The ongoing coronavirus (COVID-19) pandemic has resulted in “unprecedented economic carnage and fear” among restaurant workers, former Starbucks Corporation (NASDAQ: SBUX) CEO Howard Schultz said Monday on CNBC.
Plate Fund Launch
Schultz, along with other chefs in the Seattle area, launched The Plate Fund, an organization dedicated to offering within 48 hours $500 in cash to restaurant workers in King County who lost their jobs. The payment is meant as a form of bridging the gap between now and when the government stimulus check will arrive.
“This is the kind of humanity that we need in the country and what we are trying to do,” he said. “We have to recognize the stimulus is going to come but it’s going to be late.”
CARES Act Not Big Enough
The U.S. federal government deserves credit for acting quickly in passing the CARES Act but falls short in addressing the needs of the restaurant industry, The Chef’s Warehouse founder and CEO Christopher Pappas said on a Fox Business interview. The Act will need to be extended for “months or a year” as restaurants won’t be able to take on additional debt given already thin margins.
As part of the Act, a maximum of 25% of a loan can be used on rent, interest on mortgage principles, and utility payments. But for a restaurant operating in a city like New York, the Act won’t give enough money for restaurants to survive, he said. The government needs to take a second look at its measures to help the millions of people it employs.
“There’s a lot of work to do, they have gone and I think they are going to have to go bigger,” he said.
Instead, the Act needs to consider that even when restaurants re-open all of the lost employees can’t be hired back right away, he said.
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