State comptroller releases report on restaurant industry
by Benjamin Fang
Oct 07, 2020 | 3240 views | 0 0 comments | 169 169 recommendations | email to a friend | print
A new report released by State Comptroller Thomas DiNapoli last week projected that between one-third and one-half of New York City’s bars and restaurants could close permanently over the next six months.

If just one-third of establishments shutter, the city would lose nearly 8,000 eateries and 106,000 jobs, the audit found. If the closures rise to 50 percent, nearly 12,000 bars and restaurants would close their doors, costing the city almost 159,000 jobs.

DiNapoli released the report last Thursday in Jackson Heights alongside business owners and local lawmakers. He said in a statement that the city’s bars and restaurants are “the lifeblood of our neighborhoods.”

“The industry is challenging under the best of circumstances and many eateries operate on tight margins,” he said. “Now they face an unprecedented upheaval that may cause many establishments to close forever.”

According to the report, in 2019 New York City’s restaurant industry had 23,650 establishments, provided 317,800 jobs, paid $10.7 billion in total wages and made nearly $27 billion in taxable sales. The industry accounted for about one in 12 private sector jobs and establishments citywide.

Between 2009 and 2019, jobs in the industry grew by 61 percent while establishments grew by 44 percent, which the comptroller noted was double the overall rate of growth.

This past February, more than 315,000 people worked in the restaurant industry. But by April, one month into the COVID-19 pandemic, that number dropped to 91,000 as the state imposed restrictions on restaurants and other businesses.

Revenues at New York City bars took a nosedive, falling by 94 percent on March 22 and again on April 26. Taxable sales, as reported by the state’s Department of Taxation and Finance, fell by 71 percent in March, April and May, compared to one year earlier.

By August, employment in the restaurant industry was still only at 55 percent of its level in February, the month before the pandemic struck.

DiNapoli’s report noted that restaurants began exploring new business models to generate revenue, from offering takeout and delivery to selling do-it-yourself kits to customers.

In June, the city began its Open Restaurants program, which gave restaurants and customers a new possibility: outdoor dining. Last month, Mayor Bill de Blasio announced that the program would become permanent and year-round.

As a result of these changs, credit card payments at Open Restaurants participants increased, according to the audit. By the second half of August, restaurants were only 12.4 percent below what they were a year ago, and bars were down 23 percent.

Outdoor dining, as well as the phased reopening of the economy, led to restaurant employment rising to 174,000 jobs in August.

“It’s important that the state and city continue to be creative and bolster the industry,” DiNapoli said. “The city’s decision to extend outdoor dining year-round to help keep restaurants afloat is a step in the right direction along with the opening for indoor dining.”

The comptroller’s audit also studied the makeup of New York City’s restaurant industry. More than 60 percent of restaurant workers were immigrants in 2018, compared to 45 percent across all occupations. In 16 neighborhoods, including parts of Queens, Brooklyn and the Bronx, the share is between 70 and 90 percent.

The report also found that as of 2018, 44 percent of the city’s residents working in the industry were Hispanic, while 20 percent were Asian, which is higher than overall employment shares. Lawmakers noted that restaurant closures would disproportionately impact immigrant workers and the neighborhoods where they live.

“Our local restaurants are the backbone of this community and without a viable reopening plan, we risk losing so many jobs, as well as the vibrant character of our neighborhood,” Assemblywoman Catalina Cruz said in a statement. “The state must do everything in its power to ensure our small businesses survive beyond the pandemic.”

Tom Grech, president and CEO of the Queens Chamber of Commerce, said in a statement that the borough’s 6,000 restaurants are the backbone of the local economy, creating jobs and entrepreneurship opportunities for New Yorkers.

“Outdoor dining has been a help, and we’re excited for the return of indoor dining,” Grech said, “but without further action, many of our cherished neighborhood institutions will close for good.”

Andrew Rigie, executive director of the NYC Hospitality Alliance, called the new report “shocking,” noting that the data confirms the economic devastation that the coronavirus pandemic has inflicted on small businesses.

“The comptroller’s report sends a critical message that must be heard by policymakers and New Yorkers at large,” he said, “which is that in order to save our city’s greater economy, our restaurant industry must be at the core of its recovery.

“While we are appreciative of the government actions taken so far to support our restaurant community and the hundreds of thousands of people it employs,” Rigie added, “many more policies must be enacted by all levels of government to help save these small businesses and our economy.”
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