While the COVID-19 pandemic has left no section of society unscathed in terms of the actual virus and the knock-on effect on jobs resulting from the economic turmoil, those with the fewest assets on the bottom rung of society, middle-aged and elderly people, have been hit the hardest.
According to the Ministry of Labor’s latest data on unpaid leave, 987 employers have reduced the working hours of their employees, affecting a total of 10,229 individuals. It is the fist time since December last year that the number of workers on reduced-hour contracts has exceeded 10,000.
The industries worst affected by this phenomenon are hospitality and catering, with 2,864 employees working reduced hours, a twofold increase on the previous period. This shocking figure is unfortunately expected to rise in the short term due to the government’s extension of the national level 3 COVID-19 alert.
The catering industry forms a significant part of the overall economy, yet turnover for the industry hit a new multi-year low this year for the month of May, reaching a meager NT$50.2 billion (US$1.8 billion). This was a drop of 19.1 percent year-on-year, and last month’s figures are expected to be even worse.
Although local government heads have occasionally crossed swords with the central government over aspects of its COVID-19 strategy, once the virus situation improves and restrictions begin to be relaxed, food and beverage enterprises will undoubtedly be the final ones allowed to resume normal operations.
During the height of the pandemic last year, more than 100,000 restaurants in the US were forced to close their doors. As the pandemic eased, a large number were unable to resume business. US restaurateur and TV personality David Chang is pessimistic and believes the industry might never recover. Taiwanese chef Andre Chiang (江振誠) expressed a similar view: “The pandemic has not been a blow to the catering industry; it has decapitated it.”
However, Chiang does not share Chang’s pessimism, and instead views the pandemic as a “general health test” for catering businesses: Do they have enough funds in reserve, have they provided adequate protections for their staff? Chiang believes there will be a reckoning once the pandemic recedes, and the catering market, which has been extremely frothy in the past few years, will go through a cooling period as entrepreneurs become more cautious about entering the food and beverage industry.
The US’ phased reopening of food and drink outlets should be studied by the government as a model for emulation. There is no need to jump from the present takeout and delivery-only restrictions to a full-scale reopening of restaurants. The government could initially phase in outdoor dining, although this would be tricky to implement in densely populated Taiwan, where a restaurant’s retail space occupies a tiny footprint compared with leased space in the US.
The rules could later be further relaxed to allow for indoor dining, but within restrictions on the number of diners.
Even once the local COVID-19 outbreak has been brought under control, business models that worked in the past might no longer be feasible, and people’s habits might have irrevocably changed. Just a few months ago, consumers and the catering industry were faced with a decision over whether to adopt takeout and delivery as a result of the level 3 restrictions. Almost overnight, engaging with the takeout and delivery model became an absolute must.
Prior to the virus becoming a serious problem in Taiwan, most industry experts believed that it would be the older, traditional restaurants that would fall by the wayside, as it was expected they would have the most difficulty incorporating new delivery systems into their operations.
However, after the level 3 alert came into force, it was the modern and trendy restaurants who were faced with zero dine-in customers and were restricted to takeaways and deliveries — while still having to pay high rents. They were left struggling to break even, let alone make a profit.
While the government’s financial support did provide some relief to the customer service side of the industry, it is still just an emergency measure that cannot last forever. Many individually operated food and drink businesses will not be able to hold out until the restrictions are eventually lifted.
To deal with the drastic changes that the pandemic has inflicted on the food and retail sector, the government must address the structural problems of the labor market. It is fond of taking credit for the pre-emptive measures it took in late 2019 and early last year, which have saved Taiwan from the worst of the pandemic.
The government should ensure that this philosophy is carried forward into pre-emptive action to deal with the fallout from the lockdown on the catering industry.
Shan Han-yu is a journalist and TV news editor.
Translated by Edward Jones
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