Growth in American Businesses Set to Decline

Today, entrepreneurship has become an extremely popular trend in the United States. It is recorded that about 15 to 20% of the workforce is running a startup. Of the startups, 69% are started at home, and 59% of startups are home-based. Another key fact that should be noted is the involvement of immigrants in entrepreneurship, as 16% of first generation individuals started or ran their own startups. That’s higher than the 13% of American households who participate in starting their own ventures! So what does all this mean? The growth rate and reliance on entrepreneurship as a source of income is at an all-time high.

With that being said, a major problem has erupted recently. Starting January 2016, the Affordable Care Act places a new requirement on small businesses with employees of 50 or more to provide health insurance for each employee. The consequences of not following this law will result in a $2,000 penalty for each employee that is not compensated by the business. As we all know, successful technological startups, such as Facebook, Uber, Soundcloud, and Snapchat, all started as minor businesses, but saw rapid growth in a short duration of time. This may be due to having enough funding, being in the right place at the right time, or filling a gap in the economy. However, technological breakthroughs as such may now be put to a halt. The new law serves as a barrier to foster growth, costing businesses a fortune, which will therefore limit growth in the future.

Some may ask, so what’s next? Will this law cause a decline in entrepreneurship? How will businesses react to the Affordable Care Act? It looks as if growth is set to severely decline in this rugged economy.

Sources:

Cowley, Stacy. "Health Care Law Forces Businesses to Consider Growth’s Costs." The New York Times. The New York Times, 18 Nov. 2015. Web. 02 Dec. 2015.

Forbes. Forbes Magazine, n.d. Web. 02 Dec. 2015.

#politics #entrepreneurship #business #declineinbusiness #usa #affordablecareact