PROVIDENCE, R.I. (WPRI) – Gov. Gina Raimondo on Monday ordered a shutdown of all dine-in food services at restaurants and bars, casting a cloud of uncertainty over the employment of tens of thousands of Rhode Islanders.
The state’s food services, lodging, leisure and hospitality industries together employed about 114,000 people in January, according to the R.I. Department of Labor and Training, and already hundreds of Rhode Islanders have filed for unemployment benefits.
The number of COVID-19-related claims for Unemployment Insurance – also known as UI – totaled 552 on Saturday compared to only 10 a few days earlier.
“Our unemployment insurance claims … are skyrocketing,” Raimondo said during a press conference Monday.
The second-term governor, who has been holding daily briefings to update the public on the public health crisis, said the state will make up for the financial toll the shutdown will inevitably have on those affected. But it’s tough to predict what short- and long-term effects such an order will have on employees, businesses and the overall economy.
“We need true financial support, not only low-interest loans, but cash stimulus,” tweeted David Dadekian, a food-industry advocate and president of Eat Drink RI, adding that the stimulus could include tax breaks, rent abatement and payroll tax cuts.
Rick Simone of the Federal Hill Commerce Association said they expect more than 2,000 employees from businesses on Federal Hill will be applying for unemployment insurance and temporary disability insurance.
Most private-sector employees are eligible for some level of earned sick and safe-leave time under state law, but whether that’s paid or unpaid depends on the size of the employer. And not everyone is eligible, including those who work for themselves in the so-called “gig economy,” such as Uber and Lyft drivers.
The demand for public assistance will likely continue to increase, especially if the shutdown lasts for a long time. And while Raimondo, who ordered the shutdown through March 30, said the unemployment insurance fund is well-capitalized at the moment, she admitted it’s not money that will last forever, especially without assistance from the federal government.
“We’re in good shape, but in a week from now I really hope the federal government has [taken action],” she said.
U.S. Congress is considering a massive spending bill related to the coronavirus response, which includes a component for unemployment insurance, but Raimondo is concerned the $500 million designed for the entire country isn’t likely to be enough.
For employers, who are losing money every minute that there’s a shutdown, Raimondo has called on the Small Business Administration to allocate funds to a low-interest loan program, which gives small-business owners working capital to pay for fixed costs, such as rent and equipment costs, during a time of crisis.
Raimondo hopes the loans might soften the blow of reduced business activity, but she recognized the fact that the shutdown — which for some businesses means no sales for at least two weeks — could be detrimental to the industry.
“I know this is brutal,” Raimondo said. “We’ll figure out a way to make it up to you.”