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Some businesses won’t be reopening after the Coronavirus shutdown

The shutdown of large sections of Minnesota’s economy to fight the spread of the Coronavirus has been bringing the best out of our state’s business people. Small breweries have been doing curbside pickup and family restaurants have been doing takeout in a bid to cover their fixed costs and stay afloat.

Sadly, try as they might, not all of those businesses closed by Governor Walz will be reopening. As the Minneapolis/St. Paul Business Journal reports:

When the coronavirus pandemic forced restaurants to shut down their dining rooms, Ginger Hop joined a mass pivot to pickup and delivery. Less than two weeks later, the Northeast Minneapolis restaurant and its lower-level nightclub, Honey, are closing for good.

[Owner Charles] Lodge said the line of customers waiting for carryout orders offered a “glimmer of hope” for Ginger Hop in the first days after Gov. Tim Walz ordered dining rooms and bars to close March 16, in an effort to slow the spread of COVID-19. But he said rising wages and new city regulations had already shaved his margins razor-thin, and the pandemic restrictions were the final cut.

“It was getting tighter and tighter every year that we went on, and then COVID-19 came along and it’s like, slam the door. Shut it down,” he said.

This last point illustrates how harmful city policy has been for Minneapolis’ small business owners in recent years. In November, Emily Cassel of City Pages wrote about some of the issues facing Twin Cities restaurants:

The $15 minimum wage increase in Minneapolis and St. Paul isn’t a non-issue. Restaurant owners certainly are thinking (and, in many cases, worrying) about it. It’s also not their only financial concern. Healthcare, rent, property taxes—they’re all on the rise, and restaurants run on almost laughably low profit margins as is.

A public health crisis like the Coronavirus is bound to cause economic harm. Some business will survive, some won’t. But all would be in a better position to face it if government, in this case Minneapolis the city council, would stop trying to shut the door on them.

John Phelan is an economist at the Center of the American Experiment. 

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