With 22 million Americans-and-counting filing for unemployment benefits, many economists are saying that the United States is currently contracting at the fastest rate this country has seen since World War II. Even larger companies are veering towards bankruptcy as they struggle to come up with a viable plan for getting back on their feet.
The real disturbance, however, is among small and mid-size businesses. Many were struggling before the Wuhan coronavirus (COVID-19) even existed, and now they might have to remain closed for good.
Prior to the pandemic, there were more than one million restaurants in the U.S., half of them independent and not part of large chains. The independent ones employed about 11 million people, the vast majority of whom had to be laid off after the Wuhan coronavirus (COVID-19) prompted nationwide closures for dine-in patrons.
While many assume that these 11 million people and the businesses they worked for will simply open back up once they are given the all-clear, this is a highly unlikely scenario. A recent survey by the James Beard Association found that 28 percent, or more than one in four, independent restaurants will have to close for good if the lockdowns are not lifted very soon.
This same survey found that independent restaurants had to lay off a shocking 91 percent of their hourly employees, as well as 70 percent of their salaried employees, as of April 13 – these being double-digit increases since March.
A whopping 77 percent of the independent restaurants that have remained open for take-out or delivery since the lockdowns began are now reporting that their sales have dropped by half or more. A sizeable 38 percent of them decided to close down entirely, either temporarily or permanently.
Perhaps most disturbing is the fact that only one in five, or 20 percent, of restaurants believe that they will even be able to sustain their businesses at all unless normal operations resume.
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If there are roughly one million restaurants in America today and half of them are independent, then 28 percent of 500,000 equates to 140,000 restaurants that face permanent closure if the Wuhan coronavirus (COVID-19) lockdowns are not lifted immediately.
This means that tens of thousands of families will no longer have their livelihoods, and will no longer be able to put their own food on the table. Millions will end up suffering all up and down the supply chains as well, as the lockdowns create a domino effect of economic mayhem.
Not only that, but many Americans will still be afraid to even visit a restaurant once the lockdowns are lifted, fearing that they might catch the Wuhan coronavirus (COVID-19) regardless.
"So even if all of the lockdowns were lifted tomorrow, the restaurant industry would still not fully recover," writes Michael Snyder for TheMostImportantNews.com, his article republished by Zero Hedge.
Health clubs like 24 Hour Fitness are also mulling bankruptcy as they, too, have been hit exceptionally hard by the lockdowns. Even now that Georgia has opened up its gyms as of April 24, there is still fear among many that it may not be safe to visit one because the Wuhan coronavirus (COVID-19) could be lurking on the equipment.
To keep up with the latest news about the Wuhan coronavirus (COVID-19), be sure to check out Pandemic.news.
Sources for this article include: