Save the Date: Center’s Annual Gathering Is February 25, 2006
We are pleased to announce the Center for Rural Affairs Annual Gathering will be held in Kearney, Nebraska on Saturday, February 25, 2006, at the University of Nebraska-Kearney student center. We can promise a program that is educational, inspirational, and just plain worthwhile.
The meeting will offer our popular, informal morning teach-in sessions. Look for sessions on rural retailing, community development done the Center way, organic incentives, the 2007 farm bill, and much more.
A Small Business Fair will be offered again this year. From tasty jelly to tender meat, last year’s business fair offered an array of unique Nebraska products and services. Bring a shopping bag (or we’ll provide one) and help support rural enterprise.
Chuck Hassebrook, Center director, will keynote the luncheon. He is nationally recognized for his leadership on rural issues, particularly rural policy. In Nebraska, he serves on the University Board of Regents and the Rural Development Commission. He’ll have some exciting news to share about the work of the Center this year.
The afternoon will feature a Nebraska Gubernatorial Candidate Forum, to be taped for television and radio broadcast by NET, Nebraska Educational Television and Radio. An impartial moderator and panel will question the candidates on the most important rural issues facing the state.
The day will conclude with refreshments and a reception. Look for more details next month. Meanwhile, save the date, and see you in Kearney!
Senate Turns Down Farm Program Payment Limits
Across-the-board commodity program cuts and drastic cuts for conservation win out over limiting farm payments in procedural vote
On November 3, 2005, the Senate voted on a budget reconciliation package that calls for $4 billion in cuts to agriculture programs. This includes drastic cuts to conservation programs as well as across-the-board cuts in commodity programs. These cuts strike at the heart of rural America.
The Senate failed rural America. They failed to do the right thing when they voted down an amendment offered by Senator
Chuck Grassley (R-IA) that would have made these budget cuts through enacting effective payment limitations on the commodity program rather than cuts to conservation programs such as the Conservation Security Program and across-the-board cuts.
The Senate voted to maintain the status quo and continue sending mega checks to mega farmers at the expense of small and mid-size family farms, rural communities, and conservation.
The most insulting votes to oppose payment limitations came from two Midwestern senators,
Herb Kohl (D-WI) and Norm Coleman (R-MN). Senator Coleman should have a grounded and deep appreciation for the struggles small and mid-size family farmers face each day. Senator Kohl supported payment limitations in the past.
Both should recognize the importance of conservation to all their constituents. But voting to oppose payment limits was a clear vote against family farmers, against rural communities, and against conservation.
The single most effective thing Congress could do to revitalize family farms and rural communities is enact effective payment limitations. Effective payment limitations are not just good public policy. They are also the alternative to cuts in conservation, rural development, and other progressive programs. With payment limitations taken off the table, the only choice is how much to cut conservation versus rural development versus food stamps.
That choice is not acceptable. And at the end of the day the senators who voted to kill Sen. Grassley’s payment limitations amendment were nothing less than anti-family farm, anti-conservation, and anti-rural America.
We must hold these senators accountable until they are willing to fight just as hard for payment limits as those who fight against them. It is our responsibility – ours, yours, and all of rural America’s – to ensure this accountability of our elected officials.
We will have more opportunities to advance reform in the future. Midwesterners like Sen. Coleman and Sen. Kohl must get it right next time. The choice is clear: support mega payments to mega farms or reforms that will create a future for rural America – one that includes thriving family farms and vibrant rural communities.
See a list of Senate votes against payment
limits.
Contact: Traci Bruckner, 402.687.2103 x 1016 or
tracib@cfra.org for more information.
Nebraska Legislative Update Returning Soon; Subscribe Now!
The Center’s email Legislative Update will return soon, providing news and analysis on the happenings in the 2006 session of the Nebraska Legislature. The update is a free service to those who subscribe and is delivered weekly (or more often if needed) directly to your email box.
With statewide offices and half the Legislature up for election in 2006 (and with many legislative seats open to term limits), the 2006 session promises to be an important and exciting one.
