During the next few days, 80,000 or more of Iowa’s restaurant and bar workers will likely file for unemployment benefits, predicted the CEO and president of the Iowa Restaurant Association.
The prediction comes after Iowa Gov. Kim Reynolds on Tuesday ordered bars, gyms and theaters closed in an effort to stem the outbreak of the coronavirus. Restaurants can stay open but cannot offer dine-in service. Instead, they can offer carryout, drive-thru or delivery service. The closures are in effect through March 31.
Jessica Dunker of the restaurant association said her members had been bracing for the order. In anticipation of the move, some restaurant owners had begun informing customers of curbside and delivery services.
However, Dunker said many restaurants will likely opt to close. About 155,000 people are employed by restaurants and bars and more than half will likely file unemployment claims, she said. If her predictions are correct, the number of people collecting unemployment in Iowa will more than double.
In January, 49,500 people collected unemployment benefits, according to the most current Iowa Workforce Development data. Iowa’s unemployment rate in January was 2.8%.
Dunker said while she’s concerned about workers, she’s equally worried about how the suspension of on-premise dining will affect businesses. Iowa has more than 6,000 restaurants and bars.
“If we don’t receive aid packages – not just tax cuts or [Small Business Administration] loans – I think we will lose thousands of our restaurants and bars permanently,” Dunker said.
Takeout and delivery options will help generate some revenue for the restaurants but likely won’t cover fixed costs such as mortgage or lease payments and utility and other bills, insurance premiums and tax payments, she said. “The chances of seeing our operators be able financially to open on the other side of this are low.
“It is a tough day today.”
Carl Wertzberger, who is part of a group that operates Gilroy’s, Court Avenue Restaurant and Brewing Co. and Americana, sent a letter to customers pleading with them to buy gift cards to help the businesses survive.
“Our governor made the difficult decision to shut our industry down to help the greater good,” Wertzberger wrote. “I pray that it works. Unfortunately, that puts my work family and our livelihoods in an extremely difficult position.”
Dunker said the group of restaurants with which Wertzberger is affiliated is a “financially viable operation.”
“Imagine what our rural Iowa places are feeling right now,” she said. “It could be a death blow if we can’t figure out some relief.”