Saturday, August 29, 2009

Entrepreneurs complain of prohibitive health care costs

A recent study on the small business sectors in different countries has knocked down the notion that the U.S. economic policy welcomes and fosters entrepreneurs. Rather, the Center for Economic and Policy Research, which conducted the study, found that the United States has one the smallest small business sectors—as a portion of total national employment—in the world.

The study looked at 22 wealthy industrialized nations and found that the United States had the second lowest share of self-employed workers, ahead of only Luxembourg. The United States also ranked close to the bottom in terms of the portion of the work force employed in small business manufacturing: the U.S. share of 11.1% compares with 14.4% in Sweden and 18.1% in the United Kingdom

In other words, despite a long tradition of celebrating self-starters and business owners who create jobs and collectively serve as a powerful economic engine, the United States has a comparatively weak and small business sector.

While the study’s authors theorize that high health costs are to blame for the lack of a more robust small business sector, what’s even more striking is how many would-be entrepreneurs agreed. A New York Times blog earlier this month about the study generated a flurry of responses, which were overwhelmingly in agreement that unfriendly health care policies were choking the small business sector.

Read it all at the Economic Policy Institute

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