More Small Businesses Needed

A new report by Dr John Schmitt and Nathan Lane of the Center for Economic and Policy Research In Washington, DC (2009, “An International Comparison of Small Business Employment”) dispels some misconceptions about the scale of small business employment in the US. According to the report, the US has a much smaller small-business sector (as a share of total employment) than Canada and essentially all of Europe. The authors suggest that the relatively high direct cost of health care discourages small business formation in the US. In contrast, small businesses and start-ups in other countries tend to rely on government-funded health care systems. As of 2007, the US self-employment rate was well below that of other nations.


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