This morning, Andy joined Dagen McDowell on Mornings with Maria to discuss how independent restaurants are having a difficult time getting through the current economic slowdown. Andy noted that the hardest hit restaurants are those that depend on full dining room service, versus those that can offer third-party delivery and drive-thru service. In fact, Andy points out that a lot of the major quick service chains are actually doing better than they did last year with over 90% of their business coming from drive-thru sales.
Andy then discusses how the Paycheck Protection Program has been a big help to restaurants and that many would no longer be around if not for this type of assistance; a different question he poses, however, is whether the government has the ability to keep these restaurants afloat for another six to nine months should the state of things remain the same. A good location and solid ownership will allow many to reopen, but the main concern for restaurants is the long term, and how it would take a lot of government resources to keep certain restaurants afloat through November, December or January- when a vaccine might be released that will allow dining rooms to fill up again.
Dagen then introduced an idea from Larry Kudlow, director of the White House National Economic Council, which states that rather than extending the extra $600 a week in unemployment – that these benefits should instead be turned into a work bonus. Andy agrees it’s a “great idea” – adding that “we need to start rewarding work and stop rewarding people for staying home,” further noting recent survey findings that show that 76% of Americans oppose unemployment insurance benefits that are in excess of what a person could make on the job.
In closing, Andy states that while what Larry suggested is a good idea, things can be made even simpler by taking government out of the middle of this by having a payroll tax holiday though the end of the year like Art Laffer (American economist and author) and Steve Forbes (American publishing executive) have been proposing – this concept would offer the same result and be very effective.
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