How does a Business contribute to the Economy?

How Small Businesses Contribute to U.S. Economic Expansion

A man welds wearing protective glasses (© Syracuse Newspapers/The Image Works)

An employee of MGI Products Inc. welding a portion of a quartz wafer carrier.

Small businesses contribute much more to the U.S. economy and society as a whole than can be calculated just from the spending and profit that they generate. These businesses tend to be more economically innovative than larger companies; more able to respond to changing consumer demand; and more receptive to creating opportunities for women and minorities; and activities in distressed areas. “Building; running; and growing small business is a part of a virtuous cycle of creativity and increasing prosperity that can be applied by dedicated and thoughtful people anywhere;” the author says. “There are no secrets; and frequently money is less important than a considered combination of imagination and effort.”

Derek Leebaert is an adjunct professor of government at Georgetown University. He is co-author of The MIT Press trilogy on the information technology revolution; and serves as an adviser to Management Assessment Partners (MAP); a global consulting firm.

A visitor to the United States will encounter many newspapers and magazines devoted to business: The Wall Street Journal; Fortune; Forbes; Business Week;Barron’s. On television and radio; he or she will hear about the Dow Jones Industrials and the S&P 1000—statistics that reflect the stock market’s highs and lows; as shown by the value of the largest U.S. companies. The very term Fortune 500; coined 50 years ago by Fortune magazine; ranks the leading companies in the nation: General Motors; General Electric; DuPont; and; more recently; Microsoft and Oracle. Moreover; brand names such as Ford; Coca Cola; and IBM likely have been commonplace in his or her own country for decades. Against this background; our visitor might get the impression that America’s economy; employment; innovation; and exports are propelled solely by such behemoths.

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Here’s What You Need to Know About Obamacare

Here’s What You Need to Know About Obamacare

May 31st 2013, 17:09

Worried about impending costs? We’ve gathered the latest updates all in one place.

Next month marks a year since the Supreme Court upheld the Affordable Care Act, better known as Obamacare.

But despite efforts by the president’s administration to sway the public’s opinion, about half of small business owners believe it will be bad news.

Many of the law’s provisions kick in January 2014, so we pulled together a roundup of what you need to know before then.

Health incentives. The Labor, Treasury and Health and Human Services departments has issued a rule that lets employers incentivize wellness, reports The New York Times. Penalties are now worth up to 50 percent of the premium and push workers to step up their exercise, drop some weight, and quit smoking, among other behaviors. Employees who participate in their company’s wellness program can be rewarded with a premium discount.

Self-insurance. Some health care providers like UnitedHealth and Humana let companies “self-insure.” Doing so means covering employees’ medical costs directly, reports The Wall Street Journal. While there are benefits to self-insurance such as bypassing costs for mental health care, a tragic turn of events can leave a business stuck with large bills.

Smaller bills (really). Businesses with older, sick employees might find themselves with smaller insurance bills, thanks to a provision of ACA. The clause bars insurers from setting coverage rates for small businesses based on the current health of employees, notes The Journal. With fewer than 50 to 100 workers depending on the state, a business can find rates on government-run health care marketplaces.

Now see how some businesses are addressing the Act directly:

  • Brian Gleason of Des-Case Corp. brought an insurance-consulting firm to break the news to employees. “Anything that impacts the employment relationship is something that we have to be concerned about from a recruiting and retention perspective,” he said to The Journal.
  • Richard Stark, president of Ziegler’s NYPD pizza chain, told The Journal that employees who opt for company health care may take home less pay as a result of rising costs to the company. And if ACA requirements drive down overall profits, managers might see a smaller bonus as well.
  • Steven Laine of Future State, deemed the $2,000 per employee penalty a better alternative than following the Act altogether.

For more on more on how four different small businesses are coping with Obamacare, check out this story.

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