California small business owners suffered during COVID, but many don’t blame Newsom

Andrew McDowell, owner of With Love Market & Cafe in Los Angeles, said the recall election is a waste of money. Photo by Pablo Unzueta for CalMatters

Andrew McDowell, who owns a cafe in downtown Los Angeles, says Gavin Newsom’s recall election is a waste of time and money.

It’s not that he’s a huge Newsom fan. It’s that Newsom is due for re-election next year, so why spend the time and money now?

McDowell says the $ 276 million to run the Sept. 14 election should instead be spent on grants for struggling small businesses. “If we run California as a business, we wouldn’t be wasting that kind of money on these things that really won’t impact the bottom line in the long run.”

Even though his business has suffered during COVID-19 shutdowns, McDowell is also giving Newsom some slack to deal with an unprecedented crisis.

“We did not call on a governor to take us through a pandemic, but to manage our normal daily life. Then they’re put in that furnace and we say, “Hey, you really didn’t do a good job,” McDowell said.

“I think our take on our governor’s performance should be: what did he try, what did he learn? Is he getting better? And don’t hold people 100% to mistakes – even stupid advertising mistakes. “

Remember that supporters and Republicans who want to be the next governor are not so forgiving.

Some criticize Newsom’s pandemic security measures as being too restrictive and devastating for small businesses. Others call him hypocrite, citing the infamous French laundry dinner he attended without a mask during a statewide indoor eating ban and repeating false claims that the vineyard qu ‘he founded remained open.

For some business owners, the pain during the pandemic is on top of long-standing frustrations with the cost of living in California, which could motivate them to vote to recall Newsom. The leading small business advocacy group, however, is not taking a position on the recall given the divergent views of its members.

For its part, Newsom who presents himself as an entrepreneur – has taken steps to help small business owners, including tax breaks for business owners who have received federal assistance loans. Using a huge state budget surplus and an influx of federal aid, the governor also pushed the biggest economic stimulus ever, which included $ 2 billion in grants at 180,939 small businesses and nonprofits, according to the California Office of the Small Business Lawyer. Three additional funding rounds were announced at the end of July, bringing the total to $ 4 billion.

The state has also tried to help small businesses sell online, while providing free masks and hand sanitizer.

But not everyone received grants – or it wasn’t enough to keep them going. In California, nearly 40,000 small businesses had closed by September 2020, according to Yelp data analyzed by the New York Times.

The businesses hardest hit by state and county stay-at-home orders lacked an online presence and had small cash reserves – typical of small businesses, according to the Los Angeles Economic Development Corp. The impact in Los Angeles County was particularly pronounced, where, according to 2019 census data, 88% of businesses had fewer than 20 employees – places such as restaurants, bars, and hair salons.

Blame Newsom, come up with ideas

For supporters of the recall election, closures and Newsom’s support for a law that required employers to provide benefits to concert workers was one of the reasons for revoking it.

Republican candidates are courting small business owners, mainly by denigrating the governor’s approach to dealing with the coronavirus, but also by coming up with their own proposals.

Former San Diego mayor Kevin Faulconer has said he will lift capacity limits on COVID-related businesses and has offered a small relief fund for restaurants.

Larry Elder, radio host and former small business owner, has highlighted the impact of crime on small businesses and openly voiced his opposition to a minimum wage.

John Cox, also a former small business owner, pledged tax cuts to make California more business-friendly, while Rocklin assembly member Kevin Kiley said he would use executive powers to cancel onerous regulations such as those concerning concert workers. Kiley and Caitlyn Jenner have spoken out against a state law that allows employees to sue and recover civil penalties for labor code violations.

Meanwhile, Democrat Kevin Paffrath, real estate agent and host of a YouTube finance show, has a streamlined authorization platform for businesses.

The political positions held by Elder and Kiley, in particular, appeal to some small business owners. Among them is Baret Lepejian, whose Burbank restaurant has been closed by the city for violating public health orders – an allegation he denies.