To begin receiving the Legislative Update and news and analysis from the Center’s perspective, email
Jon Bailey ( jonb@cfra.org ) or Kim Preston
( kimp@cfra.org ) and ask to be placed on the Legislative Update list (be sure and provide the email address you want the Update sent to). If you have subscribed to the Legislative Update in the past, there is no need to contact us unless you want your email address changed.
CORPORATE FARMING NOTES
Nebraska regulators extend rules for livestock operations; Aurora Organic Dairy subject of legal complaint; large hog producers consolidating and adding new production
>> The Nebraska Department of Environment Quality has contacted approximately 700 large livestock operations to inform them they may apply for a variance for meeting a federal 2006 deadline to submit permit applications under the National Pollutant Elimination Discharge (NPDES) regulations under the Clean Water Act. The extension is available to large livestock facilities that were not defined as CAFOs prior to the 2003 federal NPDES rule change and therefore not required to apply for NPDES permits.
“First DEQ pushed to get legislation passed in 2004 to meet EPA’s deadline, and now they grant variances to that same law,” said
Laura Krebsbach, Regional Representative for the CAFO Campaign. “It makes me wonder why DEQ even bothers to go through the legislature for statutory authority when they flaunt the very intent of the authority granted to them.”
>> The Cornucopia Institute has filed a formal legal complaint with USDA requesting a full investigation into allegations of multiple violations of federal organic regulations at the nation’s largest organic dairy. Colorado’s Aurora Organic Dairy, with a herd approaching 6,000 cows, appears to have violated numerous organic regulations governing the rearing of animals entering its vast operation.
The owner of a ranch supplying replacement heifers to the dairy said that he has never filed an organic livestock management plan or been visited by an organic inspector. He has been following directives given to him by Aurora management for the handling of their replacement animals.
The ranch, operated by Steven T. Wells of Gill, Colorado, is also raising thousands of animals for conventional operations. “Of all the organic livestock facilities in the country, none would warrant, based on its size, scope, and complexity of operation, closer organic management scrutiny,” noted
Mark A. Kastel, Senior Farm Policy Analyst for the Wisconsin-based Institute.
>> According to Successful Farming Magazine, the largest 20 hog producers in the United States have added over 140,000 sows to their numbers in the last year. Fifty-seven percent of those were added through consolidation, larger production companies purchasing smaller operations. But approximately 61,000 of those sows are new – about half being added by converting existing nurseries to gilt development units. Iowa Select Farms is adding 20,000 sows through this type of conversion.
As a result, finishing barns are going up throughout the Midwest. The Farmers Cooperative Society in Sioux Center, Iowa is pushing to build 60,000 new hog-finishing spaces this year.
Contact: John Crabtree, 402.687.2103 x 1010 or johnc@cfra.org
for more information
Congress Agrees on Temporary Charitable Incentives for 2005
A move triggered by Hurricane Katrina has resulted in tax incentives for charitable donations to all non-profit organizations through the end of this year. The House and Senate approved legislation that removes a longstanding cap on deductions for charitable gifts.
Under the law prior to this legislation, an individual could deduct up to 50 percent of adjusted gross income in any given year. The new measure will allow taxpayers to deduct up to 100 percent of their adjusted gross income for gifts made before January 2006.
The hope is that this move will encourage giving by those who can afford a large donation and avoid a downturn in giving to charities that are not associated with storm relief. Please note that this is special legislation and is only in effect until the end of December 2005. If you have questions, please call
Barbara Chamness, 402.687.2103 x 1009.
Church Role in Mental Health for Rural Communities
Isolation, individualism make mental health a sensitive topic for rural populations; churches and religious groups form a trusted core
Last month I wrote about the mental health aspect of living in small rural communities and the lack of mental health care. This is nothing new to the people who live in rural America, nor is it new to the mental health professionals. Why is this such a difficult topic to bring to the table?
As I have often pointed out, living in small rural communities brings with it a set of rural cultural values. Most individuals living in rural America hold stereotyped views regarding mental illness, psychotropic medication, or mental health care in general.
