10/28/2021

California, and Particularly the Bay Area, Has Worst Regulatory Climate for Small Businesses, Study Says

A new study from the San Francisco-based Pacific Research Institute has ranked the regulatory climate for small businesses in California the worst out of all 50 states — and the Bay Area is a prime example of why.
The reasons? Costly regulations on short-term disability insurance and a minimum wage that’s 25 percent higher than the national average.
“California’s regulatory policy makes it more difficult and more costly for current and potential entrepreneurs,” said study author Wayne Winegarden, a senior fellow at PRI and a partner in the consulting firm Capitol Economic Advisors, in an interview Friday. “These higher costs reduce the amount of business growth and reduces the ability of small businesses to withstand economic shocks because their buffers are smaller. More broadly, the regulations are raising the cost of living for all Californians.”

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