New COVID-19 Cases Could Threaten Los Angeles Businesses

Big cities have been inundated by a new surge of COVID-19 cases in the past few weeks — and a far greater number are expected in the next few. Analysts have projected hundreds of thousands of American deaths by February. These problems are compounded by economic realities across the country. Thousands of small businesses have already closed, and thousands more might not survive this current round of cases without more help from Congress.

One Los Angeles, California business — Go Kart World — shut down business operations when coronavirus cases first arose in March. Or rather health department officials forced the business to shut down.

Co-owner Cynde Harris said, “I was freaking out. Our season runs February through September. We were losing like $1.4 million a month. There’s no way to recover from that.”

Go Kart World had to let 35 workers know that they would be — at least temporarily — out of a job. The businesses eventually reopened thanks to the economic stimulus provided by the CARES Act. Harris and her husband obtained two federal loans worth a combined $270,000. Another $30,000 was provided by Los Angeles County.

Unfortunately, the family-run business is still on thin ice because of debts already incurred due to shutting down. Harris said, “You can only take on so much. It’s bitter medicine to be told, ‘You can borrow the money,’ when a government closure just drove a truck through your business.”

The CARES Act was worth $2.2 trillion, but it wasn’t enough to hold them over. Another stimulus is much needed, but many believe it won’t easily pass through Congress — especially with Republicans in stark opposition to an incoming president’s agenda, and Democrats’ stark opposition to placing business interests over individual ones. Neither side seems willing or able to compromise for the good of all.

Businesses are likely to close again — even if not mandated by the government — because flu season is here, coronavirus cases are on the rise, and social distancing guidelines and regulations will almost certainly become far more strict in the coming months.

California director of the National Federation of Independent Business John Kabateck said, “The loans they got gave many businesses some moments of respite. But they were Band-Aids on a very big wound. Now they’re very, very terrified.”

None of these projections are speculation anymore. Small business revenue plummeted 29.3 percent in the last month alone. The holiday season might not be enough to turn things around. Only 28.8 percent of small business operations in California are still active. The rest have already closed down either temporarily or permanently.

UC Santa Cruz economist Robert Fairlie said, “Many of these closures may be permanent because of the inability of owners to pay ongoing expenses.”

California currently averages over 11,000 new cases every day — and that number is only going up. The same is true for hospitalizations, which have risen 78 percent.