The Future of Nightlife and Hospitality Industry in NYC — Post Pandemic

On Wednesday, May 26th — there was an panel conversation between business and community leaders about how conversion to employee ownership can help NYC restaurant and hospitality businesses survive and thrive in our post-pandemic future.

Image via The Hollywood Reporter

“There is no question that this past year has been one of the hardest in recent history for small businesses and workers alike, particularly NYC’s nightlife and hospitality sectors who typically thrive — and residents and tourists can be out and about in all five boroughs and can engage in close quarters together.”

“We also know when there is an economic recession in tending the labor market, not to mention a lingering public health crisis that often small business owners are the first to contract. They are no longer able to support their talent, and they are no longer able to contribute their valuable goods and services that they typically have to their communities.”

“In New York City, according to the Mayor’s Office of Workforce Development report — there are 220,000 small businesses in New York and 98% of them has less than 100 employees and 89% of them has less than 20 staff. Moreover, half of the private sector of the workforce is with small businesses. That means when small businesses falter, so do our workers. Over the course of the last year, we have seen 600,000 jobs loss. We’ve seen thousands of businesses temporarily or permanently shutter. This disproportionately impact low-income workers, communities of color and young adults.”

“It is important for workforce development professionals to support those who lost jobs (laid off or furloughed) during the pandemic by connecting them to benefits, essential jobs if possible, and continue to do so as the City opens up.
During this time, it is very important to offer as much resources and tools as possible to small businesses and workers – as this is imperative in our economic recovery as well as an equitable recovery.”


According to Senior Executive Director Ariel Palitz
“Before the pandemic, the Office of Nightlife was dedicated to making sure we were supporting nightlife businesses, helping to elevate nightlife culture, promote safety, harm reduction, equity, as well as improve quality of its life. And while those are still our priorities, the pandemic really did obviously shift our energy into crisis management mode to ensure that this industry not only survives this, but comes out stronger than ever before. What the Office of Nightlife is hearing and learning from the industry is that this is still a very dark time, even though we are so grateful to see the light coming and the opening, and the return to sociability.

There is going to be a struggle coming back. This virus hit the heart of social gathering, the heart of this industry and so the recovery — the financial recovery is going to be a long road ahead. We know that we’re hearing that it’s very difficult to find employees, trained employees to lure them back into the workplace — and we know that is a real struggle that we’re working with.”

Ariel Palitz also highlights the importance of mental health — that “the mental health issues are underlying not only for the owners and workers but for patrons — and these are all the things that we are going to have to address, continue to address in a very thoughtful manner. But I bring all of this up because it’s also a real opportunity for creative solutions and to see what was a near collapse, and perhaps, even a not guaranteed return that we have an opportunity now to really look and see how can we do things that are not like before but better.”

“And so what the Office of Nightlife has done in the past 12 months was to see where are those opportunities where we can make those types of improvements — one of which was an initiative that we created called, MEND NYC. It is a five-borough initiative. It stands for Mediating Establishment and Neighborhood Disputes. Everyone in the hospitality industry knows that much of their enforcement is complaint driven. At times it could just be one person upstairs calling 311 anonymously and you don’t know who that person is or what the complaint is until you have a visit at the door.
What we created was an opportunity to mend relationships between the residents and the owners through free mediation and to find compromise through communication, and to establish direct contact — and so next time when it is a little louder they call you, and not necessarily an enforcement.
That is one creative solution I encourage everyone to check out as we start to get more and more vibe through both indoors and outdoors.
We help to launch curtains up with our partners at SBS (NYC Small Business Services) to help you through your application processes through the federal grant programs so you don’t have to figure this out all on your own.”

“We also are starting a new mental health initiative with the mental health community — new mental health community office called ELEVATE for the nightlife industry to preserve and protect venues that foster connection, creativity, and personal expression through programs to support cultural spaces and the New Yorkers who work and perform in them.


The real question: How do we innovate?

There is a willingness in small businesses to innovate all the time. And the pandemic brought on a need to innovate and to think what’s next and what’s different. Restaurants and many other businesses in the hospitality industry had to rethink about how to continue doing their business in the city. So how do we leverage that and go into more change in a way that can really help?
With small businesses and restaurants, people will always need to eat and will always need to have these establishments. How do we have them in a way that strengthens our community’s wealth and each other’s livelihood? How can we make it an experience that everybody can enjoy?

According to Rafael Espinal, the Executive Director of a non-profit called Freelancers Union mentions that — “the challenges that the hospitality industry and nightlife faced during the pandemic were rising rents, real estate playing a role in shaping which small businesses would survive or continue to exist in our communities. There was a lack of sensitivity from our neighbors on these establishments, which led to over enforcement — posed another challenge. For decades, when we talk about New York City and the overall ecosystem, night life which helped create our city’s identity/brand, was never really part of that conversation.
If we look at the numbers, there are over 300,000 jobs and over 25,000 businesses across the city. They have a huge economic impact, not only financially but also culturally.”

