Press "Enter" to skip to content

Biden Rescuing Restaurants: SBA Offering $5M Socialist Subsidies to Surviving Chowhouses

The coronavirus pandemic has killed 2.21 out of every 1,000 South Dakotans and 1.71 out of every 1,000 Americans (and let’s stop that number from climbing: wear your mask, keep your distance, and GET YOUR SHOTS!!!). The pandemic has been even more lethal to restaurants: one national survey from March finds that 102 out of every 1,000 restaurants have closed for good since coronavirus broke out in the U.S. Food trucks have taken the hardest hit in the industry, with 22.5% shutting down, while fast food joints have held their pandemic closure rate to 9.8%. Mid-sized chain restaurants have seen higher closure rates than independent diners. Restaurants serving French food have shut down at twice the rate of burger joints and Thai places.

And even though Delaware imposed a 30% occupancy limit on restaurants and a public mask mandate, Delaware has the lowest rate of restaurant closure in the nation at 8.2%. (Joe and Jill must have ordered a lot of take-out for their Wilmington campaign staff.)

To keep the remaining 89.8% of America’s restaurants open and maybe bring back a few of those lost, we’ve got socialism! President Joe Biden’s American Rescue Plan includes a 28.6-billion-dollar Restaurant Revitalization Fund which the Small Business Administration will dole out in chunks of up to $5 million for individual eatery locations and up to $10 million for multi-site businesses, including…

  • Restaurants
  • Food stands, food trucks, food carts
  • Caterers
  • Bars, saloons, lounges, taverns
  • Snack and nonalcoholic beverage bars
  • Bakeries (onsite sales to the public comprise at least 33% of gross receipts)
  • Brewpubs, tasting rooms, taprooms (onsite sales to the public comprise at least 33% of gross receipts)
  • Breweries and/or microbreweries (onsite sales to the public comprise at least 33% of gross receipts)
  • Wineries and distilleries (onsite sales to the public comprise at least 33% of gross receipts)
  • Inns (onsite sales of food and beverage to the public comprise at least 33% of gross receipts)
  • Licensed facilities or premises of a beverage alcohol producer where the public may taste, sample, or purchase products [Small Business Administration, “Restaurant Revitalization Fund,” retrieved 2021.04.21].

Restaurants that have permanently closed are not eligible; you still have to be slinging hash for this cash. And for the first three weeks of the program, SBA is only processing applications from priority groups:

  • A small business concern that is at least 51 percent owned by one or more individuals who are:
    • Women, or
    • Veterans, or
    • Socially and economically disadvantaged (see below).
  • Applicants must self-certify on the application that they meet eligibility requirements
  • Socially disadvantaged individuals are those who have been subjected to racial or ethnic prejudice or cultural bias because of their identity as a member of a group without regard to their individual qualities.
  • Economically disadvantaged individuals are those socially disadvantaged individuals whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities as compared to others in the same business area who are not socially disadvantaged [SBA, 2021.04.21].

The SBA says all that socialism will help support South Dakota’s tourism industry:

According to SBA South Dakota District Director Jaime Wood, thousands of South Dakota restaurants and bars may be eligible for the RRF funds that can be used for economic recovery and for preparing for the high-traffic South Dakota tourism season ahead.

“Our restaurants and bars faced disruptions to the work force, supply chain, and being temporarily closed over the past year – all of these factors reduced revenue for many establishments,” said Wood. “We’re rapidly and widely reaching to organizations and small businesses across the state to make sure RRF information gets to every community and we highly encourage businesses to prepare to apply” [South Dakota District Office of the SBA, press release, Brookings Register, 2021.04.20].

Don’t expect Governor Noem or any of her friends in the South Dakota restaurant business to denounce these free lunches. They can’t avoid the political and economic reality made clear by the coronavirus pandemic: we must rely on socialism to sustain the economy and civil society when capitalism cannot function safely.

13 Comments

  1. jake 2021-04-21 10:03

    Ahhh, socialism vs. capitalism,,,, The South Dakota GOP Trumpublican Party is sooo famous for its extolling all the virtues of the second (by decrying the first) while subtly using the first to use other, more liberal and progressive state’s $$$ to fill their pockets.
    South Dakota GOP-first fat hogs to the trough!

  2. Porter Lansing 2021-04-21 10:27

    Customers are returning in droves. The problem in CO is simply No Workers.

    -Restaurants in Denver, Fort Collins and across the state face “enormous” hiring and retention challenges, reflecting a broader national trend, the Colorado Restaurant Association tells Axios.

    This is despite high employment and a massive push to hire back staff and bring on new employees, especially as the summer patio season approaches.
    What they’re saying: Between Eddyline Brewery’s two operations in Buena Vista, staff has been slashed by about 50%, causing the taproom to stay temporarily closed, owner Brian England tells Alayna.

    He recently hosted a virtual job fair that drew in zero applicants.
    “Even if we quadruple our wages — nobody’s applying,” he said.
    Between the lines: Multiple factors may be contributing to the shortage in staff, experts say…

    -Generous unemployment benefits may be more than workers made at their former job.
    -Workers could be reconsidering their careers and leaving the industry for good.
    -People may feel fearful of returning to work and the health risks that they could face.

