Businesses Coming Back!

Thankfully businesses and companies are being allowed to re-open.  A week and a half ago, the safety protocols that had long been in play due to COVID-19, were “retired” by Cal/OSHA, following CDC and California Department of Health most recent guidelines.

In related news, some other companies are showing signs of returning to life by creating a presence int eh region.  Apple® will be opening up a new retail store in downtown LA at the historic Tower Theatre. The company also launched an international initiative providing hands-on experience and mentorship to youngsters  with the opening of their new store.  According to Senior VP of Retail + People at Apple, Deirdre O’Brien:

“At every corner, Los Angeles bursts with creativity across the arts, music, and entertainment, and we are thrilled to build on our relationship with this special city. Apple Tower Theatre honors the rich history and legacy of this entertainment capital.”

Let’s hope this is the beginning of LA springing back to life, especially in the entertainment industry which has been hardest hit by the coronavirus pandemic.

Facilitating Local Small Businesses

There are many ways to facilitate small businesses, especially in one’s locality.  Small businesses have often struggled to receive assistance but this has been heightened during the coronavirus crisis.

Earlier this month a discussion was held between various officials on what resources the small businesses can access from various federal, local and state programs.  A webinar – CD12 Business Resiliency – was hosted by John Lee, LA City Councilor and attended by: Kathryn Barger (L.A. County Supervisor), Fernando Nieto (Los Angeles County Office of Small Business program manager), Brad Sherman (U.S. Rep.) and Suzette Martinez Valladares (Assembly member) among others. One option that was explored was the benefits small business owners can get from the county’s Small Business Concierge program which was created with the goal of helping new entrepreneurs with the first crucial steps in their business development.  

In addition there is the  Procurement Technical Assistance Centers (PTAC) which offers personalized technical assistance, is a great resource of information, helps business owners with the bureaucracy of government contacts and can even give training to small businesses in the area.

Included in this plan is the recent signing by the Mayor of a $11.2 billion spending plan for the July 1 budget. Included in this budget is: $2.5- million for the LA Optimized Program (facilitating the digitization of local businesses);  to help businesses get digitized; $25 million for the Comeback program (offering up to $5,000 in grants to pay off debt, purchase new equipment and help with salaries); $5 million for the tourism and hospitality industries (following the huge damage that occurred in these sectors in the coronavirus pandemic) and $1.3 million for street vendors (facilitating their navigation of local bureaucracy as well as the provision of modernized carts so they can be legal and receive permits).

Local Infrastructure Projects

More than $39m was allocated to transportation and infrastructure projects being undertaken by LA County. The money – given by the California Transportation Commission – was split among a few organizations, the most ($27.8m) of which was earmarked for the Los Angeles County Metropolitan Transportation Authority. With this money, 78 light rail vehicles, will be purchased and thereafter the possibility of purchasing an additional 39.

Five zero-emission battery electric buses will be purchased by the Long Beach Transit/Electric Commuter Express. That organization will use the rest of its allocated $6.5m to reach its goal of zero-emission over-the-road coach commuter route between Long Beach and UCLA.

The $5m given to the Los Angeles Regional Transit System Integration and Modernization Program is to be put toward the completion of the Vermont Transit Corridor’s environmental documentation.  Included in this will be a transit service from Hollywood Boulevard to 120th Street.

This money comes after the $924 million which was given in May in an effort to improve transportation infrastructure throughout the state.  According to Caltrans (California Department of Transportation) Director Toks Omishakin:

“Caltrans is building a brighter future through a transportation network that serves all Californians. This significant investment will help us fortify and enhance our state’s vast network of highways, bridges, transit lines, bikeways and pedestrian routes.”

In related news, there is a chance that additional passenger rail service will be implemented for Las Vegas; a move that was endorsed by M.J. Maynard, CEO of Regional Transportation Commission of Southern Nevada.  He sees this as a further choice for those traveling to Las Vegas which will facilitate “congestion, improve our air quality and significantly enhance the overall visitor experience.”

Getting Angelenos Back to Work

COVID-19 resulted in thousands of Angelenos (along with the rest of the world) losing their jobs.  Now that there is an apparent lull in the pandemic, there is hope for getting locals back to work thanks to various endeavors undertaken by decision-makers and policy creators. 

One example of this was the Senate Bill 93 that Governor Newsom recently signed.  In it, he requested that hospitality employers re-hire the workers they had to lay off before they look to hiring new workers.  His signing of the bill was commended by the Service Employees International Union California which pointed out that this will likely benefit people of color and women who will be “first in line when their jobs come back as businesses reopen and that they can’t be retaliated against or passed up for younger employees.”

This policy is known as a Right of Recall Protection and has been adopted in various communities throughout the state of California.

In related news, the Senate now has a ‘Build Back Boldly’ budget, offering a rare chance to create an impressive transformation through California.  According to Senator Toni G. Atkins: 

“California has long led the nation on things like expanding health care for the middle class and undocumented immigrants, providing paid family leave and a higher minimum income, and establishing our own Earned Income Tax Credit.  With the Build Back Boldly budget, the Senate continues to prioritize smart investments that take care of Californians and take California into the future.”

The main goals of the proposal are: 0-3 childcare/education for all; the establishment of debt-free college for all; provide resources for non-profits and small businesses to recover completely post-COVID-19; transform homelessness by making home ownership and rental affordability a reality; healthcare affordable for all and an overall improvement in state systems.

Employment in LA, Pandemically Speaking

Los Angeles – like the rest of the country and indeed the world – has experienced huge loss in employment since the start of the coronavirus pandemic in March 2020.  One estimate puts the number for LA County at 1-in 8 workers with unemployment numbers, tripling from their regular count.