“Housing, infrastructure, roads fits into the overall equation — nightlife has to be part of that conversation in order to ensure that NYC continues to succeed. The pandemic has created a whole different challenge — a lot of employees have lost their jobs because of the fact that businesses had to operate at one point — at zero capacity, then at half capacity and now everything is opening up. A lot of folks are out of work, a lot of businesses had to close completely because they couldn’t make the economics to work in this time.”

“We can all agree that having a conversation around the work-cooperative model — where the employees have a stake in the business where the employees become owners of the business, it really will create a stronger foundation moving forward.
When you have more than one person who has an interest in the viability of that business, you’ll have more resources to pull from.
When there is a common goal as they open, when there is a common goal to ensure that you are producing the services to the community, when there is common goal in ensuring that all of the workers are being treated equally, there is a lot of energy there that will create a strong foundation.”

“Real estate will continue to be a question in the background. It is a little tougher to control — but we can control what the business model is going to look like moving forward. We can also control the laws/impacts that are coming out from City Hall. There is a lot to unpack here and I am excited to know what the future of nightlife and hospitality will look like.”

CNYCA’S COVID-19 Economic Update: Job market behavior in a pandemic—no easy answers

Disclaimer: Content in this article was obtained from NYC Employment + Training Coalition’s (NYCETC) NYC Workforce Weekly and the Center for New York City Affairs (CNYCA) to serve as a resource for job seekers and those who are curious/interested in learning more about the current economy of the workforce.

Source:
Original article HERE / Past installments on CNYCA’S COVID-19 Economic Update HERE


We’ve all seen the “Help Wanted” signs in the windows of our neighborhood businesses. It’s a reassuring sign that business is coming back, and that our sequestered days might be waning. On the other hand, how can it be that jobs are going unfilled when we know that three-quarters of a million New Yorkers are jobless or have exited the labor market over the past year?

Many businesses are right to ask whether the extra $300 in weekly unemployment benefits available through September 6 is keeping workers home. But as journalist Greg David noted in a recent article in The City on this issue, “it’s complicated.” David cited a recent Brooklyn Chamber of Commerce survey in which 42 percent of businesses felt that federal unemployment benefits were discouraging return to work. Yet, the Brooklyn survey, according to a report in the Post, also found that 41 percent of businesses said they couldn’t provide enough hours to employees, 28 percent said employees had moved on to other jobs, workers had safety concerns in 12 percent of the cases, and employee health issues were cited by five percent of businesses. And several businesses also noted that lack of child care was keeping some workers home.

Clearly, a multiplicity of factors is influencing job market behavior as pandemic business restrictions are eased, Covid case rates decline, and vaccinations become more widespread. It is not so clear cut that unemployment benefits are the primary cause for some jobs going unfilled, although the availability of benefits likely does make it possible for many of the unemployed to exercise greater latitude in making decisions in the best interests of their families, personal health, and career choices. But isn’t that appropriate considering that the unemployed lost their jobs due to a public health emergency not of their making, and that the pandemic has upended livelihoods and family circumstances for millions?

Beyond survey perceptions there are various economic indicators that reinforce the notion that there are no simple or easy answers on this question. Even though an earlier $600 weekly federal unemployment supplement ended at the beginning of August last summer, there was no local job surge in ensuing months. Rather, the second wave of Covid infections beginning in October kept the city’s overall job level flat for several months. Jobs didn’t start to rebound strongly until February and March (NYC added 90,000 jobs over those two months), even though the new $300 weekly federal supplement began in early January.

Employment in restaurants—where unfilled job openings are most common—rebounded some in the fall, fell off again during the winter, and started hiring again in February. This erratic pattern may have signaled an instability that deterred workers from returning. (April payroll data for New York City will be released on May 20.)

The fact that employment in child care centers has not risen appreciably since November also supports the notion that the lack of child care capacity has been preventing some parents from returning to work. The March 2021 employment level was still 21 percent below the pre-pandemic level, and there was a severe crisis in child care accessibility and affordability before the pandemic. The very slow pace with which the State has been moving to disburse emergency federal child care funding has further exacerbated the child care situation.

Since most neighborhood businesses are not back to full capacity, many are not able to offer their employees full-time schedules. Unlike other states, New York State’s partial unemployment system is particularly antiquated and confusing for workers to navigate. There are “cliff effects” as the figure below indicates, where an additional hour of part-time work can dramatically reduce partial unemployment benefits, unduly complicating a worker’s decision about returning to work part-time. State legislators and the governor have had proposals to remedy the problem since January but have not yet reached agreement on a resolution. Meanwhile, an estimated 25 percent of the two million-plus UI recipients in New York State are receiving partial benefits.

Several news reports indicate that some restaurant businesses have raised pay offers or enhanced benefits to attract workers back. That is what labor economists would expect to happen when recruitment problems persist. The need for higher pay is particularly warranted given that New York State pay regulations permit a “subminimum wage” for tipped restaurant workers of $10 an hour whereas the wage floor for most New York City workers has been $15 since the beginning of 2019. Since most restaurants are far below pre-pandemic business levels, tips are likely a fraction of what they previously were.