For the past five weeks, Jeff Goode ran his three restaurants in Jackson, Mississippi, but only if he was lucky enough to have access to water. On Monday, the taps ran dry, forcing him to shut down for four days. By Friday morning, water pressure was back and doors were open for breakfast and lunch, but the headache was far from over.
City of 150,000 people, a quarter of which are below the poverty line and still under boiling water advisory. That means his 210 employees can’t safely use the restaurant’s soda guns, commercial coffee makers or ice makers. Workers had to rely on bottled water, canned soft drinks, Mr. Coffee and bags of ice cubes stacked on the ceiling of the walk-in freezer. Even toast requires bottled water. These measures cost each location an additional $200 to $500 per day. Meanwhile, sales fell 20%.
“We spend so much money every day,” said Goode, president of Mangia Bene Restaurant Management Group. “We hang with our fingertips on the edge of the windowsill.”
This is not a new problem for him and his staff. The state capital and largest city in Mississippi have experienced five major water outages since February 2021. Goode is a native of Jackson and has been in business for 30 years. Now, he fears the ongoing crisis will accelerate the flight of people and businesses to the suburbs. Over the past year and a half, his clients and employees have been lost to surrounding areas, which are on different water systems.
“This is a real crisis,” Goode said. “It pretty much sends a signal that doing business in Jackson, Mississippi, is not viable.”
Without a clean and reliable source of water, local businesses are struggling to stay solvent. For restaurants in particular, it marks another hurdle after two years of Covid shutdowns, supply chain issues, labor shortages and the highest inflation in 40 years. If local businesses are forced to close or relocate, the pain will extend beyond their bottom line. The blow will ripple through the entire local economy.
For most Americans, homeownership remains their primary source of wealth, and local real estate professionals are already concerned about the negative effects of the water crisis. “There is a clear and observable relationship between home prices and water quality,” Central Mississippi Realtors, a group of 1,600 industry professionals, said in a statement. “Homes in Jackson are larger than those in Hinds County and the state. Home values are $30,000 less.”
David Kaiser, an environmental economist and professor at the University of Massachusetts Amherst, studies the economic impact of the water crisis in Flint, Michigan. If Jackson’s results are anything like what he observed in Flint, the community will feel the tail effect for a long time.
In Flint, Keizer found that home values fell by an average of 40%, but have not recovered despite government spending of more than $400 million to mitigate the impact. But in Kaiser’s view, it’s also the loss of public trust that is causing economic damage to the city. Even though the water is deemed safe to drink again, residents continue to buy more bottled water.
“There will be real economic consequences,” he said. “People engage in costly behaviors that don’t usually appear on a city’s budget sheet.”
Good’s business is much more than that. All of Jackson’s members are struggling with increased operating costs and declining sales, said Pat Fontaine, executive director of the Mississippi Hotel and Restaurant Association. “Consumers are afraid to dine in Jackson,” he said. “It impacts their bottom line dramatically.”
His members report spending between $500 and $700 a day on bottled water, ice cubes and canned beverages. In addition to this, inconsistent water pressure has made it impossible for some places to use their own bathrooms. Instead, businesses are forced to rent portable toilets — costing as much as $5,000 a week. Even if sales pick up, Fontaine said the extra costs will be hard to recover, and he worries the local business community won’t be able to last long.
“It’s very difficult to be profitable in that environment,” Fontaine said. “For a small independent restaurant, they don’t have the financial resources to withstand these conditions.”
A few weeks ago, Fontaine polled members of Jackson, asking if any of the owners had approached the surrounding area. About moving their business out of Jackson. Everyone present raised their hands. Fontaine said many business owners are loyal to the city, but without water, it is increasingly costly for them to stay — not to mention the city attracting new businesses.
Seeing this crisis, but for the first time in two years, Goode sees hope. State and federal officials stepped in for the first time to help after Governor Tate Reeves and President Joe Biden both declared states of emergency this week. Goode said his restaurant would not have survived the pandemic without the federal government’s PPP loan. He believes a similar scheme could help local businesses affected by the water crisis stay afloat.
“If we can get the plant up and running, we can hold on for a while longer, and then we can deal with some of the bigger problems in the long run,” he said. “As bad as the water system this mayor has inherited, I think all of us in the business community should work harder to force the state and the city to work together to fix this before it becomes a national crisis.”
