Universal Health Care Would Boost Entrepreneurship

[FayeforCure]

Universal Health Care Would Boost Entrepreneurship

By Matthew Yglesias on May 28, 2009 at 2:26 pm




I’m the sort of person who’s prone to saying that we could have a more entrepreneurial economy in the United States if we had a universal health care system. The thinking is that our current system unduly punishes risk-taking. There are a lot of different aspects of this, but basically the American health care system both produces labor market rigidities (“job lock”) and makes jobs at small firms relatively unattractive. But do I have any actual evidence of this? Well, not really. I think theory alone can establish that the effect should be there, but how big is it? Fortunately, Jonathan Gruber has some new data:

http://www.washingtonmonthly.com/features/2009/0905.gruber.html


Over the past fifteen years, dozens of studies have documented the detrimental impact that job lock has on the economy. These studies typically compare the mobility of workers who are at firms with insurance but do not have an alternative source of coverage (such as spousal insurance or COBRA continuation coverage) to those who do have an alternative source of coverage should they leave the firm. The studies find that mobility is much higher when workers do not have to fear losing coverage; job-to-job mobility is estimated to increase by as much as 25 percent when alternative group coverage is available. [...]

There are fewer direct studies of the impact of job lock on entrepreneurship. But the most convincing research, by Alison Wellington, mirrors the findings of other job mobility studies: Americans who have an alternative source of health insurance, such as a spouse’s coverage, are much more likely to be self-employed than those who don’t. Wellington estimates that universal health care would therefore likely increase the share of workers who are self-employed (currently about 10 percent of the workforce) by another 2 percent or more. A system that provides universal access to health insurance coverage, then, is far more likely to promote entrepreneurship than one in which would-be innovators remain tied to corporate cubicles for fear of losing their family’s access to affordable health care. Indeed, even the Galtians among us should be celebrating the expanded potential for individual enterprise once the chains tying them to a job that provides insurance have been broken.

I would add that when you really get down to the issue of starting a successful new business, there should be interaction effects here. Job lock discourages people from taking new jobs. And it also discourages people from starting new businesses. But the fact that people are being discouraged from taking new jobs also makes it harder to start or expand new businesses.

And it’s worth saying that there are other benefits to flexibility besides these kind of narrowly business-oriented ones. The same things that make it harder for someone to start a new business also make it harder for someone to say they’re going to work a few years, pay off loans and save up some money, and then go travel somewhere or study something that’s of interest to them. Similarly, Canada’s health care system is a great blessing to someone who might want to try to subsist on a part-time job while dedicating the bulk of his energy to his band (to be sure, a form of entrepreneurship) and this perhaps accounts for Canada’s disproportionate production of indie rock.

http://thinkprogress.org/yglesias/2009/05/28/193117/universal-health-care-would-boost-entrepreneurship/

[mtraininjax]

I would add that when you really get down to the issue of starting a successful new business, there should be interaction effects here.

Ha Ha, this one takes the cake. Why don't we get Obama to talk with his Banking buddies to loosen up their loan reserves to put capital back into the markets to allow small businesses to borrow money and thus create new jobs?

What about education, first and foremost? People laid off of a blue collar job may not get that back, as technology makes blue collar jobs obsolete, where is the argument for more job re-training? Having healthcare is great, but of no use if you on unemployment benefits for 99 weeks because your craft or trade is obsolete. The top job offers for new grads this spring are in 1) Engineering, 2) Business, 3) Healthcare, and where does this leave our poor blue collar worker?

Being an entrepreneur means you are willing to accept the risk to start out on your own, with your own money and your own knowledge and education. If you don't have these, why would you leave the comfort of your dojo?

[bill]

Yeah I bet folks are going to rush out and start their own businesses. Then if they are successful they will be evil rich people and you will take their money, rights, time and give it to the non producers.

Maybe the Dem voters buy this drivel but I can assure you the tax payers do not.

[JeffreyS]

I would add that when you really get down to the issue of starting a successful new business, there should be interaction effects here.

Ha Ha, this one takes the cake. Why don't we get Obama to talk with his Banking buddies to loosen up their loan reserves to put capital back into the markets to allow small businesses to borrow money and thus create new jobs?

