An iconic New Orleans eatery, K-Paul's Louisiana Kitchen, is no more, one of countless economic casualties of a pandemic that has flattened businesses across America.
“We hung on as long as we could,” co-owner Brenda Prudhomme told VOA, “but we had no choice but to shut down.”
Closing K-Paul’s was no easy choice. The restaurant had been a local favorite in the heart of the city’s legendary French Quarter since her aunt and uncle opened its doors 40 years ago. Her uncle was Paul Prudhomme, a nationally recognized celebrity chef credited with popularizing Creole and Cajun cuisines through his best-selling cookbooks and beloved television shows.
“K-Paul’s means so much to us, and to the customers who have been dining here for decades,” Prudhomme said. “But when something like a global pandemic happens and the government can’t do enough to help small businesses, we’re only left with difficult choices.”
Months of negotiations in Congress have stalemated on a new round of economic stimulus that would provide additional relief to struggling Americans. The most recent attempt failed in the Senate earlier this month as Democrats pushed for more expansive benefits while Republicans sought a more limited package. Both sides have blamed each other for the impasse. Many view Congress as unlikely to pass anything before the November election.
Congress’ inability to forge an agreement is having far-reaching consequences for tens of millions of Americans who received federal help earlier this year that has run out.
Round 1 not enough
When the coronavirus pandemic took hold in the United States in February and March, the nation’s economy appeared headed toward an unprecedented collapse. By April, the U.S. unemployment rate had reached 14.7%, the highest rate since the Great Depression.
In late March, Congress passed the $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act. The massive expenditure provided a substantial financial boost for many struggling Americans, including a $600 weekly supplement of unemployment benefits and one-time stimulus checks of up to $1,200 for middle- and lower-income earners.
Those payments ceased in July, severing an important economic lifeline for New Orleans, where the hospitality and tourism industries, both hit hard by the pandemic, employ about 20% of the local workforce.
Kevin Caldwell found that initial infusion of revenue a lifesaver for his family. Before COVID-19, he bartended at a popular music club while his wife worked at a well-known restaurant.
“I’ve been in the service industry for decades,” Caldwell said, “and I know live music is going to be one of the last things allowed back at the end of this crisis. It’s beyond our control, so we just have to wait and hope we get some support.”
In the first few months of the pandemic, Caldwell said he and his wife were both receiving $847 in unemployment insurance per week thanks to the CARES Act. When the supplement expired, their weekly unemployment insurance checks dropped to $247.
“We’re not in a personal crisis yet, but we’re getting close,” Caldwell said. “Pretty soon we’re not going to be able to afford our health insurance, and that’s not ideal during a pandemic.”
Waiting for Round 2
The CARES Act wasn’t meant to help only struggling individuals. Initiatives like the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loans (EIDL) were funded to assist businesses affected by the pandemic by helping them retain and pay employees, and to survive revenue losses.
Businesses that qualified for a PPP loan, for example, were awarded enough funding to pay their workforce their salary for about 10 weeks. Many economists believe it could be 2022 or even 2023 before the U.S. economy fully recovers.
“We received help from those programs,” Prudhomme said, “but it’s really just a shot in the arm. Spring revenue is huge in New Orleans, because the summers get pretty dead here. Now we lost spring, summer and were going to miss the fall, too. The funding we got wasn’t enough to sustain us. We were hoping for a second round, but it never came.”
Another New Orleanian, Joe Frisard, has experienced similar challenges. He is a self-employed freelancer, with income streams as diverse as videography, restaurant work, and renting part of his home on Airbnb. He received a $1,200 stimulus check, as well as some assistance from the EIDL program, but said neither is sufficient during a pandemic that drags on and on.
“I’ve lost 40% of my income during COVID, but all my bills are still there,” he said. “During the spring, with all the New Orleans festivals, I could make as much as $4,000 per month renting out a room in my home. Because of coronavirus, my total from mid-March to May wasn’t even $1,000 combined.”
Frisard said he felt he could last five months before he had to start pulling money from his retirement fund. But he’s angry because he thinks politicians should be doing more to help Americans navigate a crisis this rare and severe.
“I’m lucky to even have money saved,” he acknowledged. “A lot of people don’t have that. People are going homeless. They can’t pay for food. And somehow Congress isn’t able to pass another stimulus? They’re playing politics with peoples’ lives and it’s not moral.”
Kevin Caldwell said he’s watching what both parties do as debates around additional support for struggling Americans and businesses continue because it’s an issue that is hitting close to home for him, as well as for most Americans. It’s also an issue he feels should factor into November presidential contest as well as congressional elections.
“It affects me, it affects my wife, it affects the company at which I work, it affects my co-workers, and it affects most New Orleanians in some way,” he said. “So, yeah, I’m keeping a close eye on it. And what each party does will directly affect how I vote this November.”