As the election approaches, the restaurant industry is rightly encouraging its staff to hit the polling stations on November 3rd, and vote. Indeed, many brands have incentivized their employees with paid time-off to participate. Some, like &Pizza have gone even further; it’s giving workers three days of paid time off for employees to participate in “activism of their choosing.”
The voice of the food and hospitality markets is a strong one. In the USA, the restaurant industry is the second largest private-sector employer – meaning its members could make a tangible difference to the outcome if they take the opportunity to do so.
There are many that say this year’s election is too close to call. Biden and the Democrats are out front according to polls, but their lead is shortening and there’s every chance that the candidates will head into November neck-and-neck.
No matter which side wins, there’s likely to be a slow in restaurant spending by consumers in the coming weeks. It’s been noted that restaurant sales slowed during the months leading up to the last three elections – economic uncertainty, plus the draw of watching news coverage and the debates on TV hold people at home. This year too, there’s the added concerns of COVID-19 to battle.
Even once the result is in, we know the market can’t pick back up overnight. The pandemic and the state of the economy will still take time to manage. However, there will be some changes should the Democrats take power.
Brian Rose, chief economist at UBS Global Wealth Management has commented on the possibility of a Biden win: “The market has come around to the [view] that it is not the end of the world…Even though corporate taxes would rise, there is going to be extra spending. This should help to promote growth in the long run.”
In short, the democrats want to spend money. “There are more needs that have emerged,” Nancy Pelosi said, since May when House Democrats pushed through a $3.4 trillion aid bill that the Senate didn’t then take up. Rep. Earl Blumenauer, an Oregon Democrat, has also proposed a $120 billion for grants to stabilize the restaurant industry. The bill has more than 150 sponsors in the House and would target small business owners, according to the U.S. House Democrat.
In September Biden tweeted: It’s not enough to just thank our essential workers — we need to pay them. As president, I’ll: – Raise the minimum wage to $15 – End the tipped minimum wage – End the sub-minimum wage for people with disabilities – Ensure everyone has strong benefits.”
It appears his campaign is garnering support from the industry. Recently, and as part of his campaign, chefs and restaurant owners across the country signed an open letter condemning Trump’s handling of COVID-19, saying it has, created an “existential crisis” for restaurants.
That’s not to say support for the Democratic win is universal within the market. Reading responses to Biden’s Tweet reveals hundreds of concerned members of the industry saying that changes to the minimum wage and ending the tipped minimum wage will place financial pressures on businesses that are barely managing to stay afloat.
In a May, the President Trump held an 18 person roundtable where a willingness was shown to right problems in the Paycheck Protection Program that have caused real challenges for restaurants during the pandemic. This includes a requirement for PPP loans be spent within eight weeks to qualify for forgiveness.
That’s an issue both sides have commented on: Democrats in the House of Representatives have presented a $3 trillion stimulus package which includes changes to the PPP. However, Republican Sen. Lindsey Graham told CNN that the bill is “dead on arrival.” While ABC News called is a “messaging bill” and an opportunity for Democrats to state their priorities.
Whether it is Trump of Biden that emerges from this election victorious, the government needs to make moves fast if any, but the largest restaurants, are going to survive Winter. As Summer recedes, on-street dining is ending and venues need to be able to serve, either indoors, or through takeaway services in order to boost their revenues. Putting politics aside, this must be a focus for whoever wins come November.
