Chart of the day: America’s surprisingly tiny small-business sector

at 03:04 PM ET, 09/12/2011

The one thing every American politician can agree on is that small businesses are a crucial driver of the U.S. economy. So it’s somewhat surprising to discover that, as John Schmitt of the Center on Economic and Policy Research points out, the United States actually has the smallest small-business sector among wealthy countries. Here’s a chart, using data from OECD’s Entrepreneurship at a Glance 2011 , showing that the United States has the lowest share of employees in enterprises with 50 or fewer employees:

And, conversely, the United States has the largest share of workers in big enterprises — defined as companies with 250 or more workers:

Presumably there a number of factors at work here. For instance, in France, when a company grows to 50 employees, it has to set up a Works Council that coordinates with employees on workplace conditions. And so “many small French companies limit themselves to… 49 employees.”

But in an earlier paper with Nathan Lane, Schmitt suggested that health care could also help explain the disparity: “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, an experience not shared by entrepreneurs in countries with universal access to health care.”

 
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