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The Restaurant Industry in New York City: Tracking the Recovery

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The Restaurant Industry in New York City: Tracking the Recovery OFFICE OF THE NEW YORK STATE COMPTROLLER Thomas P. DiNapoli, State Comptroller Rahul Jain, Deputy Comptroller The Restaurant Industry in New York City: Tracking the Recovery The restaurant industry is essential to New York Highlights City’s social and economic fabric. From small, family-owned restaurants and food carts to four-star l New York City’s restaurant industry had world-famous establishments, the City abounds with 23,650 establishments in 2019, provided restaurants that offer cuisines from every corner of 317,800 jobs, paid $10.7 billion in total the globe. wages citywide, and made nearly $27 billion in taxable sales. Restaurants lend vitality to each neighborhood and are integral to Manhattan’s central business districts l Prior to the pandemic, from 2009 to 2019, and the City’s vibrant tourism industry, attracting jobs in the restaurant industry grew by 61 millions of visitors each year who spend a total of percent and establishments grew by 44 $46 billion annually. The industry is the second- percent, double the overall rate of growth. largest component of tourism spending, behind 1 l More than 60 percent of NYC resident lodging. Residents and tourists alike are drawn to restaurant workers were immigrants in live in and visit areas with thriving retail corridors 2018, compared to 45 percent across all anchored by restaurants. The industry contributed occupations; in 16 neighborhoods the about 15 percent of total taxable sales citywide share was between 70 percent and 90 in 2019. percent. After a decade of job growth that was more l As of 2018, 44 percent of the City’s than double the rate for local jobs overall, the residents working in the restaurant industry restaurant industry reached its highest number were Hispanic and 20 percent were Asian, of establishments and jobs ever in 2019. Despite higher than overall employment shares. relatively lower average wages, restaurants provide a steady source of jobs for many residents, l By August 2020, employment in the restaurant industry was still only 55 percent particularly Hispanic and Asian minority populations of its level in February 2020, before the and immigrants. pandemic hit. Since March 2020, the restaurant industry has l While there are indications that revenues been hit very hard by the COVID-19 pandemic. for open restaurants improved since Mandatory closures, stay-at-home and social- their low point in March 2020, many distancing orders, the onset of a severe economic establishments are still struggling and recession, and travel restrictions have resulted in others remain closed. unprecedented upheaval for the industry. l On average, 44 percent of restaurants have As a result, many restaurants and bars have closed used outdoor seating, suggesting reduced or significantly reduced their operations. Since these operations and closures are significant establishments often operate on tight margins in the and may continue if further operational or best of times, there are growing fears that many will financial support is not forthcoming. be forced to close permanently if financial support is not forthcoming. Report 4-2021 | September 2020 1 Industry Pressure Mounts Restaurant Industry Profile As a response to the pressure created by these The New York City restaurant industry accounted for restrictions and behavioral trends, the City has about 1 in 12 private sector jobs and establishments expanded outdoor dining, capped takeout-app citywide in 2019 (8.1 percent of jobs and 8.7 percent fees, reopened its commercial lease assistance of firms). Unless otherwise noted, all data on program and extended small business loans. Other industry employment by place of work was made jurisdictions facing similar problems as New York available through the New York State Department of City have provided deferrals for tax payments, rent Labor Quarterly Census of Employment and Wages relief and stipends for meals. (QCEW) According to the U.S. Bureau of Labor Statistics, nationally, the industry share is higher On September 9, Governor Cuomo announced that for jobs (9.5 percent) but lower for establishments restaurants in New York City would be allowed to (6.6 percent). open for indoor dining on September 30. Among other requirements, occupancy will be limited to In this report, the terms “restaurant industry” and 25 percent of capacity, temperature checks will be “restaurants and bars” include all of the following required of all guests, contact-tracing information food and beverage services. Most restaurant must be left for one member of each party, employment in the City (77 percent) was in full- restaurants must close at midnight and masks must service restaurants that offered wait-service dining, be worn when not seated at a table. and in limited-service restaurants such as fast-food locations, pizzerias and cafes. Bars accounted for On September 16, the New York City Council another 5 percent of the jobs, and the rest