The restaurant industry needs a New Deal

OPINION: Canada is already spending billions on bailout programs. It’s time for government to act on another aspect of Modern Monetary Theory — and start thinking jobs programs
By Corey Mintz - Published on Sep 23, 2020
Roadside restaurant seating along Mount Pleasant Road in Toronto on July 25. (Dominic Chan/CP)

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Summer is over. And, despite all the talk about winterizing restaurants patios, that’s not going to happen. I’ve spoken with owners who are trying to clear the logistical and legal hurdles to outfit their outdoor spaces with heaters — Andrea Nicholson is going to host some outdoor events at her Whitby restaurant, Butchie’s Damn Tasty Food; Rob Wilder is experimenting with a ski-themed space behind one of his Toronto restaurants, serving such winter fare as fondu and goulash. Let’s not kid ourselves, though. Californians and Texans will put on cardigans to eat outside in their mildly chilly January. But Canadians are not going to wear parkas and thick gloves to eat eggs Benedict on a patio during our toe-freezing months. Even if restaurateurs can make it possible, I don’t think it’s reasonable to expect that diners will be too willing.

So it’s time to stop kibbitzing over half measures and start talking about the big picture.

Earlier in the summer, when all my conversations were about how restaurants were going to cope with this pandemic — and about the role our governments needed to play — I read a fascinating essay by Tunde Wey in which the food writer and cook argues for letting the industry, in its current form, die.

“An industry where labor is segregated by race and gender, underpaid and uninsured,” writes Wey. “An industry fed largely by an hyper commercial agricultural system that either extracts profits from the environment with little consequences, or offers ethically sourced produce to just a few for a lot. Let it die. An industry where on the higher end is great food at fat prices in spaces that drive up real estate values, pushing property prices higher and poorer people further. And on the lower scale, working poor people, making barely enough to keep them going, serve low nutrition meals to other working poor people, who can’t afford quality housing because of predatory development that supports new restaurants. Let it die.”

Part of what makes Wey’s writing so brilliant is his talent for provocation. “In critique, you have to be hyperbolic,” he told GQ in 2019. “In practice, you need to be nuanced. But one feeds the other. It's hyperbole that creates the space for the nuance.”

When I reached out to Wey, he was patient in explaining the nuance.

“I have a book I should be writing,” said Wey, speaking to me in April from his home in New Orleans. “It was due in December.” I felt immediately better about my deadlines.

While I’ve been advocating for hospitality-specific government assistance, we were on the same page in terms of the innumerable inequities of the industry. I’m always looking for solutions to those problems. But Wey encouraged me to challenge “a bias toward redemptive narrative.” And, given what I know of how our food system treats workers, from field to kitchen to dining room, I was ready to consider that restaurants may be irredeemable in their current form. But contemplating letting them die demands that we consider what would follow their demise.

So I asked the unpleasant question: Which is worse — millions of people with crappy jobs or millions of people with no jobs?

Wey suggests that we explore something economists call Modern Monetary Theory, which (at the risk of gross simplification) involves the idea that currency is a monopoly, as evidenced by unemployment, a symptom of over-restricted supply. To counter that, its proponents argue, we need to print money and create jobs.

“There are so many ingenious ways to create money from nothing — like shorting stocks,” laughs Wey. “Can you imagine the intellectual ability that goes into creating investment products? We have the competence. It just goes in directions that don’t create actual value for most people.”

Wey advocates for a version of the New Deal, the series of Depression-era policies that put Americans to work building bridges, parks, and other public projects but also provided work for artists and musicians.

Economists tell me that, while MMT is still considered radical, we’re already doing the first of its two parts. We did it for the right reasons. The Canada Emergency Response Benefit gave people the financial ability to make the safe choice not to work. But, regardless of the reasons, we have been printing money. Canada is spending billions and the United States, trillions on bailout programs intended to prevent total economic collapse. And, yes, that will likely cause inflation, which many economists dread.

“If the price of that is a little bit more inflation over the next five years, then I think that’s a price worth paying,” says Lucas Herrenbrueck, a professor of macroeconomics at Simon Fraser University, adding that there’s a wide margin between acceptable inflation and disastrous hyperinflation, which is what most opponents of government spending fear.

By printing money at the current scale, Canada and other governments are going through a big unintended test of MMT — not because they want to, but because we’re in caught in an unprecedented crisis, and they have little choice.

So as long as we’re doing the first part of MMT, why not also do the jobs portion and create something for our money that is of value to society?

“I think there will be jobs programs,” says Mike Moffat, a professor of public policy at Western University. “We are probably going to have an army of unemployed and underemployed people.”

What we don’t have are shovel-ready infrastructure projects for this particular cohort. Previous recessions saw mass layoffs in construction and manufacturing, so there’s a playbook for how to put people from those fields to work. The biggest obstacle will be the government’s lack of understanding of such sectors as hospitality and tourism, which are currently hardest hit.

“The bottleneck is the lack of ideas,” says Moffat. “The lack of understanding of who is this pool of labour that’s not being utilized. What are the programs that different levels of government use to get them productively doing something? What are the skills and how can they be transferred to something else? Nobody really knows.”

When Ontario closed schools in response to COVID-19, there was dithering that we are now seeing the consequences of. Rather than write off the school year and start immediately planning for the return of students in September, officials spent most of April and May debating over how the current year would be finished.

We’re getting to a similar stage with the rest of this. Instead of strategizing for the kinds of public-work projects our society needs — and how we are going to train and retrain unemployed people to do those jobs — we’re talking about a shortage of space heaters and whether a plastic flap makes a patio not a patio. The cold embrace of the season will soon put an end to safe gatherings in the park. I hope that, while they’re stuck inside, leaders in Ottawa will start planning for our real future. This is going to be one of the longest winters in Canada’s history. Let’s not waste it.

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