Going underground: California business operates in secret amid pandemic restrictions

I got a haircut in an underground barbershop a couple of weeks ago.  It felt like I was going to a “speakeasy” of the 1920’s.  Saturday I had lunch at a pizza place that refused to close down, since May.  It was packed.  Free people eating lunch like free people should.  Our society is like the old Soviet Union—businesses operating per government control.  And other businesses operating in the free market.  The good news is that businesses now understand government is the enemy, not a friend.  If we ever get back to normal, folks will be less likely to obey the totalitarian wishes, the fascist instincts, of government.

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“After months with no income, John and Dee started home visits with trusted customers, under the table. Then, they quietly re-opened their office against local regulations, despite the potential legal or financial consequences.

“We either pay the fine or we can’t pay our mortgage,” Dee said. “That’s it.”

John and Dee are not the only small business owners to take a legitimate business underground during the pandemic. Many people say they’ve been unable to operate legally but unable to get by on government loans and stimulus checks. 

However, officials say operating against the health code is not only illegal, but the business may be unknowingly spreading the virus, perpetuating the very lockdown threatening small businesses.

Government wants to scare you.  But here is a fact:  Since March California has lost over one million jobs, schools and churches have been closed.  Yet, we are mandated to wear masks, curfews because the virus is more deadly in the middle of the night, social distancing and while 500 people can be in a WalMart, no more than ten in a church.  None of this worked—now that the elction is over, Newsom and the Democrats around the nation are beginning to re-open society.  In fact, it was a massive political stunt to affect the election, had little to do with health.  BTW, China today is TOTALLY open, no restrictions and almost no one is wearing a mask.  Sad to see the people of China, in many ways, are freer than the people of California.

Going underground: California business operates in secret amid pandemic restrictions

A protester holds a sign outside restaurant Tre Lune in Montecito.

by Kate Cimini, CalMatters,  1/22/21   

In summary

Many small business owners have taken legitimate operations underground during the pandemic. Owners say they’ve been unable to get by on government loans and stimulus checks.

When the COVID-19 pandemic shut down his Bay Area region massage business, John went 93 days without income.  

In March, John and his business partner, Dee, packed away their massage tables and locked up their office. (Both John and Dee are going by pseudonyms for fear of legal repercussions.) 

But 93 days was too long, they said.

After months with no income, John and Dee started home visits with trusted customers, under the table. Then, they quietly re-opened their office against local regulations, despite the potential legal or financial consequences.

“We either pay the fine or we can’t pay our mortgage,” Dee said. “That’s it.”

John and Dee are not the only small business owners to take a legitimate business underground during the pandemic. Many people say they’ve been unable to operate legally but unable to get by on government loans and stimulus checks. 

However, officials say operating against the health code is not only illegal, but the business may be unknowingly spreading the virus, perpetuating the very lockdown threatening small businesses.

‘It just kept me afloat’

Lockdowns across states and counties vary. 

Some county health officials told residents they should only leave their homes to shop for essential products. Others allowed for more freedom of movement and some regions had no restrictions at all. 

Small businesses, like John and Dee’s, were among the hardest-hit amid these shutdowns. 

Many businesses, struggling to stay afloat during the pandemic, applied for loans through the federal government’s Paycheck Protection Program, or PPP. 

Research out of the University of California Santa Cruz showed that from February to April, the number of working business owners closed plummeted 22% from 15 million to 11.7 million, counting both permanent and temporary closures. The largest loss ever recorded in the U.S., it surpasses business closures from the Great Recession more than four times over. African-American, Latinx and immigrant business owners were particularly hard-hit.

A U.S. Chamber-MetLife poll of small businesses conducted in October and November showed nearly half of the respondents (48%) said they experienced lower revenue than the previous year, while exactly half (50%) said they could only stand another year or less before going under.

Lenders participating in the Small Business Administration (SBA) relief program in 2020 shelled out more than $520 billion to roughly 5.2 million companies searching for a lifeline to stave off the economic impacts of COVID-19. 

About 87% of PPP loans issued in the spring came to less than $150,000, according to the SBA.

John was among those business owners in the Bay Area region (made up of Monterey, Santa Cruz, Santa Clara, San Mateo, Alameda, Contra Costa, Marin, Sonoma, Solano and Napa counties, per California’s Blueprint for a Safer Economy) awarded a PPP loan under $150,000.

The money helped, he said, but only to catch him up. He and Dee said they each typically see 30-40 clients per week, at $100 a session. 

“That amount of money came in and covered the costs of one month,” John said. “With the PPP loan, you had eight weeks that you had to use those funds for payroll and utilities… It looked like I gave myself a big raise, but it just kept me afloat for those months that I was behind.”

Only John benefitted from the loan, leaving Dee, normally the breadwinner in her household, to lean on her spouse to cover daily expenses.

The couple dipped into their savings to supplement what was still coming in. If it weren’t for her spouse’s income, Dee said, they would have had to move in with her in-laws, which was a tough idea to swallow. 

“When you’re used to living by yourself, to have to count on anybody else for that kind of support, it’s hard,” she said. “It feels almost demeaning. I can’t support myself now, I can’t support us.”

‘A hard thing to swallow’

Initially, John and Dee followed the state’s guidelines to the letter. They shut down their practice, went home, waited, and applied for local and federal aid.

In the summer, COVID-19 infections dipped low enough that they could re-open their doors.

They held temperature checks at the front door, used hand sanitizer, faced off with unmasked clients, and disinfected their space regularly.

