I'm as pro-freelance as they come, but Scott Shane makes an excellent point in his BusinessWeek piece "Beware the Freelance Economy":
What if the shift toward non-employer businesses reflects a belief that building a business with employees has become too much of a hassle? Entrepreneurs don't want to deal with issues of health insurance and managing people and all of the things that come with building an organization. So instead they are tending to start more non-employer businesses, with the result that the firms they establish are less substantial and contribute less to employment than the startups created in decades past.
I'm intrigued by his point about the hassle of health insurance. That's key. If that obstacle was reduced, would some of those non-employers consider hiring workers? And wouldn't that create opportunities for those small businesses to grow? And, extending that idea further, wouldn't a percentage of those small firms inevitably transform into large, important businesses? Luck alone would allow for that.
My parents own a small business and I've watched them engage in an annual struggle with overhead. Health insurance being the most notable expense. Bearing witness to that shaped my own entrepreneurial instincts. I have no interest in taking on what I perceive to be the "extraneous" expense of employees. But if the system was different, if it was easier to hire employees and provide them with appropriate benefits, I would absolutely reevaluate my perspective.
Sidenote: What Shane addresses in this column is the hint of an issue, and I appreciate that. There might be nothing to the rise of non-employer businesses. But there might be something to it, too. I like his approach here. It's not run-of-the-mill, hey-look-at-me punditry. He's workshopping an idea in a public forum.
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