With the U.S. economy growing at a
historically stagnant pace, policymakers have been searching for ways
to jump start the American economy. This is also one of the reasons
why Senator Bernie Sanders has recently announced a new bill which
would shift the current U.S. health system to a "Medicare for all" system. This would expand Medicare to make sure nobody is left without coverage, while also boosting entrepreneurship.
Employer-based healthcare system
stifles entrepreneurship in U.S.
One of the most important aspects of
growing an economy is providing participants in the economy with
entrepreneurial opportunities. Entrepreneurs are many times described
as the engines of economic growth due to their risk-taking which
produces innovation while decreasing market inefficiencies.
Therefore, it is important to look at what is keeping potential
entrepreneurs from taking the risk of going into business for
themselves.
One of the most common reasons that
people stay in a job that they are not happy with is for the
employer-provided health insurance. Many potential entrepreneurs with
great ideas may shy away from making the leap because they are afraid
of what will happen to them and their families if they happen to be
seriously injured and are hit with exorbitant medical bills. However,
what if the risk of losing health coverage is eliminated? This can
have a profound effect on a potential entrepreneur's risk-reward
analysis when thinking about starting his or her own business.
Effect of 'job lock' on
entrepreneurship
The phenomenon of
an employee's desire to avoid the risk of losing health insurance
overriding the desire to follow a better-suited career path is known
as “job lock.” According to a report
from the American University Washington College of Law, this results
in lower “employment dynamics” which means that “the rate at
which workers and businesses exchange jobs” is low. Job lock makes
workers sixty percent less likely to leave their employment while
also reducing job mobility by 22.5 percent. This phenomenon also
decreases the self-employment rate by as much as four percent.
Not only is
Sander's newly announced “Medicare for all” bill important for
those facing a life or death situation, it is also important for
those hoping for a renewed American economy. This would more than
likely include both the healthy and the ill. “Medicare for all”
is not only about good health but it is also about good business and
economics.