They hoped those measures would keep their doors open. But soon, cases spiked in their region, and the business was shut down again. 

Dee was incensed that massage is considered nonessential. She and John count first responders and medical professionals among their clientele and saw firsthand the toll the work could take on them emotionally and physically.

“If you want essential people to keep going, their bodies break down,” she said. “It’s so important to give back to these people that are essential. In order for that to happen, you need people like us to come in and work the stress, the hours upon hours of standing in front of flames (and) carrying hoses out of their body. 

“When it comes down to it, I want to help the people,” Dee said. “I want to help those essential workers. Feeling like we’re at the bottom of the totem pole when we give back so much…that’s just a hard thing to swallow.”

Ahmos Netanel, CEO of California Massage Therapy Council (CAMTC), a Legislature-created private nonprofit public benefit corporation that created and runs the state’s voluntary massage certification program, said California massage professionals were rocked by the lockdown and the subsequent loss of income.

He said there is also the mental toll of losing what he referred to as “a calling.”

“It’s been a real challenge, personally and emotionally,” Netanel said. “It’s very important for (massage professionals) to help people…It was not only financially devastating but also professionally and emotionally.”

“Feeling like we’re at the bottom of the totem pole when we give back so much…that’s just a hard thing to swallow.”

Dee, massage therapist

Marybeth Berney is a massage therapist and president of the Washington State Massage Therapy Association. She said the pandemic thinned the ranks of massage therapists, many unable to make the numbers work. 

“Lots of people chose to find other jobs, going to work for grocery stores, for example,” she said. “A lot of massage therapists still haven’t gone back to work –– for them there may be another income in the household or they chose to get a different job.”

Once John and Dee’s county issued a second round of closures, the pair decided to offer home visits. Masked, John gave adjustments in garages, backyards or living rooms, the windows remain open to keep air circulating.

He found his clientele was anxious. Many worried their neighbors would him and asked John to park where his car couldn’t be seen. Home visits dropped off by late September, and so, too, did income. 

He then made the decision to go back to the office, which Dee had already done some weeks earlier. 

At the time, the state dashboard shows California was confirming about 3,000 new cases of COVID-19 a day, settling out of the pandemic’s first wave and slowly climbing into its second. 

In California, massage professionals certified by CAMTC “are required by law to comply with local and state regulations,” Netanel said, and are subject to disciplinary action if they are found in violation.

John and Dee are certified through CAMTC and risk having their certifications revoked entirely.

Prolonging the pandemic?

By October, indoor massage was allowed across 49 of California’s counties with a doctor’s note.

All other massages were required to take place outdoors, which Dee and John said didn’t appeal to clients because it was too chilly. They take the same precautions with customers — temperature checks, sanitizing surfaces, and require masks.

Health officials say that’s not enough. 

Ric Encarnación, Monterey County Environmental Health Bureau Acting Deputy Chief, said operating outside the health code wasn’t just unfair business practices but could also spread the virus, prolonging the pandemic and the very shutdown that is keeping businesses from operating legitimately. 

About Stephen Frank

Stephen Frank is the publisher and editor of California Political News and Views. He speaks all over California and appears as a guest on several radio shows each week. He has also served as a guest host on radio talk shows. He is a fulltime political consultant.

Comments

  1. Otis Needleman says

    Haven’t missed a haircut. Go to a neighbor, out-of-work hairdresser. Come in, sit in the dining room, she cuts hair, we talk, I pay. Quick and easy, price is good. Never going back to the old barber shop.

  2. Richard B. Cathcart says

    This is THE key to fighting against an oppressive and irresponsible CA government: join the Underground Economy that has existed for decades in CA, mostly done by labor-intensive businesses staffed mainly by “illegal Aliens” or whatever the current moniker is publicly acceptable. ALL small businesses in CA ought to stay officially closed, sending no self-collected-for-the-government taxes. If many 100,000rds of thousands of CA businesses declared their fiscal non-functionality at once, then just maybe our CA government(s) would revise their unscientific Diktats issued by our possessed professional politicians. Perhaps a nice name for such a social movement would be: RUST–Resistance Under Socialist Threat. RUST’s logo might be a redesign of CA’s Great Seal. Let’s replace the boats with homeless people living on aggregated surfboards on San Francisco Bay; let’s have Minerva hold her nose faced by the stench of the Salton Sea; let’s have at the drawing’s outermost edge a drawing of an encircling “Snow Piercer”-like Central Valley-SF Bay Area High-speed Railway endlessly and destination-less circuiting the State’s border—-we should dub it “Gov. Newsom’s Global Warming Luxury Train for the Elites”; let’s have the panning gold miner substituted by a groveling, on-his-knees CA “peasant” scrounging through Fresno’s National Landmark landfill.

  3. Proof this was all political? Newsom is going to open things up. Biden was ‘elected’, even though it was by fraud, everyone knows that. And he now has his pending recall to deal with. He hopes the good people of California will completely forget what an ass he’s been, shutting them down, forcing them into poverty, while he loads his bloated face with thousands of dollars worth of meals at private RESTAURANT dinners. Recall is the only solution. And, it looks like there is a groundswell of signatures on that petition. He will NEVER get his chance to run for president, thank God.

    Sign the petition, and then vote to recall.

  4. I don’t know when and where my next hair cut will be.

    BUT I DO KNOW IT WILL BE PAID IN CASH AND IF ASKED I’LL STATE I DID IT MYSELF.

    Let Slick and the Communists he represents suck on that no tax transaction.

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