By Fred Abler on November 16, 2012
Something remarkable is happening in the public square: The conversation on job creation has suddenly become rational. Talk has shifted from ex post facto rewards for “job creators” to a conversation about the pragmatic risks entrepreneurs must face. Entrepreneurs are at last having a moment in the sun. And our champion may surprise you.
Political satirist Jon Stewart recently proposed that the political environment include a serious entrepreneurial policy. It was only a matter of time really. The Daily Show has become increasingly gratuitous, and even its host no longer seems satisfied with his safe mode of snickering sarcasm. He wants to get serious, and actually fix something.
During a recent ‘interview-torial’ with Austan Goolsbee, the former Obama Administration advisor who has returned to teaching at the University of Chicago, Stewart offered the following view:
“What we need to do in this country is make it a softer cushion for failure. Because what they say is the job creators need more tax cuts and they need a bigger payoff on the risk that they take. … But what about the risk of, you’re afraid to leave your job and be an entrepreneur because that’s where your health insurance is? … Why aren’t we able to sell this idea that you don’t have to amplify the payoff of risk to gain success in this country, you need to soften the damage of risk?”
Stewart’s reframing of job creation as risk reduction strikes me as a rare example of supremely pragmatic business intelligence.
It also resonates deeply with my own personal experience when starting several small businesses on the Central Coast. Which brings us to the topic of this essay: The importance of health coverage in reducing risks for would-be entrepreneurs.
In 2002, as an entrepreneur in his 30s, I intentionally started the forerunner of FormFonts.com while still employed at Cal Poly San Luis Obispo so I would have health care. Then I purposefully hired 3D artists from abroad, as each came pre-benefited with their own national health care plans.
I still have genuine affection for Britan’s National Health Service, other second world health care programs and Cal Poly. Collectively they enabled me to take the leap and start a small business on the Central Coast. They also delayed the insurance issue for us a few more years, until FormFonts could better afford it.
Small-business formation is a distributed engine of our economy. The multiplier effect is staggering. Yet would-be entrepreneurs with families or pre-existing conditions are being blocked from self-employment. They must maintain group coverage that only large existing employers can afford.
Fixing broken nongroup insurance markets is the rationale for Obamacare. In the recent election it is instructive to note that not a single Republican in Massachusetts wants to repeal RomneyCare. Why not? Because it actually works well, and it’s not harming small business after all.
Had Governor Romney not assuaged Tea Party extremists by disavowing his legacy issue, there is little doubt in my mind that “Moderate Mitt” would have been the next President of the United States.
As celebrity-investor Mark Cuban conceded ironically in a pre-election op-ed published on Huffington Post, “I would vote for Romney if he were a Democrat.”
Whether ObamaCare will match Massachusetts’ 99-percent insured rate remains to be seen. The law exempts small businesses from mandatory coverage and puts that responsibility on individuals.
Only 11 million of America’s 33 million uninsured are currently employed. But there is hard evidence that shifting risk from public to private plans and state insurance exchanges does reduce premium costs.
From 2002 to 2009, the average cost of individual coverage grew by 14 percent across the country, but in Massachusetts, premiums fell by more than 21 percent. Obamacare will increase the number of Americans that are insured, keep people happier and healthier, and most importantly, control costs. This will be real relief for small businesses currently paying 20 percent to 50 percent premium increases year after year. True insurance portability will also help “elder-preneurs” get started.
It is time to put politics aside. Our economic recovery depends upon legions of entrepreneurs starting small businesses immediately. Even then, only a small fraction will succeed. Jon Stewart is spot on.
Real new job creation will come fastest by providing entrepreneurs with “a softer cushion for failure,” as Stewart calls it. Affordable health care will inevitably help, but much more needs to be done for our entrepreneurs.
• Fred Abler is an Atascadero-based entrepreneur. His businesses include FormFonts.com, WorthMonkey.com and PennyRevolution.com.