San Diego businesses face crisis as 39% consider relocation amid workforce challenges

In a recent meeting of the California State Assembly's Committee on Economic Development, Growth, and Household Impact, alarming trends regarding local businesses in San Diego were highlighted. Nearly 40% of local businesses are contemplating relocation, with Asian-owned businesses leading at 51% and Black-owned businesses at 44%. This growing trend is attributed to declining confidence in business viability, which has dropped to just 13% from a more optimistic position last year.

The meeting underscored that businesses with household incomes of $75,000 or less are particularly struggling, facing challenges exacerbated by wage mandates and trade uncertainties. Hiring remains a significant hurdle, with 58% of businesses unable to find qualified employees and 55% citing talent development as a major issue. High-growth sectors such as logistics, healthcare, and services are under intense pressure, further complicating the economic landscape.

Frustrations were voiced regarding permitting delays and inconsistent program delivery, with public training programs failing to scale adequately to meet the demands of the economy. Although businesses are aware of available support programs, many are not engaging due to complexity and unclear outcomes. Language and culturally competent services are also lacking, particularly for diverse communities in San Diego.

The discussion emphasized the need for retention strategies to prevent business loss, suggesting that keeping a trained workforce is essential for growth. Local educational institutions, like CSU San Marcos, have expressed a desire for students to remain in the area, but high living costs pose a significant barrier.

To address these challenges, several recommendations were proposed, including streamlining technical assistance for businesses, adjusting state eligibility thresholds for assistance to reflect local cost of living, and establishing small business affordability zones. These zones would provide targeted relief in high-cost neighborhoods, prioritizing support for legacy and culturally significant businesses.

The committee acknowledged the importance of local partnerships and the need for more tailored policies to support small businesses effectively. As the meeting concluded, there was a clear call for bold and creative solutions to ensure that San Diego's economy not only survives but thrives in the face of ongoing challenges.