It is unclear why this stigma is more pronounced in rural areas, but factors such as insufficient resources, isolation, and the value of autonomy may lead to some answers. In farming/ranching rural communities, an overriding sense of individualism demands we pull ourselves up by our bootstraps and solve our own problems.
The first aspect of addressing rural mental health is to make sure to address rural first and then mental health. Too often providers address mental health in rural areas as a subset of addressing mental health in general. This simply is not true.
On an urban or larger scale, the provider for mental health may well be the local, state, or federal government. This provides a barrier in rural areas, and distrust is prevalent. The outlet for relief can come from institutions that are already trusted.
Religious groups and churches form a fundamental core of unity and trust in small rural communities. Pastoral counseling is widely regarded as an alternative in mental health care and has been effective.
Churches can address rural mental health in a holistic manner and can reach several age groups in one setting. Where ethnic populations reside, trust becomes even more important, and the church can be the conduit in which rural mental health care can be provided.
Nearly 60 million rural Americans experience rates of mental illness. Many of these people rely on collaborative and cooperative efforts to help them cope. Next month we will look at how some community groups address rural mental health in their own communities.
Contact: Michael L. Holton, 402.687.2103 x
1015 or michaellh@cfra.org for more information
Ed. Note: Remember to share your thoughts at the “Community Revitalization Dialogue” on the Center’s
Blog for Rural America, http://www.cfra.blogspot.com
. You may need to search for Michael’s post; we have lots of interesting items there.
Scientific Societies New Home for Organic and Sustainable
Ag Discussions
Crop, soil, and agronomy society members including farmers, ranchers, and farm and ranch advocates met November 7, 2005, at the Tri Societies annual meeting held in Salt Lake City, Utah to discuss how the science community can more comprehensively address organic and sustainable agriculture research needs and funding.
The Committee on Organic and Sustainable Agriculture ( http://www.cosagroup.org
) hosted the event, which featured speakers and roundtable discussions on systems research, organic standards, research policy, and education and extension. Participants voiced their ideas and planned the upcoming year of activities.
Kim Leval, Center for Rural Affairs, is the Chair of COSA and a member of all three societies.
Speaker Deborah Stinner shared the work she and her late husband Ben Stinner began at Ohio State University on systems approaches in agricultural research. Their work included farmers in the design of the research project and in deciding which needs would be addressed.
Lynn Coody, an organic agriculture consultant from Eugene, Oregon, spoke about how decisions are made within the National Organic Standards Board on what materials or inputs will be allowed to be certified as organic. These and other presentations will be posted soon on the web at:
http://www.asa-cssa-sssa.org/index.html
.
$1,000 Cash Awards Made Wonderful Business Impacts
Nine Nebraska women entrepreneurs were awarded cash to infuse their businesses through a special national Boost program
Last year the Center’s Rural Enterprise Assistance Project (REAP) participated in the Women & Company Microenterprise Boost Program sponsored by the Association of Enterprise Opportunity (AEO). REAP is a small business support program for Nebraska’s rural micro businesses (those with five or fewer employees).
The Boost program allowed us to make nine $1,000 cash equity awards to women-owned REAP businesses. The nine women entrepreneurs had more than gratitude to show for the money. Each one told about the positive impacts this funding provided for their rural businesses.
It was just amazing to hear about the uses and outcomes that $1,000 made in these businesses. The money helped market the businesses, helped with the cost of continuing education, helped with new product and enterprise development, and in some cases made it possible to upgrade software and hardware technology.
One project participant reported that sales increased by as much as 75 percent on her business’s product, and new product development may lead another business to a large sales contract with a big retailer. Other comments included “made it possible to just keep going,” and “the best year so far.”
This project reinforced the notion that small amounts of capital can make a big impact for small businesses. If you can’t find grant money, not readily available to for-profit small businesses, you might consider borrowing $1,000 or $2,000 to boost your business.
Loans have to be paid back, unlike these cash awards. But if you can make the best of additional cash from a loan and do something to increase your customer base, the returns may be well worth it.
