When smaller is better

March 23, 2012

Counties with thriving small businesses have healthier residents

Counties with a greater concentration of small, locally-owned businesses have healthier populations -- with lower rates of mortality, obesity and diabetes -- than do those that rely on large companies with "absentee" owners, according to a national study by sociologists at Baylor and Louisiana State University.

"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," said study co-author Dr. Charles M. Tolbert, BA '73, MA '75, chair of the sociology department in Baylor's College of Arts and Sciences. "The alternative is the attitude that 'Things are out of our control.'"

The study of 3,060 U.S. counties and parishes, published in the Cambridge Journal of Regions, Economy and Society, brings new evidence to a body of research literature and a debate among sociologists, who traditionally have advanced two competing hypotheses 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 Baylor and LSU researchers, who analyzed national population, health, business and housing data, found that the greater the proportion of small businesses, the healthier the population.

The findings are a departure from the traditional conclusion that "bigger is better."

"The old way of thinking was that you wanted to work for a big company because of pension plans, health insurance, dental insurance," said co-author Dr. Carson Mencken, professor of sociology at Baylor University. "But many of them have moved overseas to cheaper labor markets. So what we see are larger retailers that pay low wages and may not even offer full-time jobs with benefits."

While locally owned businesses are not adding greater compensation or benefits, the pay gap is shrinking.

"It's in their financial interest to take a stake in the community, to make it a place where people want to live and work," Mencken said.