By Debra Russell and Jessica Tousignant
The lockdown was a necessary step in the fight against the coronavirus pandemic, but we couldn’t predict what it would mean for businesses. Restaurant owners didn’t know what to expect.
We were so grateful when Seattleites stepped up and supported us by ordering food for takeout. You were patient and generous as we built an entirely new business model. It was a bumpy transition, but you reminded us that we’re all in this together. Even now, your takeout orders are keeping many of us afloat.
But we can’t forget that our members who are hanging on are the lucky ones. One of the most frustrating aspects of the current economic downturn is that we don’t have enough data to understand exactly how bad things really are. It’s unclear how many neighborhood businesses have closed permanently since March.
The clearest overview of the economic impact on businesses nationwide arrived in a recent report from Yelp, which showed that of all the businesses that closed since March , about 61 percent have now closed permanently. That’s 97,966 businesses wiped out nationwide. Due to the customer-driven nature of Yelp’s reporting, this almost certainly represents an undercount—and in Washington, the numbers are likely even worse.
When ordinary people don’t have enough money to spend at local businesses, those businesses don’t make enough money to stay open.
The Yelp data confirms what we have suspected to be true: We’ve already lost half the businesses that had to temporarily close for lockdown, and the rest are imperiled. A majority of Seattle’s neighborhood restaurants will likely close by the end of the year.
Let’s be clear: this isn’t on our customers. They’ve done more than their part to keep us afloat. But the people and organizations who are supposed to use their resources and visibility to stand up for and protect small business have been entirely absent.
Local leaders claimed we should wait for the federal government to lead the way in the economic response to the pandemic. But the US Senate adjourned for vacation until September 8 without any agreement on a new stimulus plan. Since the additional $600-per-week unemployment benefits written into the last stimulus package were allowed to expire, some of our members report business has dropped by as much as 25 percent. When ordinary people don’t have enough money to spend at local businesses, those businesses don’t make enough money to stay open.
For years, powerful business interests like chambers of commerce, the Washington Hospitality Association, and others have used small businesses as a political football. Today, small businesses are shuttering around Seattle, people are losing their jobs, and these same organizations have quietly looked the other way.
The federal government told states and cities that they’re on their own, and local leaders have failed to step up to fill the void. Mayor Jenny Durkan, for instance, vetoed the expenditure of emergency funds—as though this economic collapse isn’t the biggest emergency most Seattleites have ever seen. (The city council subsequently overturned that veto, but Durkan’s budget would reallocate the money for other purposes.)
For years, powerful business interests like chambers of commerce, the Washington Hospitality Association, and others have used small businesses as a political football, threatening that restaurants would be forced to close if we raised the minimum wage, or if we passed paid sick leave, or if we raised overtime standards, or adopted secure scheduling procedures. Those threats were amplified by politicians and conservative media outlets who wanted to appear concerned about neighborhood businesses when they really just wanted to keep more money in the hands of the wealthy. Today, small businesses are shuttering around Seattle, people are losing their jobs, and these same organizations have quietly looked the other way.
Those powerful interests who wept and gnashed their teeth about the precarious state of small business in Seattle and elsewhere are nowhere to be found now—or at least, they’re too busy advocating for corporations and their wealthy friends to stand up on our behalf. That’s because organizations like the Association of Washington Business, the National Federation of Independent Business, and the Washington Hospitality Association know the policies we need run counter to their dogmatic anti-tax, anti-regulation, anti-government politics.
Seattle’s economic strength doesn’t come from the tech titans who command local headlines. Prosperity comes from the people, who spend their money in neighborhood small businesses.
Many of us have tried to hold on by our fingernails to avoid the permanent stain of bankruptcy, but we’re running out of options. The healthiest of us are doing 40 percent less in business than we were at this time last year, and that’s simply not enough to pay the bills. With PPP loans running out, customers’ stimulus checks long since spent, and no meaningful help from the federal government likely in the next few months, many of us are facing the reality that we can’t make it through the fall and winter.
Others called to cut funding to state relief programs, even though studies have proven that budget cuts prolong recessions and hamper recoveries.
If business groups truly cared about the small business community, they’d advocate to immediately fund direct support for both workers and small businesses—expanding cash aid to workers and families, providing a mechanism for rent relief, and tackling the unequal and upside-down tax burden that small business owners and our employees carry. They’d call on our leaders to find progressive sources of revenue in the state’s untapped wealth, so our poorest neighbors won’t take the brunt of the recovery.
At the state level, we need some form of rent relief to ensure that small businesses don’t lose everything. We need help restructuring lease agreements to take the realities of this crisis into account. We need insurance relief so we’re not paying huge amounts of money to cover the cost of empty dining rooms.
And we need financial support for workers across the state—our customers—so people have enough money to return to our establishments. Those who lost their jobs need to be able to participate in the economy so that there will still be an economy to employ them when this crisis has passed.
Those first floods of takeout orders back in March reminded us that Seattle’s economic strength doesn’t come from the tech titans who command local headlines. Prosperity comes from the people, who spend their money in neighborhood small businesses. Without that consumer spending, we’ll go out of business and our employees will be added to the rolls of the unemployed, creating a negative feedback loop that will leave the state trapped in a recession for years to come.
We’ve done what we can on our own. It’s time for our leaders to lead.
Debra Russell is the owner of Eve restaurant in Fremont. Jessica Tousignant is the executive director of Seattle Restaurants United.