REAP is available to assist Nebraska’s rural entrepreneurs. Working with the program offers several advantages. REAP business specialists are located across the state and provide technical assistance and expertise in creating or updating a business plan. Borrowing from a REAP association or through the new REAP Rapid Loan program is another potential benefit.
Contact: Glennis McClure for more information about the awards or REAP at 402.645.3296 or
reapwbc@diodecom.net
REAP Receives National Excellence Award
The Center’s Rural Enterprise Assistance Project (REAP) received the first place Excellence in Microenterprise Work with Women Entrepreneurs award from the Association for Enterprise Opportunity (AEO) for its work in the Women & Company Microenterprise Boost Program. This was the top award made to local program partners across the nation.
The Women and Company Microenterprise Boost Program was designed to provide low and moderate-income women microentrepreneurs the opportunity to achieve greater business success by providing cash awards that have a measurable impact on the development of their business. See the article above to learn how the Nebraskans boosted their businesses.
A grant from the Citigroup Foundation provided the boost loan funds, and they were managed by the Association for Enterprise Opportunity, a national membership association representing hundreds of microenterprise development programs across the country. Women and
Company, a division of Citigroup that provides access to financial education and resources for women, worked with AEO to implement and promote the program.
Excellence awards to local partners were made based on project management, success stories, and measurable business impacts. Congratulations to REAP for its award and to REAP’s boost awardees; just a great bunch of gals to work with!
REAP has submitted an application to be a program partner in 2006. You can find a
list of the nine awardees on the REAP section of the Center’s website, with a description of each business and, in most cases, a photo,
http://www.cfra.org/reap . Contact Glennis McClure for more information, 402.645.3296.
Rural School Registry Connects Hurricane Victims with Help
The Rural School and Community Trust is trying to help rural teachers, students, and families hurt by the Gulf Coast hurricanes – nearly 200,000 students that attend 400-plus rural schools.
At http://www.ruraltorural.org you can identify rural schools, learn about their losses and needs, and then respond. Rural areas hit by hurricanes Katrina and Rita have been largely invisible through the national media.
More than two weeks after Rita hit rural Texas, 100,000 children were still unable to attend schools. In rural Mississippi and Louisiana, several schools are operating with tarpaulin roofs and no textbooks, teaching supplies, or computers.
The Trust site provides these services: if your school or district has supplies, surplus furniture, or other items you can donate, you can directly contact a school in this registry and make an in-kind donation; your school or community club, church, or civic organization can hold fund raisers, and direct your donation with a letter to a specific school; and you, personally, can make a credit card donation online and direct it to a specific school, or if you prefer, tell them to send it where it is needed most.
Schools in Louisiana, Mississippi, or Texas that want to be added to the registry should call 919.220.8004 or email
Page.McCullough@ruraledu.org .
Source: Rural Blog of the University of Kentucky
CC Ag, LLC Prepares to Launch Composting Operation
CC Ag, an LLC in Wisner, Nebraska recently received a USDA Value Added Producer Grant (VAPG) program award. The grant project is “Composting – Adding Value to Cattle and Grain” and involves composting manure for plant nutrients.
CC Ag is developing a market for compost to use as plant nutrients and a soil amendment. The goal is to provide plant nutrients for area farmers who would otherwise purchase commercial fertilizer or who have not had access to large amounts of manure/compost.
By using compost, farmers are able to build their soil in ways that cannot be accomplished with commercial fertilizer alone. “Regular manure/compost application can protect and improve soil quality because it enhances biological activity and soil structure,” says
Dave Deitloff, CC Ag manager.
Customers using the CC Ag product will realize added value to their cropland in a number of ways:
- Compost adds organic matter to the cropland on which it is applied, thereby enhancing soil quality for many years to come.
- Compost improves water retention on cropland on which it is applied, and this is critically important to crop farmers during periods of drought.
- During years of drought, statistics have shown improved yields on dryland acres with compost applied.
