US Small Business Sector Lagging Compared to Other Countries
|September 12, 2011||Posted by Kiwon Yoo under Blog||
Despite small businesses being heralded as the backbone of the US economy, an analysis of OECD data by the Center for Economic and Policy Research shows that only 11.1% of US enterprises had 1-9 employees in 2007, ranking last in a selection of rich and selected middle-income countries.
When looking at enterprises with 1-50 employees, the US still ranks last at 34.1%. Unsurprisingly, the US ranks first in share of employees in enterprises with 250+ employees (52.7%).
While there are many factors that contribute to the distribution of business sizes in the US, one may be the burdensome cost of health care that deters the start-up and growth of small businesses. It is interesting to note that many of the nations with a larger share of businesses with employees under 50 have universal health care/coverage.
Instead of threatening the livelihood of small businesses, ACA reforms, such as exchange implementation and increased purchasing power for small groups, may provide the US with a more entrepreneur-friendly business environment.