For the past five weeks, Jeff Good has operated his three restaurants in Jackson, Mississippi under a boil water notice–that’s if he’s lucky enough to have water at all. On Monday, the faucets went dry and forced him to close for four days. On Friday morning, the water pressure returned and they were able to open in time for breakfast and lunch, but the headache is far from over.
The city of 150,000 people, a quarter of whom are below the poverty line, is still under a boil water advisory. That means his 210 employees cannot safely use the restaurants’ soda guns, commercial coffee makers, or ice machines. Workers have to rely on bottled water, canned soft drinks, a Mr. Coffee, and bags of ice, which are stacked to the ceiling in the walk-in freezers. Even baking bread requires bottled water. These measures cost each location an additional $200 to $500 a day. At the same time, sales are down 20 percent.
“We are under tremendous duress spending this amount of money every day,” says Good, the president of Mangia Bene Restaurant Management Group. “We’re hanging on by our fingertips on the edge of the ledge.”
This is not a new problem for him and his staff. Since February 2021, the state capital and Mississippi’s largest city has experienced five major water outages. Good, who is a Jackson native, has been a local business owner for 30 years. Now, he’s concerned that the ongoing crisis will accelerate the trend of people and businesses fleeing to the suburbs. Over the past year and a half, he’s lost customers and employees to surrounding areas, which are on different water systems.
“This is a real crisis,” says Good. “This pretty much has sent the signal that it is not viable to be in business in Jackson, Mississippi.”
Without a clean and reliable source of water, local businesses are struggling to remain solvent. For restaurants in particular, this marks yet another hurdle after two years of Covid closures, supply chain issues, labor shortages, and the highest inflation we’ve seen in 40 years. If local businesses are forced to close or move, the pain will be felt beyond their bottom line. That hit will ripple out throughout 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 impact from the water crisis. “There is a clear and observable relationship between home prices and water quality,” said the Central Mississippi Realtors, a group of 1,600 industry professionals, in a statement. “Homes in the City of Jackson are valued at $30,000 less than those in Hinds County and the state.”
David Keiser, an environmental economist and professor at the University of Massachusetts, Amherst, studied the economic impact of the water crisis in Flint, Michigan. If the result in Jackson is anything like what he observed in Flint, the community will be feeling the tail effects for a long time.
In Flint, Keiser found that home values plummeted by an average of 40 percent and still haven’t recovered despite over $400 million in government spending to alleviate the impact. But what was just as economically devastating to the city, according to Keiser, was the loss of public trust. Even when the water was deemed safe to drink again, residents kept buying more bottled water.
“There are real economic consequences,” he says. “People engage in behaviors that are costly, that oftentimes aren’t showing up on a city’s budget sheet.”
Good’s business is far from alone. Pat Fontaine, executive director of the Mississippi Hospitality & Restaurant Association, says all his Jackson members are struggling with increased costs of operation and a decrease in sales. “Consumers are fearful of dining in the city of Jackson,” he says. “That impacts their bottom lines significantly.”
His members are reporting spending between $500 and $700 a day on bottled water, ice, and canned drinks. Beyond that, inconsistent water pressure has left some locations unable to use their own bathrooms. Instead, businesses have been forced to rent portable toilets–costing as much as $5,000 a week. Even if sales rebound, Fontaine says these additional costs will be difficult to recoup, and he is worried that the local business community will not be able to hold on for too much longer.
“It is very difficult to operate profitably in that environment,” says Fontaine. “For a small independent restaurant, they do not have the financial resources to withstand these conditions.”
A few weeks ago, Fontaine polled his Jackson members and asked if any had been approached by property owners in surrounding areas about moving their business out of Jackson. Every single person in attendance raised their hands. Fontaine says many business owners are loyal to the city, but without water, it keeps getting costlier for them to stay–let alone for the city to attract new businesses.
There is no clear end in sight to this crisis, but for the first time in two years, Good has hope. State and federal officials have stepped in to help for the first time after Governor Tate Reeves and President Joe Biden both declared states of emergency this week. Good says his restaurants would not have been able to survive the pandemic without PPP loans from the federal government. He thinks a similar program could help local businesses impacted by the water crisis stay afloat.
“We can hold on a little bit longer if we can just get the plant operating, and then we can deal with some of the bigger issues in the long term,” he says. “As bad of a water system as this mayor inherited, I think that all of us in the business community should have pushed a lot harder to force the state and the city together, collaboratively, to address this before this became a national crisis.”