Minnesota’s Economic News – W/E 4/16/21
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When social distancing measure was first introduced, restaurants and bars were among the first business establishments required to cease operations. This makes sense due to the nature of their service; they require close personal contact. But this was still a hard-hitting sacrifice for owners of these businesses. A majority of which are small establishments.
Fast forward to June 1st, these establishments have been given the green to open. This is a chance for these small businesses to recover. Except these reopening instructions have come with so many restrictions it would be almost impossible for restaurants to operate let alone make a profit.
Governor Walz announced on May 20th that restaurants, bars, barbershops, and other establishments like saloons and breweries can open on June 1st with limited capacity. Establishments would also have to follow distancing measures, as well as some health requirement guidelines.
This would all be good and well if this announcement did not come with heavy-hitting restrictions that would make operations outright unprofitable or impossible for some businesses. Diners and restaurants, for instance, will only be allowed to do outside seating, and hair and nail salons will only open at 25% capacity.
Restaurants are finding it hard to operate with new rules
The day after restaurants were allowed to open trade groups are pushing for Governor Walz to loosen restrictions on bars and restaurants. These groups are calling for the removal of the outside seating requirement for reopening. These restrictions are preventing other businesses from opening.
So far any establishment that cannot physically seat people outside has not been able to open and operate legally. Furthermore, restaurants have been forced to plan their business around the whims of erratic weather, which is problematic. This new arrangement, in so many ways, does not differ significantly from the previous arrangement of requiring dining places and bars to stay closed.
These businesses are in danger of closing at a time when they believed they would be able to open and resume their operations. They are furthermore in danger of losing clients if they stay closed for much longer due to all these restrictions.
Minnesota businesses are losing revenue to nearby states like Wisconsin
Since the state of Wisconsin opened, a lot of people from other states have flocked there to patronize their businesses. Minnesota is one of those states. People living in Minnesota close to Wisconsin have no issues crossing the border to access some services there. But as of late, that number of people crossing the border has gone up since Wisconsin opened its bars and restaurants.
It’s not unusual for Minnesotans to cross the border for dining, especially as the weather improves. Hudson restaurant operator Pete Foster sees a big influx of Minnesotans each summer. But the staff at his local restaurants estimated up to 95 percent of their customers were first-time visitors in the first week of business after reopening.
“I think what we’re seeing is just an increase in those guests coming to us,” Hudson Chamber of Commerce and Tourism Bureau president Mary Claire Olson Potter said, “because of what is happening in Minnesota, as their restrictions aren’t quite as lifted as ours are.”
This means for our businesses, they are losing potential revenue which will definitely set them back for a long time. This is a matter of not only delaying livelihoods but also delaying growth, and delaying people their way of life.
Deaths are still concentrated in LT facilities
It may be argued that closing is necessary, to combat the spread of the disease, but given what we know this is not necessarily true. We have already seen and we continue to see that Minnesotan Covid-19 deaths have been focused in the long term care facilities, among the elderly and those with pre-existing conditions. These are a specific group of people, they can be isolated and get tested while allowing other parts of the economy more freedom.
It is true the restaurant industry is facing other issues. People are a little reluctant to go eat out or drink at bars, but these rules are making that problem even worse for businesses. Easing some of these restrictions will go along way in making things easier for businesses as well as restoring people`s confidence.