More Small Businesses Might Result in More Uninsured
More U.S. residents are working for small businesses that are less likely to offer medical coverage or other benefits such as retirement plans, according to Small Business Administration data, USA Today reports. Government data show that small businesses employed 50.9% of private-sector workers in 2004, compared with 50.7% in 2003.
According to a survey released last month by the Kaiser Family Foundation, 60% of businesses with three to 199 employees provided health benefits in 2006, compared with 98% of those with 200 or more employees.
Small businesses have been gaining the U.S. employment base for three consecutive years, following steady annual increases by larger employers since 1988, SBA data show.
Large firms -- defined by SBA as companies with 500 or more employees -- are losing their employment base because they are more likely to reduce staff during recessions and slow-growth economies, according to Mark Zandi, chief economist at Moody's Economy.com.
In addition, large companies are more likely to be manufacturers, which can replace workers with automation through technology, and to outsource work, which also results in downsizing. Meanwhile, smaller businesses are often in service industries such as consulting and health care fields that require workers rather than machinery, Brian Headd, SBA's head of research, said (Hopkins, USA Today, 10/9).