Wisconsin restaurants still struggling financially despite subsidies
After receiving more than $ 1 billion in federal and state grants and forgivable loan programs, Wisconsin bars and restaurants are still struggling, according to a report from the Wisconsin Policy Forum.
The report, released Friday, provided a mixed outlook on the restaurant and bar industry, showing that the rate of employment recovery is lagging behind the national average.
Nationwide, employment in this industry was down about 6.1% in August 2021 from August 2019. In Wisconsin, employment in restaurants and bars is down 20 , 5% in August 2021 compared to August 2019.
“The pandemic has caused some restaurants and bars in Wisconsin to shut down permanently, but most have found ways to adapt and survive, in part thanks to the lifeline provided by federal and state grant programs and forgivable loans, which have funneled over $ 1 billion in federal funding. to restaurants and bars in Wisconsin, ”according to the report.
“Yet many continue to face challenges, including an increasingly tight labor supply that may be due in part to workers seeking better employment conditions in other industries. ”
Overall, the report says employment in the industry is down 9% from pre-pandemic levels.
The report does not specifically indicate the causes of the drastic lack of jobs, but does mention factors such as childcare, low wages, lack of benefits and undesirable working conditions, such as dealing with unruly customers and being exposed to COVID-19, as contributors to the labor shortage.
However, preliminary sales tax revenues are recovering more strongly than employment.
According to the report, sales tax revenue increased 6.8% in July 2021 compared to July 2019. But the industry is still behind other industries, for example retail sales increased by 20, 4% over the same period. Overall, the state’s tax revenues increased by 12.4%.
“This result once again reflects the continuing struggle that restaurants and bars face versus businesses in many other industries,” the report read.
One of the ways restaurants and bars have tried to make up for lost income is by increasing menu prices.
According to the report, menu prices rose 5.4% in the Midwest region in July 2021 compared to last year. However, wholesale prices are up 8.1% nationally from a year ago, which could be a factor in the increase in menu prices.
Through the passage of the CARES and American Recovery Plan laws, federal and state agencies have provided funds to small businesses, including restaurants and nightlife.
In Wisconsin, of the $ 285 million in grants distributed by the Wisconsin Economic Development Corp. To businesses, more than $ 64 million has gone to bars and restaurants, but the report points out that the push for this funding has come from the WEDC’s “We’re All In For Restaurants” grant program.
Other loan and grant programs, not specifically aimed at restaurants, have also had an impact. The Wisconsin Tomorrow Small Business Recovery Grant program administered by the Wisconsin Department of Revenue provided $ 420 million in small business grants and WEDC’s Main Street Bounce Grants used $ 50 million of ARPA funds for small businesses. companies.
“The return of Wisconsin restaurants and bars to operations closer to ‘normal’ pre-pandemic has been welcomed by residents statewide,” the report concludes.
“While their recovery warrants some cautious optimism, the loss of state-approved businesses in 2020, current labor shortages, rising wholesale food prices and the recent increase in the number of new coronavirus cases show that their challenges are likely to continue for some time. ”