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Are We Losing our Small Businesses and Alienating the Self-Employed?

Sep 23rd, 2009

self-employedTraditionally America has been driven by small businesses providing local employment.  Small businesses are the main stay in towns and villages across America.  They provide the basic necessities of life such as clothing, food, entertainment, fuel, home renovating, garden tools, and more.  Small businesses and the self-employed individuals who run them are vital to the continuation of the communities else the residents move out and then all is left is a ghost town.  Unfortunately small businesses and their self-employed operators are being totally neglected.  They are not including in the present health care tax reforms.

The American dream of one day owning your own business and being independent from uncaring or slave driving employers has always been a part of American culture. However, is it a realistic dream to have in America today?  According to a study conducted by the Center for Economic and Policy Research (CEPR), it appears not to be so.   The CEPR international comparison found that the American small business sector is one of the smallest in the world.

The United States has about 9 million or 8 percent of workers who run small business and are self-employed.  Only Ireland and Luxembourg, two really small countries have a rate for self-employed that is lower. The growth of self-employed produced businesses is particularly critical in the computer and high-tech fields and yet the United States ranks among the lowest in these sectors as well. Small businesses are unable to afford the average monthly cost for health insurance for themselves and their employees.

There is no doubt that the economy is affecting the growth of small business in America, and the economy is fueled by many factors.  The gross domestic product is one of them.  What is the potential buying power of individuals who are out of work or barely making a living?  These are the very people who buy products from small business owners. How can unemployed people or people in general purchase anything, if most of their money is being used up by health care costs.  The cost of medical treatment and health insurance coverage is outrageous and continuing to rise much faster than even the economy (GDP) is growing.

These problems not only affect the American citizen at large, they also affect the self-employed and their families.  Self-employed individuals and their families can barely afford decent health insurance. This factor also affects the growth of small business.  With the current crises, in areas where small businesses are competing with larger corporations, employees are ignoring small businesses and flocking to the larger corporations that can offer them insurance benefits.  Furthermore, the self-employed business owner, does not have tax breaks for offering service to their employees and when they do offer benefit plans, they are pretty much eating into their own profits.  There are very little tax exceptions offered to small businesses in regards to health insurance group coverage and many of these small businesses stagnate or close down, they have a harder time to survive and grow, then do medium sized and large corporations.

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