Server Not Servant

Archive for July, 2021

Servers Not Served – Unemployment Insurance Not Provided to Thousands of Hospitality Workers Across Massachusetts

Book Chapter: Human-to-Human Service

Posted: 07/17/2021

This guest post is provided by Molly Kivi, an accountant turned unemployed server, who believes hospitality is a way of life. When the pandemic started, she used her knowledge of law, taxes, and government bureaucracy to serve her fellow restaurant workers by advocating for needed change in the flawed unemployment insurance program.

On July 22nd at 5pm the Commission to Study Unemployment Insurance Trust Fund Solvency will hold a public hearing about the importance of safeguarding Massachusetts workers’ access to unemployment insurance. The Commission is jointly chaired by Senator Pat Jehlen of Second Middlesex district and Representative Josh Cutler of Sixth Plymouth district. You can sign up to speak at the hearing here.

This commission was enacted into law on April 1st, 2021, in response to the Unemployment Tax and Benefit Reform campaign. This restaurant-worker led campaign began in March of 2020 to warn lawmakers that the unemployment system was not ready for fiscal and social emergencies such as COVID-19.

Unemployment insurance is an important public health and economic stability tool. The restaurant industry employs 10% of the nation’s labor force. In 2020, we realized that the state’s UI program was not ready for a crisis. Facebook groups like Industry United, MA Unemployment Consultation, and MA PUA and UI Unemployment Help sprang up in response to an entire industry of people having issues accessing benefits.

Unemployment insurance is designed to protect workers from economic devastation when forces out of their control take their livelihood away. Workers are forced out of their jobs all the time due to unsafe work conditions, job duties, and workplace behaviors that are unlawful, as well as layoffs due to economic downturns and in industries that experience cyclical job losses, like the arts and construction.

Despite its importance for safeguarding workers’ livelihoods, the Massachusetts unemployment insurance system has some significant structural flaws. The benefit payments do not factor in purchasing power, so insurance increasingly fails to help workers deal with a rising cost of living. The tax system used to fund the program is also regressive, because the taxable wage base is capped at the first $15,000 of workers’ income. Furthermore, because employers’ tax rates increase when layoffs occur, smaller businesses end up paying into the system higher rates than large businesses that are better able to weather business cycle fluctuations. Finally, for decades the trust fund that holds the money to distribute benefit payments has not collected enough revenue to comply with the Department of Labor standards, due to a  tax break benefiting big business enacted in 1997 costing the state 13 billion dollars.

The effects of an insolvent trust fund ripple throughout the state economy, ultimately hurting the working class the most. The application process places a cumbersome administrative burden on unemployed workers, and restrictions on access often disqualify workers unjustly. The taxes used to pay interest on the loans that Massachusetts takes out to cover its unemployment insurance liability are levied with a regressive impact on small businesses and workers.

The restaurant industry serves the public. We host families on special occasions, we calm the nerves on first dates, and we provide the place for friends to gather. As an industry we were asked again to sacrifice. To stay home, lose out on job security and income to protect the public health of our communities. Unfortunately, the social insurance that was supposed to be there was not there for many restaurant industry workers.

If you have a story about your experience with unemployment insurance, please sign up and share it. July 22nd at 5pm is our day to be heard. Thank you.

Please watch this YouTube video for a more in-depth understanding of Unemployment Insurance:  Solidarity LIVE! Unemployment insurance: making it more equitable in Massachusetts. With Molly Kivi.

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President Biden & Congress: URGENT Request to Replenish the Restaurant Revitalization Fund-Support ALL Eligible Independent Restaurants & Bars NOW!!! #ReplenishRRF

Book Chapter: Human-to-Human Service

Posted: 07/12/2021

What would you do if you owned a business and were notified that after barely surviving the horrific hardship of the pandemic, a significant cash windfall/grant (not loan) was imminent? Spend/invest in personal and professional necessities/improvements you were holding off on? Take care of your employees, family, colleagues, employees, vendors, and landlord? Splurge/celebrate a little, believing substantial help was on the verge of finally becoming reality?

That scenario is exactly what played out to hundreds of thousands of hopeful independent restaurant and bar owners across America recently. The promise of the Restaurant Revitalization Fund was palpable. And on Wednesday, 6/30, the proverbial rug was pulled out from under most of the grant-eligible restaurants in an email from the US Small Business Administration. This is absolute bullshit, and President Biden, his administration, and Congress need to urgently replenish the Restaurant Revitalization Fund until EVERY eligible, Independent Restaurant and Bar in America is funded according to what they qualified for.

Tragically, many restaurants and bars will not have time to wait for a replenishment of the fund. And ironically, many folks that received huge grants may decide to ‘take the money and run’, after contemplating, “Why reopen and go back to the rat race if I don’t need to prove how I spend the money?” In an industry with 5(ish) percent ‘profit’ margins, you’re essentially ‘giving back’ 95% of the grant by grinding it out and staying open. This WILL happen, and should have been anticipated/prevented in the screening process. Based on the initial formula for eligibility, a lot of restaurants that received huge grants were actually rewarded for shutting down 100% rather than ‘pivoting’ the way that many of their peers did to support their staff, vendors, and community. The greater the loss, the bigger the grants. Yes, every restaurant, owner, and set of ethical standards are unique, and many ‘true colors,’ good, bad, and ugly have been revealed throughout the plague…

Even worse than learning that the RRF has been depleted, is the kick in the teeth finding out that ‘ineligible’ restaurants received huge grants by circumventing the qualification requirements or leveraging their political clout to cheat the system. Why weren’t their grants rescinded? Those funds could have been spread out to Mom and Pop neighborhood restaurants and bars that didn’t get a dime. If you’re furious, I’m with you, and it’s time to take action. And the restaurants that were fortunate enough to receive grants from the first round of funding need to continue to fight for equity for their industry brothers and sisters until every eligible restaurant in America is funded.

