,” New York Times

“Young people are being left out of Coronavirus relief efforts. That could be a big problem.” Washington Post

“Who Has Enough Cash to Get Through the Coronavirus Crisis?” New York Times

Stay safe and healthy!