America’s small small-business sector

Everyone likes to talk about small business as the engine of the country’s economy.  Well, it may come as a surprise to find out (via WonkBlog at the Washington Post) that the U.S. has the smallest small-business sector of the 25 largest economies in the OECD.  Only 34.1% of American workers are employed by firms with 50 or less employees.  Most OECD countries have about half of all workers working in small businesses, while Greece leads the pack with about three-quarters of workers employed by small businesses.

Why would the United States lag other countries so noticeably?  There’s many potential explanations — the U.S. has one of the most mature modern corporate cultures in the world (note that other countries near the bottom include similar countries like the U.K., Germany, and France).  Some researchers have pointed the finger in another direction, though — towards the availability of universal health care.

By de-linking employment and health care, people in Western Europeans countries are more free to pursue building their own business because they don’t have the burdens of health care for themselves (and their employees) to consider.  One has to wonder how much the labor markets in our country have been distorted by our inability to break to link between health care and employment.

 

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