On Thursday, July 1, I posted the following in my Server Not Servant Facebook Group, Instagram, and Twitter:

“Awful news for many independent U S. restaurants anxiously awaiting word on the status of their Restaurant Revitalization Fund grants. From the 7/1/21 Restaurant Business article, “In a letter emailed Wednesday night to applicants, the U.S. Small Business Administration said it was able to provide grants of up to $10 million to 105,000 restaurant operators before the program’s $28.6 billion was depleted. Yet, it indicated, another 265,000 applicants were left disappointed…Legislation has been introduced in the Senate to replenish the fund with an additional $60 billion, but the bill has not progressed.”

Simple math indicated that the grant program was woefully underfunded from the outset. Precedent had been set when the U.S. Govt ‘bailed out’ big banks, Bear Stearns (“Too big to fail”), FNMA, Freddie Mac, AIG & Insurance companies, the Airline & Auto Industries during crises. Independent restaurants are major contributors to the US economy, and the pandemic is one of the worst calamities we have ever faced as a nation.

Further, “Second-order effects of restaurant closures ripple through the American economy, bringing economic pain to farmers, foragers, ranchers, manufacturers, and other producers who supply the industry. Equally hit are supply chain partners who move good across the country.” –Forbes 8/10/20

Owning and operating a restaurant and small business is a fucking grind during ‘normal’ times. After what restaurateurs have endured since the onset of the pandemic, the U S. Congress needs to act urgently to replenish the fund and equitably provide grants to every eligible independent restaurant in America. If not, with the increase in food and labor costs, and shortage of staff, the absence of the highly-anticipated grants will be the death knell for a rash of neighborhood restaurants teetering on the brink.”

In the comments on all 3 platforms I added the following:

According to the NYT, 7/1/21, “When Congress created the restaurant fund in March as part of the Biden administration’s $1.9 trillion American Rescue Plan, it ordered the Small Business Administration to put a priority on funding for businesses owned by women, people of color and military veterans.”

I fully support priority being ‘granted’ to oppressed or ‘underserved’ (SBA’s language) groups of American restaurant and bar owners. It’s about fucking time. However, with more forethought and creativity, lawmakers could have done a much better job executing the distribution of funds. What unfolded is a clusterfuck of lawsuits, rescinded grants, policy changes, empty promises, disappointment, high stress. and anxiety.

“For a hundred thousand restaurants, the R.R.F. has made their future clear and stable, but for the more than 200,000 operators shut out of funding, receiving this letter today only heightens their fear and anger,” said Sean Kennedy, a spokesman for the National Restaurant Association. “We need Congress to act.” -NYT

Without additional funding, they will undermine the initiative by perpetuating jealousy/envy/anger between the ‘haves’ (grantees) and ‘have nots,’ again. This is exactly what many Americans have been trying to ameliorate forever…

What should have been done? 

Again, to me, the most glaring inequity here is that many restaurants and bars (groups) received $10 million grants, and MANY received ZERO. Here’s proof. (Click on the link to see what restaurants in your neighborhood/state received, and which Mom and Pop joints you love received nothing.)  It doesn’t take a Fields Medal recipient to realize that a more thoughtful, creative, equitable distribution of funds was possible.

1. Very simply, if $28.6 billion was available for 370,000 eligible applicants, $77k+ could have been distributed to everyone eligible.
2. I get that the $10 Million grant recipients have more than 1 restaurant. However, instead of disbursing $10 million to some restaurant groups, even if they got $1 million and the other $9 million was disbursed in $50k increments, 180 Mom and Pop neighborhood restaurants that didn’t receive a nickel would be absolutely thrilled right now instead of infuriated. [In an industry where 5% ‘profit’ margins are common, it would take $1 million in sales to generate $50k in profit.]

This IS LIFE or DEATH for restaurants and bars. And without our outrage and support, many more will close for good.

I’ve been an early advocate of a federal grant program and relief for independent restaurants and bars, here, here, here, here, and here.  Conceptually, philosophically, and morally, based on American precedent, it is the right thing to do. The necessity of restaurants/bars shutting down was imperative in the interest of the safety and health of the American people–workers and the public. The RRF was well-intended, but VERY poorly executed. And now it’s time to rectify the wrongs and support every eligible independent restaurant in America.

I will update/edit this post often to include specifics on how you can take action. Please email me at patrick@servernotservant.com or add your comments and links below to support the #RestaurantRevolt and save your favorite American neighborhood restaurants. Please share far and wide. Thank you.

1. Follow Independent Restaurant Coalition for specifics on how you can urge President Biden, US leaders, and Congress to do the right thing.
2. It will be very interesting to see if the large (or any) grant recipients offer to give back (similar to PPP) or attempt to locally reallocate a portion of their grants now that they’re realizing that many of their neighbors and industry community members got nothing.

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