of the passed a bill allowing restaurants to add a temporary industry included establishments such as snack COVID-19 recovery charge of up to 10 percent of bars, buffets and caterers. a patron’s bill, excluding orders for takeout and delivery, which the Mayor is expected to sign. Reflecting increased demand for both full-service dining and takeout services, the net number of On September 25, the Mayor announced his restaurants and bars in the City increased by more intention to extend outdoor dining by continuing than 7,000 from 2009 to 2019 to reach 23,650 the Open Restaurants program as well as the establishments. This represented a net increase of Open Streets: Restaurants program, beyond the 44 percent, more than double the rate of growth of October 31st deadline and make them year-long businesses citywide (19 percent). and permanent. Employment in the industry also grew much faster Prior to these major changes announced in than total private sector employment. Since 2009, September, restaurant owners and advocates more than 120,000 restaurant jobs were added to argued that measures the City had put in place reach 317,800 jobs in 2019, a 61 percent increase were not sufficient to avoid extensive failures. and double the growth rate for total employment Estimates of the potential permanent closures of (30 percent). City restaurants and bars over the next six months to a year have generally ranged from one-third to Most restaurants and bars are small and reflect one-half of all establishments that existed before great diversity. In New York City, 80 percent have the pandemic. At the high end, that could result fewer than 20 employees (less than 1 percent have in a permanent loss of nearly 12,000 of the City’s 500 or more employees), yet they represent the restaurants and bars, and nearly 159,000 industry cuisines of more than 150 different countries. jobs, although the opening of new restaurants would mitigate some of these losses. It is unclear what impact the recent government actions will have. 2 Report 4-2021 Restaurant Employment in NYC Citywide, 250,900 residents (both employed and self-employed) held occupations in the restaurant industry, with average annual earnings of $30,500 in 2018 (the latest year for which this data is available). Additional employees commute from surrounding areas to work in the City’s restaurants. All data on restaurants workers by place of residence use the U.S. Census American More than half of the City’s restaurant employment Community Survey, 2018 one-year estimates, in 2019 (192,500 jobs) was located in Manhattan, unless otherwise noted. with another 51,700 jobs in Brooklyn, 49,100 jobs Among all the City’s neighborhoods, Jackson in Queens, 15,900 jobs in the Bronx and 8,500 jobs Heights/North Corona had the most residents in Staten Island. The industry had one of the lowest working in the restaurant industry, Elmhurst / South average salaries ($33,700) among all private sector Corona had the second-highest, and together the industries. two areas accounted for 24,000 restaurant workers, The average salary was less than $28,320 in all nearly one in 10 citywide (see Appendix A for more boroughs except Manhattan, where it was $40,200 detail). in the neighborhood with the most establishments The 10 neighborhoods with the most restaurant and employment. workers had 36 percent of the total citywide. In In Manhattan, most establishments and jobs are these 10 neighborhoods, restaurant workers also in Midtown and Lower Manhattan. The Chelsea/ represented a higher share of the working residents Clinton/Midtown Business District, which includes (between 7.3 percent and 14.9 percent compared to the New York City Theater District, had the highest 6 percent citywide). restaurant employment among all the City’s 55 Including both immigrants and native-born Census-defined neighborhoods (nearly one in residents, Hispanics made up the largest share of four jobs citywide). Battery Park City/Greenwich restaurant workers (44 percent) and a higher share Village/Soho had the second-highest restaurant than among all workers (see Figure 1). Asians also 2 employment. represented a higher share of restaurant workers Together, these two areas made up nearly than among all occupations citywide, in contrast to 40 percent of the City’s restaurant jobs. Restaurants either Whites or Blacks or African Americans. as a share of establishments were highest in FIGURE 1 Chinatown/Lower East Side, at 20 percent. The Share of Workers by Race and Ethnicity restaurants and bars in these areas face special challenges due to the declines in tourism, office Restaurant All NYC Race / Ethnicity Workers Workers employees working on-site, and some residents Hispanic 44% 27% relocating to second homes outside the City. White 21% 35% According to the New York State Department of Asian 20% 15% Taxation and Finance, the restaurant industry also Black or African American 13% 20% contributed nearly $26.9 billion in taxable sales Other 2% 3% from March 2019 through February 2020, about TOTAL 100% 100% 15 percent of total taxable sales during that period, Sources: U.S.
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