Since Tocqueville, foreign observers have often helped the United States to see itself in a new light, and the British thinktank ResPublica seems to be continuing in that tradition as it prepares to set up an American branch. During a recent visit to FrumForum, ResPublica founder Phillip Blond shared a presentation which included a startling fact: despite American politicians’ pro-small business rhetoric, the U.S. lags far behind most other developed countries in the share of citizens employed by small businesses.
The chart above comes from a 2009 paper by John Schmitt and Nathan Lane of the Center for Economic and Policy Research. The paper also shows the U.S. falling behind on several other measures of entrepreneurship, including the share of self-employed individuals. The authors place most of the blame for this situation on the broken American health care system, writing that “the high cost to self-employed workers and small businesses of the private, employer-based health-care system in place in the United States may act as a significant deterrent to small start-up companies.”