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Monday, Aug 15, 2022
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Another Rank Survey

Another one of those business-friendly rankings came out last week, and once again, Los Angeles and California fared poorly.

Well, “poorly” may be a charitable description.

In a national survey, small-business owners in Los Angeles gave their city an F grade in five of the 12 questions asked. Not surprisingly, Los Angeles got F’s for regulations, for environmental codes and for overall friendliness, among others.

There is some solace in that Los Angeles was not dead last in the country; it was third from last. San Diego and Sacramento had the lowest rankings nationwide.

California on the whole ranked at the bottom. Small businesses gave it six F’s.

The survey was done by Thumbtack.com, a San Francisco startup (with some L.A. investment), in concert with the Kauffman Foundation of Kansas City, Mo., which supports entrepreneurship.

“After a two-month survey of over 6,000 small business owners nationwide, it’s clear that Los Angeles is failing in the eyes of its small businesses,” said Sander Daniels, co-founder of Thumbtack in a press release. “For policymakers at every level looking for ways to jumpstart economic growth and job creation, Los Angeles can serve as a case study of what not to do.”

Usually, when these kinds of surveys come out, most of those policymakers in Los Angeles and California simply ignore them. This is just one survey, they typically grumble, done by a group that has some philosophical ax to grind. Besides, the methodology is suspect, they opine.

OK, maybe so. Maybe this survey wasn’t the most scientific ever done. But the important point is this: In many surveys, done by different groups with different philosophies and different methodologies over a span of time, Los Angeles and California typically come out poorly. Again, that may be a charitable description.

Just last month, for example, Chief Executive magazine published its annual ranking of the best states in which to have a business. California came in dead last. For the eighth straight year.

And here’s what that magazine said:

“Once the most attractive business environment, the Golden State appears to slip deeper into the ninth circle of business hell. The economy, which used to outperform the rest of the country, now substantially underperforms. And its status as the most ruinously contentious place to operate remains undisturbed in eight years.”

You’d think, or at least hope, that the weight of these kinds of surveys would start to sink in, that decision makers eventually would stop shooting all the messengers and start listening to their message, harsh as it may be.

The good news is that it would be remarkably easy to being to turn around the city and state. Some business-friendly tax and regulatory changes would go a long way.

Actually, it may not even need to be that extensive; the political types may be able to skip the tax changes. According to the Thumbtack survey, small businesses said licensing requirements were nearly twice as important – twice as important! – as tax rates in determining overall business friendliness.

Oh, sure, tax relief would be grand. But just relieving the regulatory burden would do most of the work of putting Los Angeles and California back on track to having a normal economy.

The rest of the work would be done by this region’s gifts: the fine weather, the Hollywood glitz and the fact that many entrepreneurs, deep down, still think of Los Angeles as the city of dreams.

Charles Crumpley is editor of the Business Journal. He can be reached at ccrumpley@labusinessjournal.com.

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