Framing the Issues

California is still in the midst of addressing the immediate needs of small businesses impacted by the COVID-19 pandemic.  Waiting to determine a renewed path forward can, however, not wait.  Major decisions are currently being negotiated at the federal level, the Governor’s proposed budget for 2021-22, offers an important opportunity that can be seized by the Members of the Assembly Jobs Committee.

The committee regularly engages with a wide range of small business, workforce development, and economic groups.  The committee regularly produces COVID-19 updates and maintains a website with useful resources.  Based on these discussions the following six issues continue to rise to the top:

1. Small businesses, especially women- and BIPOC-owned businesses, must be a priority in the state’s recovery efforts.   Data continues to suggest these businesses are having the greatest challenges in accessing technical and financial assistance.

2. Guidance on business operations continues to evolve making it difficult to identify, understand, and implement. Small businesses are concerned about COVID-19-associated legal liability.

3. State contracting opportunities remain limited and with traditional procurement outreach methods on hold, small businesses are finding it difficult to meet prime contractors who may be bidding on state contracts. It is not clear as to all the factors resulting in small businesses and DVBEs being excluded from this important source of revenue.

4. COVID-19 is creating many new business operation challenges, including accessing PPE, testing kits for employees, local broadband capacity, and additional costs of operation during the pandemic.

5. COVID-19 is amplifying old business operation challenges, including local broadband capacity, access to capital, and the cost of meeting regulations.

6. Small businesses need grants, even low-interest loans are not sufficient.  Eligible entrepreneurs face major hurdles in accessing Pandemic Unemployment Insurance, which has lagged behind traditional UI payments.

Beyond the unique challenges of brought by COVID-19, moving forward also means addressing systemic dysfunctions that have historically impeded the state’s global competitiveness, limited ongoing upskilling of workers, impeded the free flow of investment capital, and hindered business start-ups.

While not the only driver, state government has an important role in establishing the conditions that support a vibrant and inclusive economic economy where both workers and entrepreneurs are prosperous.