Editorial by Dennis Jansen on Restaurants Reopening Published by The Eagle
Apr 30, 2020
Summary: An editorial authored by Dennis Jansen that describes the effects of the CARES Act on the phased reopening of Texas restaurants was published in the Thursday, April 30, 2020 edition of The Eagle newspaper.
Beginning Friday, May 1, Texas’ Governor will permit a phased reopening of certain businesses, including restaurants. Beyond having to decide if the demand from customers warrants opening, they must comply with a list of conditions, including that they may only reopen in-house table service at 25% of capacity.
“A restaurant operating at 25% of capacity is certainly going to operate at a loss without a substantial increase in prices. Restaurants will have to consider how much of their inside business will be additional revenue to the restaurant, and how much will be cannibalizing their newly popular pickup and delivery services” Jansen said.
“However, the most important obstacle to restaurant reopening,” Jansen said “may be the willingness of their employees to return to work.”
In College Station-Bryan, restaurant workers earn from $9.56 per hour for waiting tables to around $18 per hour for management positions. Although it varies with work record, unemployment insurance replaces up to 52% of that income for the laid-off worker. Rather than help speed up the reopening of the economy, the additional weekly payment provided by the CARES Act to the unemployed only further complicates this issue.
Jansen said, “The CARES Act was incredibly poorly designed in this dimension. It provides a flat-rate supplement for the unemployed that creates huge disincentives for many of the unemployed to return to work,” as many would earn more by simply staying home.
to read the full article from The Eagle.