06 July 2010

Small businesses drive the U.S. economy.

According to U.S. government data, small businesses (under 500 employees):

• Constitute 99.7% of all employer firms
• Employ 52% of the overall private-sector workforce, and 80% in inner cities
• Provide 75% of all net new jobs
• Produce 13 times more patents per employee than large firms
• Accounted for 97.3% of all identified exporters and produced 28.9% of the known export value in fiscal 2006
• Hire 40% of high-tech workers

About 95% of these businesses have 100 or fewer employees. The smallest firms—those with fewer than 20 employees—created 80% of small-business jobs from 1999 to 2004.

Small businesses represent opportunity.

• Women owned nearly 28% of small businesses (6.5 million) in 2002 (the latest data available from the Small Business Administration).
• Minorities owned 17.6% of small businesses (4.1 million) in 2002.
• Small businesses embody individual initiative: in 2004, 18.3 million small businesses were sole proprietorships, and 1.2 million were partnerships.

Small businesses suffer most from our broken healthcare system.

• Firms with 1 to 9 workers (the vast majority of small businesses) paid adjusted premiums 18% higher than those paid by firms with 1,000 or more workers, according to a 2006 study by the Commonwealth Fund.
• Among firms with 3 to 9 workers, the portion that offer insurance dropped from 57% in 2000 to 49% in 2008, according to the Kaiser Family Foundation.
• Of the 45 million Americans without health insurance in 2007, more than 26 million were small-business owners, employees, and their dependents, according to Employee Benefit Research Institute estimates.
• Small businesses have trouble attracting talented employees—or don't get started in the first place—because people can't afford to leave jobs that provide health insurance, a phenomenon economists call "job lock."

For all these reasons, addressing the healthcare crisis is essential to recovering from the financial crisis.

CONTACT:
Terry Gardiner | National Legislative Director
(202) 609-7336 | cell: (206) 310-6707
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