Struggles of Small Businesses in Expensive California State

Last Updated on February 28, 2024 by Robert C. Hoopes

Small Businesses in California Struggle to Survive in High-Cost State

Small businesses in California are facing immense challenges as they try to navigate the high-cost environment, further exacerbated by the impact of the coronavirus pandemic. One such story is that of Karen Kropp, the owner of Book Rack bookstore in Arcadia, who recently made the difficult decision to close her shop after 40 years of operation due to financial struggles.

Kropp shared with the Los Angeles Times that she was forced to cash out her life insurance policy in order to keep the bookstore afloat, but unfortunately, sales never fully recovered, especially during the pandemic. Many aging small business owners, like Kropp, are grappling with complex questions about their legacy and finances, with a growing number of elderly Californians falling into poverty and homelessness.

The rising cost of living in California has made it challenging for businesses and residents alike to thrive, with even a $150,000 annual salary considered financially thin in many high-cost cities. Business owners in the state, including those in the restaurant and event venue industries, have voiced their frustrations about state regulations hindering their ability to do business effectively.

In addition to financial pressures, some Californians, like attorney Krystle Meyer, have been compelled to leave the state due to a combination of homelessness, frustration with COVID-19 restrictions, and the overall high cost of living.

The struggles of small businesses and residents in California have been ongoing and are only being exacerbated by the state’s high cost of living and policies. As more businesses grapple with financial challenges and residents face mounting pressures, finding sustainable solutions to support the state’s economic ecosystem remains a pressing issue for policymakers and stakeholders alike.