University of Nebraska-Lincoln research documents the value of raw and composted manure, but most of the projects have been conducted next to the feedlot/manure source. “We want to provide this renewable resource to farmers who have not had access to manure/compost before,” said
Deitloff.
CC Ag is extremely pleased to have received this grant and is working quickly to move ahead in building partnerships to improve stewardship in rural northeast Nebraska. For more information, contact Dave Deitloff at 402.529.3564.
Center staff Mike Heavrin assisted with the grant proposal. Contact him at
mikeh@cfra.org or 402.687.2103 x 1008 for information on the USDA Value Added Producer Grant program in Nebraska.
Youth Are the Key to Community Survival
Running a business, access to a quality environment, and a welcoming and diverse culture are factors young adults look for in rural communities where they want to live
We often assume that creating jobs is the key to community vitality – and that people will follow the jobs. But there is more to it.
Jobs and opportunity can also follow people. Communities that attract young people with energy to start new businesses will create their own economic opportunity.
At the recent Prairie Rural Action conference in Fargo, a panel of young people talked about the things that have drawn them, or would draw them back to rural communities.
They weren’t looking for a city in the country with shopping malls, corporate jobs, and trendy entertainment. Much of what they seek is within our capacity to provide.
They dream of running their own businesses. Young panel members said they would accept considerably less income to be self-employed rather than work for someone else.
They spoke of environment. They didn’t say they needed oceans and mountains; just access to a quality environment.
They want a welcoming atmosphere for newcomers – including diverse newcomers who look and think differently. They expressed the desire to live in a diverse atmosphere, where ethnic minorities are present and welcome. And they want other young people to interact with.
What’s this tell us for how to bring young people back to our communities? First – ask them what they think, and listen to what they say. If we want them, we have to be willing to give them the influence to help them create the kind of communities in which they want to live and raise families.
Most research indicates that quality leadership is the key to community success. Young people can be part of the solution to that challenge. Communities that provide leadership development opportunities and opportunities for young people to participate in decision-making will not only be more successful in attracting and keeping young people – they will have more effective leadership. Regional youth leadership development initiatives can help young people connect with a critical mass of people their age.
We need to create a support structure for new businesses in our communities – including opportunities to get loans, training, and technical assistance. Some initial success in an area can draw more success as young entrepreneurs cluster together.
This can include beginning farmers. For example, a community that works with a group of young farmers to capture the growing opportunities in high value markets might establish a cluster of young farmers that work together, support each other, and draw peers.
We need to pay attention to our environment and provide access to it. Communities that provide public access to land by working with landowners who enroll land in conservation programs like the Wetlands Reserve Program can make themselves more attractive to young families.
To learn more about programs for engaging rural youth, contact Michael L.
Holton, michaellh@cfra.org or 402.687.2103 x 1015.
Agree or disagree? Send your opinions or comments to Chuck Hassebrook, 402.687.2103 x 1018 or
chuckh@cfra.org .
Nebraska Court Decision Supports Small Schools
Last month we reported that supporters of rural elementary-only schools were seeking an injunction to halt LB 126, the school consolidation law passed by the Legislature. A petition drive placed the repeal on the general election ballot. Supporters argued that if the law went into affect, school districts would be dissolved before the vote next November.
Lancaster County District Judge Paul Merritt Jr. ruled in favor of supporters of Class I schools. He ruled that “a fair opportunity to vote in a meaningful manner will not be available” if the schools are dissolved in June 2006 as the law proscribes.
The state argued that because the petitioners fell short of the required number of signatures to automatically repeal the law, the injunction should not be granted. The attorney for the small schools, former state attorney general Don Stenberg, argued that a vote to repeal the law would be meaningless if the law was not suspended.
You can find more information about small schools, including a rural school consolidation toolkit with resources to help in the struggle against forced consolidation on the Center’s website,
Rural Schools.
Notables this Month
>> Practical Farmers of Iowa (PFI) is taking applications for its Executive Director. PFI has educated farmers about sustainable farming and marketing for over 20 years. The new leader will be based in Ames. Contact PFI for application materials by email,
searchcommittee@mail.practicalfarmers.org
, or call Nina Biensen at 641.485.6462 by December 15.
