Restaurant industry loses jobs for first time since April due to Covid restrictions

The restaurant industry has lost jobs for the first time since April, with new restrictions aimed at tackling the coronavirus pandemic weighing on sales in restaurants and bars.

The surge in new Covid-19 cases in November weighed on overall employment growth, which slowed to its lowest rate since May. Unemployment fell from 6.9% to 6.7%, according to the monthly report of the Ministry of Labor. Food and beverage outlets lost 17,400 jobs in November, and the industry has an unemployment rate of 13.8%.

But the surge in infections is hitting the restaurant industry particularly hard. This fall, states and municipalities across the country began imposing yet another round of bar and restaurant restrictions after indoor restaurants reopened and capacity increased during the summer months.

Reduced capacity or fully pivoted to take out and delivery means fewer workers are needed in kitchens or serving food.

Los Angeles County, for example, has closed restaurants to all in-person dining, whether indoors or out. The state said Thursday it could re-impose stay-at-home orders if the hospital’s capacity becomes limited. Delaware had imposed new restaurant restrictions in mid-November, but issued a stay-at-home order on Thursday, as cases continued to climb.

Nationwide, the seven-day average of new Covid cases per day rose to more than 179,400, according to data collected by Johns Hopkins University – the highest to date. This week, grim records were set for the number of patients in hospitals and the number of people who have died from Covid in the United States.

And while some consumers may have been willing to dine in restaurants when the number of Covid cases was lower, the new surge, combined with the cold weather, appears to have affected customer traffic. Black Box Intelligence, which tracks restaurant data, found that the industry’s same-store traffic fell 16.3% in November. Comparable store sales fell 10.3%, the largest drop since August.

The new surge in cases also comes after the end of summer hires in the fast food industry, although the unemployment data is seasonally adjusted. McDonald’s has said it will hire 260,000 people this summer when its dining rooms reopen.

Industry experts expect another wave of restaurant closures and bankruptcies this winter, which will further reduce the number of restaurant jobs available. However, talks for another stimulus package have resumed on Capitol Hill, which could provide relief to both restaurants and their unemployed employees. Earlier this week, President-elect Joe Biden said restaurants should be given grants, not loans, to help them come out of the crisis, echoing a sentiment expressed by Treasury Secretary Steven Mnuchin.