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US Small Business Sector Lagging Compared to Other Countries

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.

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