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November 30, 2006

The Bodyguard

Good article in the T-T-T-T-Times about the burden health care places on small businesses, and the role it plays in convincing eager entrepreneurs that the safety of their corporate jobs shouldn't be sacrificed for the uncertainty of a start-up.

Once upon a time, Ms. Smith and Mr. Lueders had generous benefits from their employers and gave little thought to how medical care would be paid. But today, as owners of a consulting firm in Liberty, Mo., and a transmission franchise in North Kansas City, it is a constant struggle.

“When we worked for someone else, life was good,” she said. “We had plenty of money and health care. Now we live with the constant fear of something. You never know, you just hold your breath. We will probably have one of us go back and get a full-time job at some point.”

You know, it's hard, but not impossible, to scrape by on a low income for a couple years. For most folks, such periods of (relative) poverty are transient and endurable. The prospect of a broken arm, a tumor, or a slipped disc changes that equation radically. And the fundamental insecurity of lacking defense against such mishaps is screamingly unsettling.

What's fun about the universal health care argument is how many facets it has. A good plan would be more efficient, more just, more economical, and more effective. It would also, in a positive liberty sense, enhance freedom and choice. Guaranteed health coverage would act as a bodyguard of sorts, allowing Americans to take economic risks, play weekend ball without fear, and live happily ever after with Natalie Portman. And, in the end, isn't that the sort of public good the government should be protecting?

November 30, 2006 | Permalink



If business people actually cared about innovation and supporting the entrepeneurial spirit, universal healthcare would be at the top of their list. Now, not only do you have to be smart to succeed as a small business owner, you also have to be lucky not to get sick or injured in any way.

Not to mention the people who stay at jobs they hate to keep health insurance, which is bad both for the employee and the employer.

Posted by: spike | Nov 30, 2006 11:52:52 AM

And the entrepreneurial spirit of the American people. Say you're a stuck in a cubicle with a spouse and two kids. You've got a brilliant idea for business you'd like to try, and maybe even a little capital to fund it for a little while. But you'd have to risk not only your own health but those of your children to try it out.

Posted by: djw | Nov 30, 2006 12:31:07 PM

Didn't see your comment, Spike. Great minds and all...

Posted by: djw | Nov 30, 2006 12:32:02 PM

How come were so much more entrepreneurial than other countries right now?

Posted by: Alex | Nov 30, 2006 12:32:38 PM


We're not. In France about 13% of people own their own business and make their living from it. In the US, its about 8.5%.

Posted by: mickslam | Nov 30, 2006 12:56:22 PM

What, is this sensible Thursday?

The corporations and the GOP don't actually care about entrepreneurship and encouraging business startups. Small business owners don't provide the money tsunami that the GOP needs to stay in contention.

BUT, unfortunately, small business owners do think they are just like corporate executives and should emulate their role models, so they vote GOP and whine incessantly about government red tape and taxes.

There is little real hope that this tendency will change direction. Sometimes self-perception just overwhelms self-interest. And the self-perception tells them that their is no such thing as a public good.

Posted by: JimPortlandOR | Nov 30, 2006 1:25:09 PM


That does not necessarily equal entrepreneurial. It could be related to protectionist practices designed to keep 'traditional' fixtures alive. I am not up on France, but I know that in Japan their are structural systems in place to keep the mom and pop corner stores operating (and no Wal-Marts) even though these are vastly less efficient and raise the price of goods to consumers dramatically. Europes ag subsidies are also famous for keeping the picturesque family farms intact, also at the cost of efficiency (and if family farms are part of this business calculation than that could explain a lot of it.)

Starting your own business is entreprenurial, owning your own business may or may not be.

Posted by: Dave Justus | Nov 30, 2006 1:28:41 PM

The numbers I saw for France was around 8% as of 2004, and closer to 6% when you take out the propped up agriculture folks. I might be measuring entrepreneurs differently than others too. A person leaving a comfortable corporate job to work for a start-up isn't technically self-employed, but it is entrepreneurial.

