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Real Problems, Real Hits to Reputation

When you think of California’s biggest tourist and business destinations, Los Angeles and San Francisco, many images come to mind: the Hollywood hills, Silicon Valley, blue oceans, and trolleys descending steep streets. Nowadays, those iconic images are being replaced by new ones: cities of homeless people and rampant crime. This paradox is startling: the richest cities full of some of the world’s richest people are full of people struggling to survive. This changing reputation is sure to affect California’s business reputation in years to come, and there are already significant political ramifications because of these emerging crises. “People walking the streets, in many cases, feel themselves in danger, and that’s got to be dealt with”, said Willie Brown, the former mayor of San Francisco.

How it happened

In 2019, Chesa Boudin scored a huge win for the progressive left by winning the election to become the district attorney for San Francisco. During his campaign, he promised that “the tough-on-crime policies and rhetoric of the 1990s and early 2000s are on their way out”. Overall, he promised to eliminate cash bail, ease up on petty crimes, and reduce the number of inmates in jails and prisons. All the while, he drastically increased police accountability. These policies are all extremely popular among Democrats, but because of these relatively radical stances, Mr Boudin faced harsh criticism for San Francisco’s decline. Even though the data says that violent crime is down in the city, the residents of San Francisco feel less safe by a 2-to-1 margin. Part of that has to do with the DA’s leniency on “victimless” crimes like shoplifting and drug use. When people walk the streets of San Francisco and see people openly doing drugs and stealing from stores, the “order” part of “law and order” feels too distant. Just recently, 60 per cent of voters recalled Mr Boudin, ending his term a year and a half early. According to polling in May 2022, 53% of San Franciscans strongly disapproved of Boudin’s job performance. Meanwhile, in Los Angeles, the Los Angeles Times reports that homelessness has increased by 75% in recent years. Los Angeles is home to an estimated 66,000 unhoused people and accounts for 20% of all Americans living outside. All of these issues boil down to the same source: America’s social safety net is weak, which means police enforcement has to bear the brunt of inadequate social security.

Effect on business reputation

These may seem like purely political problems, but reputations are incredibly important in the business world. When people in Silicon Valley try to shape the future of the world, it is easy to accuse them of over-reaching; after all, their own city is suffering from rampant petty crime. “People are not in a good mood, and they have reason not to be in a good mood,” said Garry South, a Los Angeles-based Democratic strategist. “It’s not just the crime issue. It’s the homelessness. It’s the high price of gasoline”. If these cities cannot get these problems under control, it is going to be a long time before they regain the respect that they once had in the business world.