Lepejian bought Tinhorn Flats, a longtime Burbank establishment, in 2004, but he’s unlikely to reopen it, at least not in the city. Its shutdown fueled his motivation to vote against Newsom.

“The only thing I say over and over to anyone I meet in person is that none, and I mean none of this, is about public safety,” he said. “It’s about 100% power and control, that’s what’s happening. “

Staying afloat During COVID

Brianna Knight, a 31-year-old Fresno resident with clients statewide, was one of the lucky ones. Her holistic skin care business has performed well during the pandemic.

State grants helped, but so did his “over-planning” – six months in advance at times. Before the pandemic, Knight also launched a clinical skin care line, allowing it to pack in-home facial kits for its customers once COVID-19 struck.

Although she remained afloat, Knight said she was unsure how she would vote on the recall. She said she needed to do more research on the candidates and wanted to see how the next phase of the pandemic unfolded.

“I really think we need new leadership, but I don’t know if the time is right,” she said. “And I’m only saying this because right now California is in the purple (COVID level) and we’re planning a possible shutdown again. So the leadership transition right now – sometimes it gets worse.

Knight said she wants new leadership because of the way the pandemic has been handled, including shutting down businesses that heads of state deemed non-essential.

“I do corrective skin care, therefore acne, so even with a pandemic these clients still have a problem,” she said. “I think what they considered wasn’t as important – was important to a lot of people, and we weren’t recognized.”

Knight said the back-and-forth over closures – California began to turn back just weeks after the June 15 grand reopening – hasn’t helped.

“There has to be consistency in business to some extent,” she said. “Change is inevitable, but when it comes to things like this I felt it was not being handled as well as it could have been.”

Federal help was a big help last year, added McDowell, the owner of the LA cafe, but this year there has been less help available. This means that small business owners like him are still struggling.

“Everyone has the feeling that everything is fine again and is back to normal,” he said. “And it never was.”

Cecilia Vazquez, 54, had to close her jewelry store in the University Heights area of ​​San Diego County for four months. But like McDowell, she doesn’t blame Newsom directly.

“I don’t think anyone was ready. Nobody really knew what to do, ”said Vazquez, whose store Jenner recently visited. “We were all trying to do our best. “

Crisis in addition to the crisis

Thousands of small business owners across California are still trying to survive a pandemic that is in its fourth wave. Even with the reopening, some restaurants and other service establishments are struggling to hire workers – or have to pay more and offer perks.

Then there are companies that also have to deal with forest fires and drought.

Data from San Francisco-based software company Womply showed that the deadly 2018 camp fire resulted in the permanent shutdown of 13% of local businesses close to the blaze, while in 2019, 6.6% businesses closed after the Kincade fire in Sonoma County.

In 2020, California experienced its most destructive fire season in history, with 4.2 million acres burned. In 2021 so far, it’s not much better. The still-burning Dixie Fire is already the second largest in state history, having blackened more than 600,000 acres in Butte, Plumas, Lassen and Tehama counties.

Meanwhile, California is in the throes of its worst drought since 2015. This week, Newsom raised the prospect of mandatory statewide water conservation.

John Kabateck, California director of the National Federation of Independent Businesses, said opinions on the recall vary among its members, but many are too busy dealing with bigger concerns. Among them: finding qualified employees, dealing with the payroll and preparing for a “huge spike” in their unemployment insurance contributions.

“The only thing we have a duty to provide to small business owners during tough times – at all times – is predictability and certainty,” Kabateck said in an interview Wednesday. “The pandemic, wildfires, drought – all of those things, whether natural or man-made – are sure to create fear and uncertainty in your average small employer. We choose to focus our time and resources on helping these moms and dads get through these tough times. “

James Long, who lives in McKinleyville in Humboldt County and owns a security service company, said he didn’t think a governor – Democrat or Republican – would have been able to successfully weather the many crises that have plagued the state .

So he’s prepared to give Newsom the benefit of the doubt.

“He had just become governor, then this pandemic struck. Then all hell broke loose, ”Long said. “Then we have all these other problems, we have the wildfire. Let’s not let ourselves fall on the man.


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