New research out of Louisiana and Texas suggests good things for the health of Maine’s small businesses and the communities they’re in — and I mean actual, physical health, not just economic health.
According to a national study done by Louisiana State University and Baylor University researchers, counties and parishes with a greater concentration of small, locally owned businesses have healthier populations, with lower rates of mortality, obesity and diabetes.
That’s compared with those counties that rely on large companies with absentee owners, according to a release on the study.
“What stands out about this research is that we often think of the economic benefits and job growth that small business generates, but we don’t think of the social benefits to small communities,” said Troy C. Blanchard, lead author and associate professor of sociology at LSU. “This study highlights not only the economic benefits of small business, but its contributions to health and well-being.”
Maine, of course, is a state of small business owners and entrepreneurs. According to the latest data from the Small Business Administration, small businesses totaled 142,491 in Maine in 2009, representing 97.1 percent of all employers and employing 57.7 percent of the private-sector work force.
While the SBA considers anything under 500 employees “small,” it goes on to note that “most of Maine’s small businesses are very small, as 76.4 percent of all businesses did not have employees and most employers have fewer than 20 employees.” Those not employing anybody would be sole proprietorships – people working for themselves, with no work force.
Back to the Baylor/LSU study.
According to the release, the study of 3,060 counties and parishes in the contiguous United States, published online in the Cambridge Journal of Regions, Economy and Society advances an ongoing sociological debate about how small business impacts public health.
“Some sociologists argue that small businesses — unlike chain retail “big box” stores and large manufacturing plants — have a greater investment in the community and thus have more at stake when it comes to the well-being of employees, customers and other local citizens. The LSU and Baylor researchers, who analyzed national population, health, business and housing data, found that the greater the proportion of small businesses, the healthier the population.”
Wrote co-author Charles M. Tolbert, chair of the sociology department at Baylor:
Some communities appear to have thriving small business sectors that feature entrepreneurial cultures that promote public health. A place like this has a can-do climate, a practical problem-solving approach in which a community takes control of its own destiny. The alternative is the attitude that ‘Things are out of our control.’
Communities may become dependent on outside investment to solve problems, the researchers wrote.
The release notes that starting in the 1970s, communities sought to attract large employers, an economic development strategy that still is dominant today. The goal, the release said, was to provide high-paying jobs with benefits.
“In contrast, small local employers offered lower pay, few — if any — benefits, little chance for advancement, vulnerability to competition and sometimes, nepotism,” the release said.
Co-author Carson Mencken, professor of sociology in Baylor University’s College of Arts & Sciences:
The old way of thinking was that you wanted to work for a big company because of pension plans, health insurance, dental insurance. But many of them have moved overseas to cheaper labor markets. So what we see are larger retailers, usually next to interstates, that pay low wages and may not even offer full-time jobs with benefits, but instead hire people to work 30 hours a week. There’s a high turnover.
The release noted that larger companies showed a large drop in wages — 33 percent in real dollars — and access to health insurance between 1988 and 2003. And through restructuring and globalization, some large businesses are giving employees furloughs from full-time jobs, then rehiring them as short-time contract workers with no benefits, the release said.
And though locally owned businesses are not adding greater compensation or benefits, the pay gap is shrinking, researchers found.
When someone creates a ‘mom and pop’ business, it’s a huge step to bring that first employee on board. If it’s a relative or neighbor, they’ll bend over backward to hire and retain them. They’re going to bring on board somebody they trust, and they’ll pull every hair and every tooth in their head before they lay off someone who’s their neighbor.
In addition, small businesses are more likely to support bond issues for health infrastructures, recruit physicians, push for local anti-smoking legislation, promote community health programs and activities and support local farmers’ markets, researchers said.
Our findings suggest that the rewards of a vibrant small business sector are multi-dimensional. In addition to job creation, small businesses yield important non-economic rewards to communities that may improve the health of local residents.