The Effect of College Students on Rekindling the Service Sector

When the coronavirus pandemic first hit the United States in March, the food and entertainment sectors of the economy were the most affected. Studies found that even during economic peaks, nearly 40% of local businesses operate at a breakeven point. Because the United States immediately underwent a lockdown, the local communities stopped going out to restaurants.  Big companies and incorporations had some leeway and were well equipped to face a few quarters of recession. Nevertheless, many small and independent restaurants didn’t have the same privileges. They rely on constant business and can probably only go a few weeks at maximum, paying the fixed costs and the employees’ wages. The economic stimulus checks issued by the government helped to a small extent, but it wasn’t enough. Many restaurants were forced to shut down for a quarter or two until the economy became more stable.

Restaurants in college towns and big cities started reopening in August hoping they would get some of their previous customers back. The daily habits of college students remain fairly constant despite external hardships. College students have generally relied on restaurants for meals. If they live in a dorm, they have no access to a kitchen. If they live in an apartment, they either are too busy or don’t know how to cook. With many universities adopting a virtual environment, students face a stressful time crunch now more than ever. Many students have still moved back to college and have reverted to relying on restaurants for meals. Either they order some quick takeout if they need to get back home and study, or they look for restaurants that offer socially distanced outdoor seating if they are trying to make plans with a few close friends. Of course, college students should be more careful about being in social settings during a time like this, but unfortunately, it is hard to influence their decisions. Nonetheless, it will take several years for most restaurants to return to their pre-pandemic profit levels despite the support they receive from college students. Surely any type of income is better than none; even if these local restaurants aren’t making profits, the money earned can be put towards the fixed costs, such as paying the rent of the building and the maintenance cost of the machinery needed to cook. The economy will not return to pre-pandemic levels until there is a vaccine that eliminates the risk of the coronavirus and allows college students all around the world to return to their college towns where they no longer have to weigh the risks of ordering food from restaurants with the perks of easy availability. 

Generally, college students tend to be very vocal about their beliefs. With the black lives matter movement being a prominent issue in our society recently, students are compiling and sharing lists of black-owned restaurants and other small businesses to support. Due to this movement and the publicity drawn by it, these small businesses are earning better profits than otherwise would’ve been predicted in a recession. The wage gap between races and social levels increases during a recession with the typical small business owner facing much more severe consequences than the upper-class white man. By late April, 41% of black-owned businesses had shut down compared to 17% of white-owned businesses. Not only are profit margins thin for local businesses, but also banks are hesitant in giving loans to people of color because they may be at a high default risk. Luckily, college students are taking initiative to do everything they can to support small businesses and prevent them from declaring bankruptcy.