State of the Plate in Erie
After crushing economic blows dished out by the COVID-19 pandemic, the restaurant sector in Erie is starting to cook up a healthy recovery
There's a lot to be excited about when it comes to the food scene in Erie right now. New restaurants have emerged to much excitement (for example, see: BAR RŌNIN in the West Erie Plaza). Old spaces are filled with new ideas (see: Local Eat & Pour in the former 1201 space). Area stables are expanding (see U Pick 6's new Bay House Oyster Bar and Restaurant). And the Flagship City Food Hall brought a mix of eight both new concepts and familiar favorites (like Lucky Louie's Beer and Wieners and Shawarma Station) into the core of the downtown.
The list goes on.
So do the continued challenges of the COVID-19 pandemic.
To require or not to require masks — what does the CDC or local government say today? Will something different be reported tomorrow? "Help wanted" — the signs still adorn the windows of businesses small and large. Supply chain issues — have the broken links been welded back together yet? With COVID's continued presence, these questions remain concerns.
"Not to sound alarmist, but I'm afraid that [the pandemic] is still somewhat high on my list of priorities," says Dr. Ken Louie, director of the Economic Research Institute of Erie (ERIE) at Penn State Behrend, regarding what he sees posing the greatest threat to the leisure and hospitality sector. "I think we need to make even more progress in stamping out the pandemic and the associated negative economic consequences."
That — the uncertainty brought on by the pandemic that continues to loom — is what Louie says continues to keep him up at night.
Some good news: help is on the way soon. The City of Erie designated $500,000 of the $76 million of American Rescue Plan Act funds it will receive for the Restaurant and Entertainment Venue Relief Grant.
The call for applications went out in early January. Less than a month later, on Feb. 7, the city announced it would be pausing the applications, citing an overwhelming volume of submissions.
"We want to ensure we are giving each application the attention it deserves," says Jennifer Hoffman, business development officer for the city's Department of Economic and Community Development, which is overseeing the administering of the ARPA funds.
The Restaurant and Entertainment Venue Relief Grant is for businesses with eligible NAICS (North American Industry Classification System) codes. That covers a wide range, from take-out to full-service restaurants, to breweries and distilleries, to bed and breakfasts and inns, to theater and dance companies. It also includes promoters of performing arts and sports as well as travel agencies.
The rationale for $500,000 in his bucket amongst the $76 million, according to Hoffman, is to make available $5,000 individual grants to 100 Erie businesses. Hoffman expects the city to begin accepting applications again by May.
Other good news: "Our leisure and hospitality sector is doing quite well. It's one of the better-performing sectors that have emerged from the pandemic," Louie says.
According to the most recent Erie Leading Index report, issued in January by ERIE, Erie's leisure and hospitality sector, which includes restaurants, suffered the greatest amount of employment loss from the pandemic — a "staggering 54 percent," or 7,500 jobs, between January and April in 2020. As of November 2021, the sector had rebounded somewhat but still lags just over 10 percent (or 1,400 jobs) behind pre-pandemic levels.
Yet, things are trending in the positive direction. According to Louie, more recent data from ERIE shows the job recovery rate of that sector to be closer to 80 percent overall, which is slightly ahead of that of Pennsylvania as a whole and about 20 percentage points higher than the Erie economy's overall recovery to date.
Another positive indicator: A near 9 percent positive increase in real average weekly wages for those in the sector. But that good news might need to be tempered.
"Given the supply demand forces, workers in Erie are beginning to experience a pickup in their earnings in that sector," Louie says. "The caveat here is that we're not sure whether the inflation is a temporary blip, or whether inflation is going to continue. And therefore, if nominal wages do not continue to rise, and inflation does, then in real terms, workers may still suffer a reduction in their real disposable incomes."
For context, Louie noted, inflation has been consistently hovering around 2 percent. With rates of 7-plus percent, we'd have to look back to 1982 to see a 12-month period of inflation that high.
"We don't know what inflation will do," Louie says. "There's still disagreement in the economics profession. Some say that it's temporary. Others say it may be longer term. I think it's too early to tell."
No matter the length of the tail of inflation, Louie says that it's important to note that its overall impact at both the local and national levels isn't equitable. "If its impact is severe, it's likely to disproportionately impact individuals in lower-income brackets to a greater degree."
If the pandemic continues to keep Louie up at night, what helps him get any sound sleep? He says the answer is easy and comes from his firsthand experience of working in and with the Erie community.
"I think we're so fortunate that we have so many dedicated, loyal people in Erie that are tenacious," he says. "They are devoted to their city. And they work so hard, and always try their best to improve the quality of life for everybody in the community."
"I would not sleep as well, if I didn't see as many dedicated people who are committed to improving our city."
Louie adds that the best antidote to continue to treat the impacts of the pandemic is the continued investment in human capital.
"Being more educated and investing in better health care, in the long run, will help alleviate some of the problems and some of the predicament we're in," he says. "If we don't invest enough in education, if we don't invest enough in human capital, then those would be severe impediments to further growth."
Local bars and restaurants do more than quench a community's thirst and satiate its appetite; they feed and nourish its soul and psyche. So raise a glass and fork to the food and beverage industry pivoters and the adapters, and to those with the audacity to try and launch new businesses amidst an unpredictable storm of public health and economic events. Because in 2022, after two years during a once-in-a-century pandemic, there's a lot to be excited about for the state of the plate in Erie.