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DiNapoli: Restaurant Industry Critical to New York City's Economy

Pandemic Threatens Future of Thousands of Restaurants and Bars
October 1, 2020

New York City’s restaurant industry had 23,650 establishments in 2019, provided 317,800 jobs, paid $10.7 billion in total wages citywide and delivered nearly $27 billion in taxable sales, but many restaurants and bars have closed or significantly reduced their operations because of the COVID-19 pandemic, leaving tens of thousands unemployed, according to a report released today by State Comptroller Thomas P. DiNapoli.

DiNapoli’s report found that in April, restaurant employment in New York City dropped to 91,000 jobs as restrictions were imposed on businesses. Taxable sales for the city’s restaurant industry also fell by 71 percent during March, April and May compared to a year earlier.

“New York 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. Now they face an unprecedented upheaval that may cause many establishments to close forever,” DiNapoli said. “Restaurants reflect our diversity, employing tens of thousands of immigrants and providing a range of options fitting for a world-class metropolis. It’s important that the state and city continue to be creative and bolster the industry. The city’s decision to extend outdoor dining year-round to help keep restaurants afloat is a step in the right direction along with opening for indoor dining.”

The restaurant industry accounted for about one in 12 private sector jobs and establishments citywide in 2019. The vast majority of the city’s restaurants and bars are small businesses, and most (80 percent) have fewer than 20 employees.

More than 60 percent of city resident restaurant workers were immigrants in 2018, compared to 45 percent across all occupations. In 16 neighborhoods, the share of restaurant workers that were immigrants was between 70 percent and 90 percent. Including both immigrants and native-born residents, Hispanics made up the largest share of restaurant workers (44 percent), while Asians accounted for 20 percent. DiNapoli said restaurant closures are likely to have a disproportionate impact on immigrants, and on the neighborhoods where a large number of restaurant workers live.

“The dire economic reality requires us to be more creative and innovative than ever before. It is a race against time, and on this road of recovery and rebuild in the midst of the ongoing pandemic, no stone may be left unturned,” said Queens Borough President Sharon Lee. “Queens thanks Comptroller DiNapoli for further illuminating the urgent facts — one of the most critical ways to keep families and communities afloat is by supporting some of our key economic drivers: our local restaurants and businesses in our neighborhoods.”

“Our local restaurants are the backbone of this community and without a viable re-opening plan, we risk losing so many jobs as well as the vibrant character of our neighborhood,” said Assemblywoman Catalina Cruz. “When COVID-19 emerged, our community was the first to be impacted and it continues to struggle to rebound from the financial impact of the shutdown. The state must do everything in its power to ensure our small businesses survive beyond the pandemic.”

"Queens' 6,000 restaurants not only contribute to the unique character of our neighborhoods, they are the backbone of our local economy, creating jobs and entrepreneurship opportunities for New Yorkers from all walks of life, in every corner of our borough,” said Thomas J. Grech, president and CEO of the Queens Chamber of Commerce. “The pandemic has devastated this industry, with thousands losing their jobs and many owners unable to pay rent. Outdoor dining has been a help, and we're excited for the return of indoor dining, but without further action, many of our cherished neighborhood institutions will close for good. We thank Comptroller DiNapoli for highlighting the importance of this industry to New York City.”

“We applaud Comptroller DiNapoli for using data to help illustrate the dire state the restaurant industry finds itself in,” said Melissa Autilio Fleischut, president and CEO of the New York State Restaurant Association. “This report mirrors the findings from our own surveys of restaurateurs. And the numbers don’t lie. Many in the industry are on life support and barring government assistance, a majority of restaurants may face closure by year’s end. This is a critical time for the culinary capital of the world and hopefully initiatives like expanded outdoor dining and the reopening of indoor dining can turn around the fortunes of our operators, both big and small.”

"It's no secret that the restaurant industry is suffering due to the COVID-19 pandemic," said Queens Tourism Council Director Rob MacKay. "The good news is that Queens has so many fantastic restaurants where diners can enjoy authentic, delicious cuisine from everywhere in the world. State Comptroller DiNapoli's new report is a big step in the right direction as it provides guidance as we reheat the food industry."

“New York City’s restaurant industry is vital to our economy and Comptroller DiNapoli’s shocking new report confirms with data the economic devastation that COVID-19 has inflicted on these vital small businesses,” said Andrew Rigie, executive director of the NYC Hospitality Alliance. “The Comptroller’s report sends a critical message that must be heard by policy makers and New Yorkers at large, 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, many more polices must be enacted by all levels of government to help save these small businesses and our economy.”

In June, the city started the Open Restaurant program, which issued special sidewalk and roadway permits to restaurants. The city soon expanded the program to allow restaurants to set up tables in the traffic-free streets. The mayor just announced that he extended the program year-round and has made it permanent. DiNapoli’s report found that this program and the phased reopening of the economy led to restaurant employment rising to 174,000 jobs in August.

As of the first week of September, a total of 43 percent of restaurants and bars citywide had received sidewalk or roadway seating permits. This included 50 percent of establishments in Manhattan, and more than 40 percent each of those in Brooklyn and Queens. The ratio of establishments in the Bronx and Staten Island were lowest at 30 percent and 20 percent, respectively.

Restaurants in the city opened for indoor dining on Sept. 30. Among other requirements, occupancy will be limited to 25 percent of capacity, temperature checks will be required of all guests, contact-tracing information must be left for one member of each party and masks must be worn when not seated at a table. Restaurants will also be required to close at midnight.

DiNapoli recommends that guidance provided to restaurant owners be easy to follow and change as public health conditions allow. New York City should also continue to support outdoor dining, commercial lease assistance and takeout and delivery operations. In addition, the availability of loan and grant funds, both directly from the city and through the facilitation of state and federal grants, should support bridging the economic-activity gap faced by establishments, particularly in the city’s hardest hit areas. DiNapoli said with the closure of the Paycheck Protection Program on August 8, the federal government is not currently providing enough significant financial support for these small businesses.

Report:
The Restaurant Industry in New York City: Tracking the Recovery


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