Nearly a half a million people work in Bay Area restaurants, stores and venues that have been required to shut down or drastically scale back operations to help curb the spread of the coronavirus, a Chronicle review of federal data released by the Associated Press found.
Another 69,500 people work in the hotel and air travel industries, which have been severely hampered by a sharp drop in tourism and flights, data show.
Those employees received about $4.7 billion in wages during the first quarter of 2019, underscoring the severe blow the pandemic could cause to the local service economy. Countless more in the nine Bay Area counties have been affected by the shuttering of nonessential businesses in other sectors, such as commercial construction and manufacturing.
“When you’re a small business and you have an immediate drop in revenue, it’s completely paralyzing,” said Lauren Crabbe, who co-owns Andytown Coffee Roasters in San Francisco with her husband.
Crabbe had to cut hours for 45 employees and shut down two of her four stores due to weeks of falling sales as many of her customers were asked to work from home — first by employers, then the city. She’s trying to keep money flowing to the business and its workers through a virtual tip jar and a website that lets people buy pastries and coffee for health care employees, but if the drop in business stretches for months, she worries the company won’t be able to rebound.
“If Andytown fails, it will completely destroy our lives. It will devastate us,” Crabbe said. “And most small businesses in San Francisco are all in the same boat.”
Not everything in the Bay Area is closed or dealing with a loss of business. Hospitals, residential construction sites, grocery stores, some manufacturing plants and other companies providing essential services can stay open. Many offices have physically shut their doors but continue to operate as scores of employees work remotely — a luxury most food vendors and retail stores don’t have.
The Chronicle analysis focused on restaurants, bars, sports venues, museums and certain retail stores because the service sector has been hit particularly hard by the shelter-in-place policies, experts said. Not all 465,000 employees in those industries are out of a job, but many hourly workers have been laid off or had their shifts reduced, while small-business owners have watched their revenues plummet.
Unite Here, the largest labor union for hospitality workers, said Wednesday that it expects 80 to 90 percent of its 300,000 members to be out of work.
Anand Singh, president of Unite Here Local 2, which represents 14,000 hospitality employees in San Francisco and San Mateo counties, said that 4,000 members were laid off last week, and that the number is expected to double this week, with large hotels closing down. Many workers are struggling to live without a paycheck in one of the most expensive areas in the country, Singh said.
“With the income disparity, wage gap and high cost of living in the Bay Area, I think this can have a particularly devastating impact on working people and people in the service sector,” he said.
Under the current orders, all nonessential businesses in the Bay Area are to remain closed until early April. Depending on the length of closures and travel restrictions, economists have given varying forecasts about what the outbreak could mean long term.
The pandemic hit when the economy was in a record expansion. Consumer debt and low-quality business debt, which can be signs of economic stress, were rising, but so were personal savings.
“All these rolling shutdowns are going to add up to a very sharp drop in Bay Area economic growth,” said Scott Anderson, chief economist with Bank of the West in San Francisco. “Psychologically it’s doing a lot of damage.”
Anderson said he expects a U.S. recession to start in March and last until the end of the year. Unemployment will rise, but not as high as it did during the great recession, he said.
But Christopher Thornberg, founding partner of the research firm Beacon Economics, said that if the restrictions are in place for a relatively short period, forecasts of a severe recession will likely be overblown. “We have a much more resilient economy right now than we did in 2008,” Thornberg said. “These aren’t lost jobs; these are furloughed jobs.”
Amanda Rotondo, who owns Bark Avenue Doggy Daycare in San Francisco, said she originally planned on staying open to care for the roughly 50 dogs that get dropped off at her facilities each day. But when nonessential businesses were ordered to close, Rotondo had to lay off her 18 employees, some of whom had been working for her business since it opened eight years ago.
“It was heartbreaking,” Rotondo said. “My staff is all younger and they live in the Bay Area, and it is already so hard anyway to live here with a paycheck.”
Rotondo, 39, said she has been helping her former employees file for unemployment benefits while also navigating the process herself. In the meantime, she said she has not heard back about whether her landlord will defer the thousands of dollars in rent that she owes each month.
“I’m just worried because I don’t know how long this is going to last,” Rotondo said. “And I don’t know how long it is going to take to recoup these losses.”
Assistance plans and protections are being provided at the federal, state and local level, including a low-interest disaster assistance loan program, an extension on filing taxes and a temporary ban on certain residential evictions in California and commercial evictions in San Francisco.
President Trump signed a multibillion-dollar emergency aid package Wednesday that will give paid sick leave to hourly employees and expand unemployment insurance and food assistance.
While those programs are helpful, San Francisco Supervisor Gordon Mar said business owners and workers in his district — which includes two Andytown Coffee Roasters stores — have more urgent needs that aren’t being met.
“Increasing debt or deferring the payment of taxes or fees is just pushing their problems down the road,” Mar said. “What they really need is immediate financial support.”
San Francisco Chronicle staff writers Carolyn Said and Kathleen Pender contributed to this report.
A caption in an earlier version of this story gave an incorrect name for Misha Zatsman.