PFI is a farmer-driven organization with over 700 members across the region and a national reputation for pioneering programs in on-farm research, niche market development, and youth leadership. For more information, visit
http://www.practicalfarmers.org .
>> The Southern Sustainable Agricultue Working Group (SSAWG) is seeking an Executive Director. The successful candidate “will have a deep passion for our mission and the energy and experience to lead and manage a prominent and highly respected organization.” The director will start as a three-quarter time position, with the high priority goal of expanding the position to full-time as soon as funding allows.
The application deadline is December 31, 2005. Position start date is March 1, 2006 (or earlier). For the full position announcement and description of the position and its responsibilities, see:
http://www.ssawg.org/jobs-volunteers.html
FEATURE ARTICLE:
Health Care Challenges for Small and Micro Businesses
Several recent reports and studies highlight the continuing health care benefit challenges faced by small and micro businesses. An analysis of the data and findings suggests that health insurance is becoming more of an economic development issue and is harming the ability of small and micro businesses to compete and to attract employees.
Resolution of these issues is of paramount importance to rural people and rural communities – the rural economy is dominated by small businesses, and if the cost and availability of health care benefits render small businesses non-competitive and unable to expand and attract employees, the future of the rural economy is uncertain and the viability of rural communities unclear.
Good News? No, Just Less Bad
The most important immediate consideration in any discussion of health care benefits and small businesses is cost. The bottom-line finding in any study or survey is that small businesses are increasingly being priced out of the health care benefits game.
The Annual Employer Health Benefits survey released by the Kaiser Family Foundation and the Health Research and Education Trust in September makes that abundantly clear. Despite the fact that health care benefits in the past year, on average, did not continue the recent trend of double-digit increases, the 9 percent average premium increase last year was still three times greater than the growth in wages and two and a half times greater than the rate of inflation.
Health insurance premiums have risen by 73 percent in the past five years. According to the Kaiser report, the average annual premium for family health insurance coverage ($10,880) is now higher than the salary paid a full-time minimum wage worker.
With increasing costs of this magnitude, a choice will be forced upon small businesses: in a choice between wages and benefits, small businesses will make a selection that places more of the cost of health care benefits on either the employees or on society through government-provided health care or uninsured cost shifting.
To Offer or Not to Offer? The Basic Data
With health care benefit premiums soaring, it’s no wonder that fewer small businesses are offering health insurance to their employees. Since 1996, the total number of employers offering health care benefits to employees has decreased from 69 to 60 percent, with, according to the Kaiser report, small business employers accounting for nearly the entire decline.
As one might expect, the percentage of employers offering health benefits declines with business size (or, in other words, with the number of employees). Nearly all businesses with 200 or more employees offer some sort of health benefits to employees. The number of large firms offering health benefits has remained stable since 1996.
However, less than half of the smallest business (those with less than 10 employees) offer employee health benefits. And that number is decreasing significantly – from 53 percent in 1996 (and 58 percent in 2002) to 47 percent in 2005. In just three years, nearly one-in-five of America’s small businesses dropped health benefits for their employees.
What about the Smallest of the Small?
The Kaiser study only examines those businesses with at least three employees. Therefore, it begs the question – especially for those concerned with rural impacts of the health insurance debate: what of the very smallest businesses and the self-employed, businesses more likely to be located in rural communities?
Into the breach offered by that question jumps the National Association for the Self-Employed (NASE) in its recent report, Health Coverage and the Micro-business: A National Perspective (also released in September 2005). In a survey of businesses with 10 or fewer employees (their definition of “microenterprise”) culled from subscribers to a business magazine, the NASE report found much the same as the Kaiser report. Health insurance for small business is summarized by two characteristics: costly and less common.
The NASE study found that only 43 percent of small businesses presently offer health benefits to their employees or plan to offer such benefits in 2005. And, as with the Kaiser report, that number decreases as the number of employees decreases and as the business gets smaller.