The surveys also reveal quite a bit. Folks in EU countries are way less likely to be interested in self-employment and ownership.

To Dave's point, the laws in Europe definitely affect the rates. They aren't shy about it either. They actually had (maybe have) a law in France that prohibits retailers from passing savings due to lower costs onto customers. It is explicitly designed to keep the "maman et papa" shops in business. The US has far fewer barriers to self-employment.

I know people who are job locked so I won't deny it is out there, but the idea that the lack of universal health care is somehow holding back the US economy can't really be demonstrated. Not if you're going to use the economies of other countries in comparison anyway.

Posted by: Alex | Nov 30, 2006 2:30:22 PM

Health reform would also allow a lot of the grey aconomy to go legit. I personally know small businessmen who only have a couple "employees" (for whom they provide benefits), but have a number of other workers who either work half time, or contractually with no coverage, or are simply paid cash under the table.

I'd love to know how much of this goes on, and the FTE of workers conributing nothing to either taxes or social security because their employers can't provide health coverage.


Posted by: John I | Nov 30, 2006 3:37:53 PM

I see all sorts of people who make job decisions based on health insurance considerations, and one of the most common is that they do not quit their corporate job to start a business because they fear (justifiably) that they will not be able to insure their family.

I am shortly going to leave my job doing good works, as they say, because the charity does not offer group health care, and the family plan I have just went up 20% and now is almost $1000 a month. (And covers very little...) So it's back to work in the corporate sector.

I know a young couple that would like to get married, but can't because the young lady has a chronic illness and hopes to stay on her mother's government insurance until she graduates.

Another-- get this-- needs to quit school for a semester in order to get a necessary operation, but -- catch-22!-- can't quit school because if she's not a full-time student, she will lose her insurance, and then can't get the operation. She really needs the operation and a couple months on bedrest afterwards, but she is postponing it till... well, she doesn't know when she'll be able to do it. She's not dying, but she's in severe pain and will be until she gets the surgery.

A couple has been separated for years, but can't divorce because one will then be without insurance.

Another couple ended up going bankrupt. The husband was laid off for a couple months from his job, and when he lost his insurance, a little while later he was diagnosed with cancer. His treatment decimated their life savings, and didn't save him. He died knowing that his wife would lose the house, and it broke his heart. She is now working retail and living in a trailer, and doesn't foresee ever being able to retire.

You know, in Europe, in Canada, people do not make decisions about their lives solely on the basis of their insurance. They can't even imagine it. And to tell you the truth, I bet most well-insured Americans don't realize it's like this out in the cold non-corporate world. And they won't realize it until they lose their job, or their employer quits offering insurance. Or the employer can't compete with companies in other countries, because the American company has to pay huge amounts for employee insurance, and the other country's company doesn't worry about that.

Posted by: lister | Nov 30, 2006 10:57:21 PM

Universal health care sounds like a good idea when you talk about struggling entrepreneurs and people who are scared to start businesses, but how many people in the U.S. actually fit this description? I don't know the actual stats on this, but I imagine that there are relatively few who do. If there were universal health care, the entrepreneurs would benefit but the workers who get free coverage at the present wouldn't. They'd just end up paying higher taxes. In my opinion, if a potential entrepreneur's welfare may be put in jeopardy because she can't afford high health care costs, then she shouldn't consider opening a business in the first place.

Posted by: michelle | Dec 1, 2006 6:19:08 AM

Whether we compare favorably on the small business metric to Europe is irrelevant, the question is whether we're doing the best possible job for our own citizens.

Posted by: Ezra | Dec 1, 2006 9:20:01 AM

Great points! it is indeed not only we have to be smart to succeed as a business owner, we also have to strive not to get sick or injured in any way. Well, I'm into business and I do consider health also at http://www.automatedbusiness.org

Posted by: Andrew | Jul 10, 2007 12:22:18 PM

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