Top 5 Ways the Government Shutdown can Affect Restaurants
Posted on October 7, 2013
When the government decided to close up shop on October 1, 800,000 government employees were suddenly out of work, their personal finances now dependent on the government’s ability to manage its fiscal responsibilities. I, for one, am thankful Godzilla didn’t take this chance to destroy our major cities while our governing bodies were at rest.
But I digress.
The lasting effects of the shutdown reach much further than these employees. The restaurant industry in particular will take some huge indirect hits the longer this government stoppage transpires. Here are some staggering numbers regarding the shutdown:
1. 7,000,000 Tourists
7 million. That’s how many tourists didn’t have their have their visas processed during the last government shutdown in 1996. We can expect similar numbers this go-around, too. Even those who will make it across the border will miss out on the Smithsonian, the Statue of Liberty, the National Zoo, and all 401 of our national parks. Just like the Griswolds in the first Vacation movie, you’ll walk up to the entrance only to find it’s closed for renovation closed for a mass government shutdown. While one may see the absence so many ankle-sock wearing, disposable camera-wielding tourists as a positive, consider the boost these travelers would give local economies and restaurants.
2. 800,000 Penniless Patrons
This round number represents the amount of government employees furloughed during the shutdown. When you factor families into the equation, the total number affected is much higher. These people have car payments, mortgages, pets, and perhaps a collection of Godzilla figurines to keep up with. The last thought penny-pinching families have on their mind is going out to eat. When you have less dependable income, you’ll go out about as much as the food pyramid recommends fats and oils (it isn’t a lot).
3. 550 Breweries
The Brewers Association estimates 550 breweries could open this year, creating roughly 5,000 new jobs in the craft beer industry. However, these breweries and jobs will have to wait until the Alcohol and Tobacco Tax and Trade Bureau (ATTTB) starts back up. It turns out the ATTTB handles and reviews permit applications for new breweries and won’t approve anything while the government lies dormant.
Even if you’re an existing brewery, the ATTTB can’t approve formulas for new beers. The wait time for new formula approval was already up to 45 days on average, meaning those delicious seasonal brews for winter and early spring might not show up on your local watering hole’s tap.
4. 62 Less to Help
62 represents the percentage of employees The Small Business Administration furloughed. This means loans for smaller companies will come around about as often as a sane roommate on Craigslist. Whether you’re an entrepreneur looking to get a brewpub off the ground or the owner of an established pizza shop looking for an extra boost, that extra cash will have to wait until the shutdown has been opened up.
5. 33 or More at Risk
33 people died in 2011 due to a listeria outbreak stemming from a cantaloupe farm in Colorado. That number would likely be larger if not for the USDA’s subsequent investigation and intervention on the cantaloupe farm. This is pretty scary considering www.usda.gov is currently down. Here’s a quote from the website:
“Due to the lapse in government funding, this website is not available.”
The U.S. Department of Agriculture will still deliver food stamps, deal with forest fires, and inspect meat, poultry and grain—so there’s that. The real problem lies in the information the USDA won’t be able to provide during the shutdown.
Since the USDA’s office of communications is inactive, reporters won’t have any appropriate avenues to release information. Even press releases from the USDA will cease until the shutdown is over. That means if something huge were to develop like the listeria outbreak of 2011, the public would have a hard time finding out about it. The last thing struggling restaurants need is a bad batch of veggies.
Even further, restaurants might be overpaying for meat, poultry, and vegetables over the next few weeks. Farmers rely on reports from the USDA to price their harvests so they can make a profit. Without these databases, farmers will have to guess on what price their crops are worth, meaning they could be overcharging.