COVID-19 vs. The Gig Economy: One Restaurant Worker's Story

Once COVID-19 began its rapid spread across the United States, leaders and public health experts called for a policy of social distancing and of closing down all ‘non-essential’ businesses.  To date, most states and major municipalities have ordered ‘shelter-in-place’ rules for their residents. In most places this has meant that only the most “essential” businesses may remain open, for example grocery stores, pharmacies, takeout restaurants, and hospitals. The impact of this policy on countless small businesses is immense. While business owners grapple with how they will keep their firms afloat with dramatically reduced sales, their employees have the added concern of how they will keep up with their bills, including rent, while not getting paid. In fact, unprecedented numbers of workers have been laid off, with unemployment insurance claims reaching historic proportions by March 2020.  Those organizations where work-from-home (WFH) is feasible have shifted to it.  However, many employees of essential businesses have no choice but to put themselves and their families in harm’s way; as my employer, the Economy League of Greater Philadelphia, has shown in a series of data briefs, frontline workers are disproportionately African American and Latino. 

As office manager at the Economy League, transitioning to remote work has been a challenging adjustment. As imagined, it is stressful to envision a role as an office manager when we are not allowed to go to the office!  However, I have found that my work remains doable. In fact as everyone adjusts to this new reality of working from home my responsibilities seem to have increased.  I’m being called upon to make sure all meetings are now virtual and keep the team in close contact since we are no longer able to walk over to each other’s desks to ask even a quick question. I had some anxiety during the first week, wondering if I still had job security now that the office wasn’t a physical unit. However, I was fortunate that my role extends well beyond the office. In short, the pivot to remote work was definitely challenging, but thus far it is working out for this office manager.

Unfortunately, many Philadelphians have not been as lucky. The response to shelter-in-place was swift and harsh. There have been significant cuts and losses, leading to layoffs, shutdowns, and overall uncertainty for many workers. In a crisis like this, the so-called gig economy in particular has been put under a spotlight and all its flaws have become visible.  Restaurants are now open only for pickup and delivery, making the server job at least temporarily obsolete.  Most clothing and electronics retailers have been closed indefinitely, many of the employees given no clear answer as to when or whether they will be paid. Other workers have been temporarily or permanently laid off, relieving their bosses of the burden of paying them or providing them with healthcare. Lyft and Uber have released statements asking the public to only travel when necessary, dramatically reducing rides for their drivers.  Even in the so-called ‘good times’ prior to the pandemic, gig workers already suffered from unpredictable incomes and lack of access to benefits like health insurance, workers compensation, or even the ability to apply for unemployment insurance.   (Fortunately the CARES Act made provisions, albeit temporary, for gig workers to qualify for unemployment.)  In any case, the pandemic has life for non-salaried and contingent workers far more precarious.

A RESTAURANT WORKER’S STORY

The food and beverage industry has been among the hardest hit by COVID-19. The Economy League has done much work on this sector, and the data is astounding. Small food businesses such as local restaurants are suffering immensely under the social distancing protocol. While many cafes and restaurants have pivoted to offering takeout and delivery options, this still leaves many of their employees jobless and without pay. The Economy League has projected that a best-case scenario in this pandemic would leave 7,000 employees jobless and would cost the City $3.6 million in lost wage taxes. The worst-case scenario, on the other hand, shows a loss of more than 25,000 jobs and $12.5 million in lost wage taxes. While restaurant owners are seeing precipitous drops in revenue, restaurant employees are struggling to make ends meet.

Per the City’s mandate, Caribou Café, a French restaurant in Center City, has shut its doors for dine-in and is offering only takeout to its customers. Like all food-related businesses in hospitality, Caribou Café’s decision puts their employees in limbo. One Caribou employee, Ann - who has asked that we not use her real name - says she had been with the restaurant since May 2019 until she was recently temporarily laid off. She has been working in the restaurant industry for ten years and this is the first time she has seen anything of this magnitude.

When COVID-19 first began making headlines, Ann couldn’t predict the impact it would have on her employment. “I had no idea it would go this way,” she says. “We saw a drop in customers and I had hoped maybe we’d shut down for a week- but the real brunt of the pandemic didn’t hit me until the doors shut. That’s when the gravity of the situation set in.” Ann is now jobless with no other sources of income for the foreseeable future.

A week before I spoke with Ann, the federal government enacted the $2.2 trillion Coronavirus stimulus package (CARES) into law. Under the bill, temporarily laid off employees like Ann can expect $600 per week from the government in enhanced unemployment benefits, as well as a one-time stimulus check of $1,200. I asked Ann what she thought of this bill, and if she had faith that it could help her. “I’m happy to see $600 a week assigned to those receiving unemployment. These are people who, like me, who are usually playing catch-up as it is,” Ann says. When asked what most of her stimulus money will be used for, Ann says she is cautious to spend. “I’m hopeful that I can use the money to catch up on bills and support friends. I want to pay it forward and help them out.”

Ann is now receiving unemployment benefits. While these benefits are usually reserved for employees who have been permanently let go, under the CARES Act temporarily laid-off workers are now also eligible. Ann says she is grateful, but the system could use some work. She received her first payment over a month after first applying. According to Ann, “the process itself was easy but I’ve had to employ a lot of patience. My PIN came two weeks later than it was meant to, and all the support provided was an ambiguous “hang on, thanks for waiting!””

This is a time of deep economic uncertainty, and no one is struggling more than the workers who usually keep our economy running. Countless systems that are currently in place will be obsolete once this crisis passes. Keeping that in mind, I ask Ann if she will return to Caribou Café to work, or to the restaurant industry at all. She remains optimistic. “I’m going to return to Caribou Cafe for sure. I’m interested to see the difference at our restaurant between pre and post COVID. Also, Olivier, the owner of Caribou, has done everything he can for us,” Ann says. On the other hand, she is unsure about restaurant work in general. “I have no opinion on whether I’d like to stay in the industry because there is no telling where it will go from here. I’m starting to yearn for something more stable and reliable.”

The pandemic has exposed many weaknesses and inequities in our economy.  It of course remains to be seen whether we as a society will leverage this crisis to make fundamental reforms that will make us more resilient in the long run.