The ‘Hurricane’ That’s Hitting the Service Industry
Danny Meyer, of Union Square Hospitality Group, on measures to help service workers during the coronavirus catastrophe.
As restaurants close en masse across the U.S. due to the coronavirus, service workers have been left with no way to pay their bills. Danny Meyer, of Union Square Hospitality Group, just laid off 80 percent of his company’s workforce. But he and others, like Sally Kohn, are stepping up to create relief funds. Contribute to Meyer’s fund by purchasing a USHG gift card, and please also consider supporting the One Fair Wage Emergency Fund. But first, read what Meyer has to say about what needs to happen for service workers and the restaurant industry, before it’s too late.
Wake-Up Call: As the coronavirus spurs mass closures — what’s exactly happening within the restaurant industry?
Danny Meyer: This is the bleakest moment our industry has ever seen. Restaurants, at their best, bring people together in a spirit of hospitality and community gathering. This is decimating the restaurant industry because it’s not safe to congregate with large numbers of people.
Furthermore, restaurants are food manufacturing places that rely upon human beings to handle food. And the very human beings who do that work are living in society just like everybody else. And other people in restaurants are being asked to clear plates and glasses and napkins from guests, and who knows what those might be carrying.
Why’d you decide to establish this fund and what kind of support have you gotten so far?
We were in the process of establishing a fund anyway. Sadly, every year, a few employees face some real hardship, like a flood or a house fire. And rather than trying to scrounge up a bake sale or something each time that happened, we decided it would be great to have a fund.
In the wake of the coronavirus, we fast tracked it to go through all the legal machinations. We’ve been incredibly grateful for the amount of our regular guests who have stepped up to help, as well as staff members: I’ve contributed my entire compensation to the fund, as did all of the C level leaders in our company. Many of the other members of our staff, who did not get laid off, asked to contribute as well.
Through March 24, we’re selling gift cards to our restaurant with 100% of the revenues being directed to this fund as well. And then in a very quick timeline: we’re establishing mechanisms so that the laid off employees can apply for the funding. Some might use it to extend their healthcare premiums, which we’re only able to pay through April 11th. Some might need it to pay their rent, or groceries, but one way or another — it feels good to have this in the works. We’re not sure what the government is planning just yet.
Speaking of the government, what needs to happen right now at the local and federal levels of government to help the workers and the industry as a whole?
We’ve got to keep the workers afloat. The day after we get the green light to be back in the business of serving people, we’re going to need to rehire people. And those people could not have been made insolvent in the meantime.
So none of us knows whether that’s three months from now, two months from now, five months from now. We just don’t know. So the question is what happens to these people? If I were in government, I’d be thinking about the restaurant workers. We laid off 2,000 people yesterday, and we are one small company in the scheme of what’s going on in this country. Next to the government, the restaurant and hospitality industry is the single largest employer there is. It may not seem that way — but unlike the airline industry or the automobile industry where there are a small number of players — there are thousands and thousands of independent restaurants. Sometimes people lose sight of the magnitude of the impact on our economy.
So I think the government needs to take action to come up with rent for people — so they’re not turned out of the place that they live. And I would come up with the cash for monthly needs, and I’d make sure that they have full health insurance. Now you have a healthy person who had a shelter, and was able to eat, and that increases the odds that by the time we get the green light to be back in business, we have a healthy workforce ready to come back to work.
What other types of relief are out there right now for service workers?
Really the main one I’m aware of right now is unemployment insurance, and even that varies municipality by municipality. And I know for a fact, just from anecdotal evidence, New York City has been completely overwhelmed.
There’s been this mass exodus from one industry. It’s almost as if this entire industry is a group of dock workers that were in an area that just got hit by a hurricane, and they cannot go back to work because the hurricane is raging. And so you could put $1,000 in their pocket, but they’re not going to go back to work. You have to make it safe for them to live at home until the hurricane blows by.
And then you’ve got to look at the restaurants themselves as being the beachfront property that got wiped out when the hurricane came through. Somehow, restaurants are going to need to get back on their feet because they are garnering no revenue but still have ongoing expenses. I think banks are going to have to be part of the solution. Landlords are going to have to be part of the solution because if these businesses don’t come back, you’re not going to have a tenant.
What can the average person do to help these service workers?
I know there’s a number of leaders in our industry who are looking to aggregate contributions. I think buying the gift card idea is a good one. We want to help our employees. Because at the end of this, I’m thinking about how we’ll be back in business and we’ll have gift cards in the hands of a lot of people. We’ll have done some good work for our employees and will be obligated to be serving a lot of free meals. I’m not sure what’s going to be left at that point, but that’s where this all starts.
What might we see happen to the industry in the long-term if we don’t act on this accordingly?
People will always eat and people will always want, in my opinion, some social experience with their eating. I don’t believe restaurants will become dinosaurs, but I will say that the classic model of the past few decades is going to change.
I really do believe that this is not the extinction of restaurants as we know it, but I promise you that some large percentage of the restaurants we know, will go out of business. And they will probably be replaced with more businesses that rely on delivery and takeout.
This appeared in Katie Couric’s Wake-Up Call. Subscribe here.