  3. bearcreekbat 2021-04-21 11:24

    A couple questions:

    (1) For Cory, or anyone else: Is this assistance to food services in the form of grants or is it as loans that will have to be repaid?

    (2) For Porter: Did any Colorado food service business actually “quadruple” wages for their employees, or is that just hype from Brian England?

    While it is basic common sense that if unemployment benefits are paying more than actual wages, it would certainly be against the economic interests of anyone on unemployment to accept a job with the lower wages and give up the higher benefits, if they have that choice. The reality, however, may be quite different since that may not be a untethered choice open to people on employment, depending on state and/or federal law. Typically, unemployment insurance statutes require an appilicant or recipient to conduct an honest work search, to take any reasonable job offered, and to honestly report the results of such a search. Reporting that a job was turned down because the pay was lower than the recipient’s current unemployment benefit amount would, it seems in most cases, disqualify that recipient from continuing to receive full unemployment benefits.

    And successfully filing a false report about a job search becomes more difficult to get away with when there is a high demand for labor. Even more importantly, those folks who commit such fraud are chancing a prison term and many other consequences if caught. Most people are going to try to avoid prison, which obvously would factor into whether to commit felony theft by unemployment fraud angainst the state or federal government.

    This whole “higher benefits” meme is similar to the Trumpist claim that doctors would commit medicare fraud by falsifying a report of the cause of an individual’s death because the doctor thinks he or she can get away with stealing from the federal government, and is willing to bet jail time and the loss of a career for a few extra Covid bucks. While there always is a thief or two in the crowd, it is just plain silly to think that stealing is a common characteristic of either most doctors or most folks on unemployment.

  4. Cory Allen Heidelberger Post author | 2021-04-21 12:35

    BCB, recipients of these funds do not have to pay them back as long as they use the funds for eligible expenses.

  5. Porter Lansing 2021-04-21 13:13

    BCB – You’re right that the offer of quad wages is hype. That’s because in the top drawer, white table cloth restaurants I worked in servers wages were about $2.00 bucks an hour and tips were between $50-$75 an hour.

    There IS a trend in the type of “beer hall” tourist attraction, brewery joints that Eddyline Brewery is, to pool tips (with the owner, cooks, and kitchen staff all getting a share). When that’s the case, wages run about $8.00 an hour.

    And, no. I doubt it they’d put the offer of quad wages down on paper.

  6. bearcreekbat 2021-04-21 13:41

    Thanks Cory & Porter.

    Tips can be a critical supplement to an employee’s earnings, yet even with tips the benefit to employees might not be all it seems on the surface. Porter’s description of Eddyline where the “owner” shared in the tips brings back a vivid memory.

    I recall such a situation a few years ago in one of the fanciest restaurants in Mankato Minnesota. They would hire a young, attractive, and often pregnant, coat check girl to stand at a station to receive and retrieve the customer’s coats. At her station management installed a locked box for the customers to see, with a slot plainly marked “tips.” Naturally, most customers assumed these “tips” were for the young coat check girl, and many customers typically were quite genereous tippers in an effort to help out a poor young mother to be. What the customers didn’t know, however, was that at this restaurant the management kept 100% of all tips put into the locked slot box and the employee got none.

  7. Donald Pay 2021-04-21 13:51

    I used to funnel people into these hosting/serving jobs My guess is there is hesitancy because the types of customers attracted to these places right now are not be the sorts of folks who follow rules. That’s fine when there isn’t a killer pandemic out there, but even a low wage worker values their life and those around them more than a job with starvation wages. If everyone was masked and vaccinated, I’m sure there would be workers. Around here, students make up a lot of the serving/hosting duties. Students, who are trying to eke out a degree, have figured out it ain’t worth it to risk losing a semester for $8/hr.

  8. Porter Lansing 2021-04-21 14:10

    If you wonder how the unemployment insurance on a $2.00 an hour job can be a living wage that servers won’t give up voluntarily; income taxes are paid on your tips and UI benefits are determined by your gross income not just salary.

  9. SD is 20 per cent nonwhite 2021-04-22 06:45

    How can these low tax Trumplicans sidle up to the trough provided for by Democratic President and big Blue States like California, New York and Illinois?

    These rugged individualists will lick all they can from the trough.

    Seriously, the pandemic has seriously affected restaurants and businesses since 2020, so we do need to boost the economy.

    Let’s start seeing Progressive restaurants and coffeehouses and vegan chow places pop up all over the state!

  10. Mark Anderson 2021-04-22 17:31

    SD is 20, I would love to see some more vegan places in South Dakota. I thought they were illegal? At least thats what I tell my friends when I HAD to give up eating meat. My real vegan friend told me he didn’t like an impossible burger because it tasted like a real burger, so I know I’m still addicted.

  11. John Dale 2021-04-22 18:10

    These rhetorical arguments have not swayed me given that the “socialism” is foist on those via false choice. Take the money or die (slowly).

    For what it’s worth, I think this is more fascist since “socialism” is being pressed upon us, and we are no (the vast majority) seeking it.

  12. Richard Schriever 2021-04-22 18:38

    Mr. Dale – “Take the money or die (slowly).”??? What, you mean you are admitting that all these red states would die (slowly) if left entirely to the outcomes of their own state policies?

Comments are closed.