Impact of Crime on Small Businesses’ Financial Performance

Impact of Crime on Small Businesses’ Financial Performance

Crime is having a significant impact on the financial performance of small businesses across the United States, according to a recent poll conducted by the Job Creators Network Foundation (JCNF). The survey, conducted from January 3 to January 29, found that 31 percent of brick-and-mortar small businesses nationwide are facing higher costs due to neighborhood crime. This increase in costs is particularly affecting minority-owned businesses, with 55 percent of those experiencing higher crime-related costs being owned by minorities.

The survey also revealed regional disparities in the impact of crime on small businesses. The problem appears to be most prevalent in the U.S. West, where 35 percent of brick-and-mortar small businesses are affected by higher costs due to crime. Midwestern businesses are the least affected at 27 percent, followed by those in the East at 29 percent, and the South at 33 percent.

The president of JCNF, Elaine Parker, emphasized the importance of addressing this issue, stating that “soft-on-crime policies have a significant spillover effect on the economy.” With historic inflation over the past three years and other challenges facing Main Street employers, such as crime, it is clear that policymakers need to prioritize finding solutions to these issues.

Another key finding of the JCNF poll was the dissatisfaction that small business employers feel toward President Joe Biden’s economic policies. When asked about “Bidenomics” and its impact on the economy and their businesses, 63 percent of small business employers said it was bad, compared to only 29 percent who said it was good. Despite the administration touting falling inflation rates as a sign of a strong economy, 78 percent of small business employers said their costs of doing business have not improved. Higher prices and inflation were listed as the top business concerns by 48 percent of respondents.

Furthermore, when it comes to President Biden’s job performance in helping small businesses, 77 percent of respondents had a negative opinion, giving him a grade of C or lower. Only 15 percent gave him a B, and a mere 7 percent gave him an A.

Although there was a small increase in the JCNF Small Business Intelligence Quotient (SBIQ) in January, with a score of 56.3, it is important to note that there has been no meaningful improvement in the last two years. The SBIQ is a seven-indicator index that tracks overall small business sentiment, where any score over 50 is considered positive.

The findings of this poll are not surprising to employers in Oakland, California, where more than 200 businesses participated in a citywide strike in late September due to rising crime. Business owners across the country share the sentiment that people don’t feel safe, and this is impacting their ability to operate and survive. In Washington, D.C., the increase in homicides, robberies, and car thefts has led to the closure of dozens of small businesses.

These trends are occurring as some cities have implemented changes to policing and criminal justice following the death of George Floyd in 2020. In Washington, these efforts have resulted in weakened penalties for some violent crimes. However, there have been efforts to address the crime surge, such as Mayor Muriel Bowser’s “Addressing Crime Trends Now Act,” which includes provisions to prohibit criminals from wearing masks for criminal acts, impose penalties for organized retail theft, and establish temporary drug-free zones.

It is clear that small businesses are feeling the impact of crime on their financial performance. Policymakers need to address this issue and prioritize the safety and security of small businesses and their communities. Only then can we ensure the continued success and growth of small businesses across the United States.