Tuesday, July 28, 2009

Americans not going it alone

During an economic downturn like our current one, it would seem logical if self-employment trended upward. The notion is that losing a job might provide the spark that someone needs to finally start that business they’ve only dreamed about, or outlined on a cocktail napkin, now sitting in their desk drawer.

In Canada, self employment numbers have been rising for several months. The June statistics show another increase in those seeking their own path to re-employment. The numbers show gains in self-employment of 37,000 in June, while the number of employees in the private sector decreased by 39,000. Since October, self-employment has grown by 1.5%, whereas the number of employees has declined by 3.3% in the private sector and 1.4% in the public sector.

On the other hand, Americans seem to be recoiling from entrepreneurship, and self-employment, at least according to an article written by Scott Shane, in the New York Times.

[Source: Created from data contained in the OECD Factbook 2009. U.S. self-employment rate, 1990-2007.]

We hear so much about Americans and their entreprenurial spriit. Why the sudden lack of courage when it comes to starting down a new path?

One reason Shane posits is the increase in healthcare costs. According to the article, a result of these spiraling expenses is the “inability of new companies to offer health insurance to their employees. The Kauffman Firm Survey, which tracks a sample of new businesses drawn from the 2004 cohort of U.S. start-ups, reports that only 29.5 percent of new employer firms and only 12 percent of all start-ups provide health insurance to their full-time employees.”

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