Over three-quarters of self-employed do not provide health benefits through the business, and over 70 percent of businesses with two employees do not provide health insurance. Eighty-three percent of firms with gross sales under $50,000 do not offer health insurance.
A caveat is in order: this does not necessarily mean that employees or business owners are without health insurance. In fact, about 80 percent of business owners responding to the NASE survey are covered either by a policy through the business or a spouse’s policy.
What the NASE results do mean is that the traditional American practice of providing health care benefits through employment is on the decline (particularly among small businesses). This represents a shift of premium costs to the employee (at a time when premium costs are far outpacing wage increases, thus representing a real decrease in wage levels for some workers) or a shift to public programs such as Medicaid or children’s health insurance programs.
An increase in the number of uninsured, especially among working adults, is one outcome of this trend. The long-term meaning is that the traditional American system of providing health care benefits is eroding without a real alternative for affordable, comprehensive coverage in place.
Barriers to Offering Health Insurance
Really, among small business there is only one barrier to offering health insurance – cost. In the NASE report, nearly three-quarters of the businesses that did not offer health insurance identified cost as an important barrier, and 62 percent identified cost as the single most significant barrier.
Similar results were found in Nebraska. The Bureau of Business Research at the University of Nebraska-Lincoln found in its September 2005 Business in Nebraska report that “health care benefit costs” represent the primary cost reduction priority for businesses in the state.
This report implies that the priority is greater for mid-size and large businesses (at least in gross numbers; it is the highest priority for all sizes of businesses in the state) because larger businesses provide health care benefits more frequently.
Smaller businesses may have other priorities because they’ve rid themselves of the cost of health care benefits by “getting out from under the whole benefits thing” (quote from
Ron Wacks, President of the American Association of Microbusinesses, September 19, 2005, edition of
The MicroEnterprise Journal).
Good Business, Good Employees, and Moral Obligation
Small business owners believe there is some sort of discrimination in the health benefit marketplace against them. In the NASE report over 81 percent of businesses disagree that “small businesses have access to the same health insurance options as large businesses.” Further, nearly half of the respondents believed that the marketplace is not providing access to “health insurance options that fit my company’s needs.”
Despite these market failures, small business owners do feel that providing employee health care benefits is necessary. It appears roughly equal as to whether that comes from some sort of moral obligation or from a business requirement.
In the NASE report, 43 percent of respondents agreed that it is the responsibility of the employer to offer health insurance as an employee benefit (compared to 27 percent who disagreed). About 45 percent agreed that health care benefits are necessary to find and hire qualified people (compared to about 20 percent who disagreed).
This example of “doing well by doing good” is yet another market failure of the current system – employers want and need to provide health care benefits for their employees and for the future of their business, but the products and the cost in the marketplace (the supply side of the equation) are increasingly disconnected from demand.
What’s Next?
Issues surrounding health care benefits are crucial to the future of rural Americans. One can argue the health insurance issues a variety of ways – social justice, moral, religious, basic health outcomes. But all of those valid arguments can be combined with the most basic of arguments – economic.
Issues related to the cost and availability of health care benefits are crippling the competitiveness of American business, particularly small businesses. Health care benefits are necessary for small businesses to find and attract qualified employees (according to the NASE study).
In other words, health care benefits are necessary for small businesses to expand by allowing them to compete for qualified labor. And that is where the rural perspective becomes important – not only are rural people insured less and less comprehensively, but health care benefit issues are rendering those businesses that dominate the rural economy less viable and less competitive.
As we have written before, if we are to advocate for an entrepreneurially-based rural economy, we must also advocate for a health insurance system that serves entrepreneurs and small businesses (both owners and labor). To do otherwise dooms rural communities to labor challenges as workers seek employment with benefits at larger firms in larger communities, fewer entrepreneurs and businesses, and, ultimately, a less competitive economy.
Over the next year we will develop a plan on how to address these issues to benefit rural communities and rural businesses. We welcome your input.
Contact: Jon Bailey, jonb@cfra.org
or 402.687.2103 x 1013 for more information. Also send your comments his way.
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