What about education, first and foremost? People laid off of a blue collar job may not get that back, as technology makes blue collar jobs obsolete, where is the argument for more job re-training? Having healthcare is great, but of no use if you on unemployment benefits for 99 weeks because your craft or trade is obsolete. The top job offers for new grads this spring are in 1) Engineering, 2) Business, 3) Healthcare, and where does this leave our poor blue collar worker?

Being an entrepreneur means you are willing to accept the risk to start out on your own, with your own money and your own knowledge and education. If you don't have these, why would you leave the comfort of your dojo?

The article isn't claiming that there are not other hurdles to starting your own business. 

The top job offers for new grads this spring are in 1) Engineering, 2) Business, 3) Healthcare, and where does this leave our poor blue collar worker?

Perhaps wanting to start his own business.  My guess is that they meant college grads not HS grads so yes that statement would be slanted less blue collar.

[tufsu1]

Yeah I bet folks are going to rush out and start their own businesses.

if one of their main reasons not to start a business is heathcare concerns, then yes!

[FayeforCure]

Yeah I bet folks are going to rush out and start their own businesses. Then if they are successful they will be evil rich people and you will take their money, rights, time and give it to the non producers.

Maybe the Dem voters buy this drivel but I can assure you the tax payers do not.

Two things:

1. Nobody wants to take your stuff away.......we are not in Kindergarten

2. Dem voters are tax payers too...........some of them are also very rich........but they feel it is their duty to contribute to the common good in a civilized society.

[Dog Walker]

There are more small businesses in Western Europe than here for just this reason.

[bill]

Yeah I bet folks are going to rush out and start their own businesses. Then if they are successful they will be evil rich people and you will take their money, rights, time and give it to the non producers.

Maybe the Dem voters buy this drivel but I can assure you the tax payers do not.

Two things:

1. Nobody wants to take your stuff away.......we are not in Kindergarten

2. Dem voters are tax payers too...........some of them are also very rich........but they feel it is their duty to contribute to the common good in a civilized society.

To my point you buy this crap.
1. They do want to take away my rights, money etc.

2. As do I and conservatives give substantially more than Dems. I already pay for their health coverage I just do not want the Government running it because it will be more costly and the quality will go down. 

[FayeforCure]

I just do not want the Government running it (healthcare) because it will be more costly and the quality will go down.

The VA system, Tricare is government run healthcare. It is:

1. cheaper
2. better quality than for-profit healthcare

This is true of all universal healthcare systems too.

[bill]

Yeah I bet folks are going to rush out and start their own businesses. Then if they are successful they will be evil rich people and you will take their money, rights, time and give it to the non producers.

Maybe the Dem voters buy this drivel but I can assure you the tax payers do not.

Two things:

1. Nobody wants to take your stuff away.......we are not in Kindergarten

2. Dem voters are tax payers too...........some of them are also very rich........but they feel it is their duty to contribute to the common good in a civilized society.

To my point you buy this crap.
1. They do want to take away my rights, money etc.

2. As do I and conservatives give substantially more than Dems. I already pay for their health coverage I just do not want the Government running it because it will be more costly and the quality will go down.

You mean like the Veterans Administration and Medicare?

Correct, add in food stamps and social security and then you have a pretty good list.

[fsquid]

Universal basic care funded with consumption taxes, with a free market private health care sector and private insurance, would be a net benefit to entrepreneurship. I've heard Richard Branson talk about feeling more free to take chances because of the safety net, and it makes sense.

Unfortunately, Obamacare fails to address the problem with employer-funded health care, and arguably makes it much worse from the perspective of the entrepreneur.

We have been in need of health care reform, but what we need is GOOD health care reform. That's not Obamacare.

[fsquid]

Isn't this thread about how universal health care would boost entreprenuers?

[fsquid]

I've always been in favor of getting rid of tying health insurance to employment.  Universal basic insurance funded by consumption taxes does that. Then individuals are free to purchase supplemental insurance if they want, and companies are free to provide it as a benefit.

Then no more "forcing" every employer to pay for the profits.