With the shelter-in-place regulations in full effect, many businesses are being compelled to find creative ways to offer their services. No longer able to provide dine-in services, many of Minnesota’s restaurants and breweries have leaned on curbside pickup – allowing customers to pull up outside the business to pick up their food and drink order with minimal interaction with others. Kim Carlton, an environmental health supervisor at the Minnesota Department of Health states that, “Curbside is a good opportunity to still get food from your favorite restaurants locally,” but adds, “we really just want to stress that you keep washing your hands regularly.”
From an economic perspective, supporting local businesses through curbside pickup or delivery could decrease the expected drop in food and retail sales. This would be a brush of optimism in the painting of a picture for what may come to the restaurant industry – record earnings and job loss.
This model above, using Bureau of Economic Analysis’s (BEA) RIMS II multipliers, helps illustrate the possible near-term economic impacts of the COVID-19 pandemic. The above illustration of a worst-case scenario of a loss of 3 months of Full-Service Restaurant sales—or 25% of the industry’s typical annual sales—shows possible earnings, jobs, and tax revenue impact across Minnesota. Initial losses in earnings or employment represent income or positions lost immediately in the short-term because of the reduction in sales in the Full-Service Restaurant Industry, whereas direct losses can be directly attributed to the event, but may be felt outside of the specific Full-Service Restaurant Industry. Indirect losses are wages and jobs in the firms that sell goods and services to the Full-Service Restaurant industry (such as food, cleaning supplies, and other goods), who are impacted as business slows. Finally, induced losses occur when employees of the Full-Service Restaurant Industry and other related industries affected have less of a local economic spending power in their communities due to loss of work, and have a negative resulting impact on other broader aspects of the economy.
Based on the demographic makeup of employees currently working in industries likely to be impacted by strain on the Full-Service Restaurant Industry, a disproportionate burden of job and wages loss will likely be placed on female workers—particularly young workers between the ages of 14 and 34.
These projections are alarming, but they are not certain. What is certain, is the positive impact businesses are seeing from these alternative methods of providing services. Don Seiler, owner of Inver Grove Brewing in Inver Grove Heights and Lakeville Brewing in Lakeville states, “Curbside ordering has allowed us to maintain a critical revenue stream. Although it is not as high as dine-in service, curbside business is covering fixed expenses and enabling us to keep a core group of employees on payroll.”
For questions about this report, contact Erin Olson, Research Strategist at firstname.lastname@example.org
Change in Earnings: Represents total change in earnings resulting from the initial, user-made change. This figure includes the initial change. The change in earnings figure is dependent upon the multiplier listed below. Source: RealTime Talent analysis using Emsi data based primarily on the Quarterly Census of Employment and Wages (QCEW) from the Bureau of Labor Statistics (BLS) and the Bureau of Economic Analysis (BEA).
Change in Jobs: The total number of jobs changed, including the initial change. The figure is dependent upon the multiplier listed below. Source: RealTime Talent analysis using Emsi’s model, incorporating data from the Bureau of Economic Analysis (BEA).
Taxes on Production and Imports: Taxes on production and imports (TPI) consist of tax liabilities, such as general sales and property taxes,that are chargeable to business expense in the calculation of profit-type incomes. Special assessments are also included. TPI is comprised of state and local taxes—primarily non-personal property taxes, licenses, and sales and gross receipts taxes—and Federal excise taxes on goods and services. Source: RealTime Talent analysis using Emsi’s model, incorporating data from the Bureau of Economic Analysis (BEA).
Interview with Kim Carlton: Click Here