Detroit Free Press: Matthew Roling on Restaurant Revitalization Fund
A federal fund spent more than $780 million to help Michigan restaurants recover from the COVID-19 pandemic and the list of recipients is a smorgasbord of venues. It includes a Greektown restaurant that got $8 million; an orchard, $5 million; a Dearborn bakery, $4.5 million; a McDonald's at Metro Airport, $3.4 million; and a stadium that promises the finest in axe throwing, $3.4 million. Then there’s the half a million dollars for a Starbucks in Detroit’s Renaissance Center and cash for wineries, caterers, food trucks, bars, saloons and chain restaurants. None of this taxpayer money — $28.6 billion nationwide — must be repaid as long as it is used properly. At the same time, thousands of restaurants across Michigan got nothing from the Restaurant Revitalization Fund. That includes some that were promised a grant, only to have it taken away. Supporters call the effort essential, but a critic described the fund as classic pork-barrel waste. The Small Business Administration released the list of recipients in mid-July, including nearly 3,300 from Michigan. Some advocates for the program say the billions already allocated don't go far enough. Matthew Roling, an adjunct professor of finance at the Mike Ilitch School of Business at Wayne State, said government programs like the Restaurant Revitalization Fund are written by people who are influenced by lobbyists and not the everyday people who need the money the most. He called it classic pork-barrel waste and said the fund is artificially subsidizing an industry that has experienced a fundamental shift, not just in consumer preferences and tastes, but also in the labor market. Due to a shortage of workers, many restaurants and other venues have been forced to raise wages. He said the market should be allowed to correct itself.