What is of note is where the jobs were lost.  Not surprisingly, is that the tourist and leisure industries have been most hard hit with a 33% loss compared to pre-pandemic numbers in entertainment, food, retail and tourism.  Overall, the pandemic peak of LA’s unemployment rate was 18.8% as compared with 10.9% pre-pandemic. It doesn’t seem so bad. Except when you look at the numbers for February 2020 (when employment figures were going up nicely), you see a mere 4.7% of unemployed and then when you compare that to the current numbers it is an increase in just one year of 232%.

So where is the good news in all this? Well, the successful vaccine rollout has resulted in LA County having moved to an orange tier and more re-openings are happening. This means that restaurants, bars, wineries, gyms, fitness parks, outdoor live events etc. can all begin re-opening which will of course hopefully result in a direct jump in re-employment numbers.

LA County Supervisor Hilda Solis seems to indicate there is room for optimism:

“After a year of fear, anxiety and tragic loss, we’re seeing glimmers of hope once more, but this didn’t happen just by accident — this was because of our collective hard work. So, while we push to get as many people as possible fully vaccinated and have the finish line of this pandemic in sight, let’s make sure that we finish strong. Let’s enjoy our hard-earned opportunities in the orange tier responsibly. Let’s continue to wear our masks, stay physically distant and avoid large indoor gatherings, if possible.”

California’s Economic Growth Forecast

As the pandemic starts to recede, predictions for California’s economic growth are starting to look good.  According to the  UCLA Anderson Forecast of 2021, “near record growth” is expected with the vaccinations.  While “in California, recovery may come later [it] should ultimately be faster than rest of U.S.” This in part has been explained by what California did during the pandemic, imposing more laws such as masks, closures, etc. than other states.  UCLA’s Jerry Nickelsburg explains: 

“Although the timing may be offset with California beginning a significant recovery later than some other states, we expect the California recovery to ultimately be, once again, faster than the U.S.  The more rapid growth we forecast for the U.S. economy — in light of how mass vaccinations have affected pandemic restrictions on economic activity, and taking into account the new stimulus package from Washington — will also lead to a more optimistic California forecast than in December.”

Of course – not unlike other US states – it will be the hospitality and leisure industries that will take the longest to bounce back. This is for two reasons: lack of tourism and the fact that they were hit hardest from the pandemic.  But with business, science and tech industries, the recovery will be faster and stronger.  This is also due to the fact that there has been a significant increase in the need and desire for new technologies to support the new way of working and indeed living. 

Vis-à-vis California’s unemployment numbers Q1 2021 is likely to be at 7.7 percent with a drop in 2022 to 5.1 percent and 2023 to 4.1 percent.

Another factor to be taken into consideration is the impact of California’s 2021-22 budget. More funding than is possible is needed for public health and education, which will mean low-income Californians will lag in recovering economically.  The key here is therefore an investment in economic growth drivers which include closing tax loopholes and bolstering revenues over the next few years. 

Housing the Homeless

Homelessness has been a problem in Los Angeles for many years. But what’s even worse as the predictions are looking at a further 86 percent increase in the problem, in part due to COVID-19. According to the Economic Roundtable’s Report Locked Out: Unemployment and Homelessness in the COVID Economy,’

“Over the next four years the current Pandemic Recession is projected to cause chronic homelessness to increase 49 percent in the United States, 68 percent in California and 86 percent in Los Angeles County. Homelessness among working-age adults caused by the current recession is projected to peak in 2023, adding 603,000 working-age adults to those already without a place of their own to sleep in the United States. California is projected to be home to 131,400 of those additional homeless adults, with 52,300 in Los Angeles.”

One possible solution is the creation of prefabricated homes in an area of North Hollywood that has all but been neglected.  It’s now been given a fun makeover and has resulted in the creation of 39 tiny units.  Known as Chandler Boulevard Bridge Home Village these tiny homes are much more economical, environmental and faster to build than regular homes.  These are being hailed as a possible solution to the problem nationwide, but especially in LA.   

While they are small (only 64 square feet and are adequate for at most, two adults), this is still way better than being on the street.  It took only 13 weeks for Lehrer Architects – in conjunction with LA’s Bureau of Engineering – from design to building completion to be ready.  Hope of the Valley Rescue Mission will be managing the project.

Underground Operations

As we know, many businesses have had to shutter due to the pandemic. In LA, the ‘Safer at Home’ order from Mayor Garcetti was thus violated. The ones most negatively impacted are the smaller stores.  In an effort to prevent them from being completely destroyed, some of these companies – in the ‘non-essential’ category – have thus started ‘operating underground’ as it were in an effort to survive. 

This has been dealt with by the law.  LA City attorney Mike Feuer has charged many businesses with violation of the law.  In response to why they broke the law, one company explained that their choice was either to risk “the fine or we can’t pay our mortgage.”

Of course these companies are trying to run their businesses with discretion.  One of them confessed to meeting clients in a back alley while having a sign on their door saying ‘closed due to coronavirus.’ Another store owner said they have appointments only and when meeting with clients the shades are down and the lights are off.

However, there is more than just facing a fine. There is also the prospect of having utilities shut off for those not complying with the Safer at Home decree.

While small businesses have received some help from the government (the PPP from the Treasury Department for example) a lot of businesses claim this is too little too late.  According to one local vendor:

“That amount of money came in and covered the costs of one month. With the PPP loan, you had eight weeks that you had to use those funds for payroll and utilities… It looked like I gave myself a big raise, but it just kept me afloat for those months that I was behind.”

A Yelp economic impact report has found 97,966 businesses have closed due to the pandemic.