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May 25, 2009

Why You Don't Have Self-Employment Assistance

Marc Tracy

bizbox.slate.com

Summary

'Member last week, when we said that we hope that lots of federal stimulus money ends up flowing to the states? The idea being tha

'Member last week, when we said that we hope that lots of federal stimulus money ends up flowing to the states? The idea being that in the states' hands it is more likely eventually to make its way to the small businesses on the proverbial Main Street who are having some trouble getting their hands on necessary cash right now.


Well, via Open Forum (which is run by BizBox's sponsor, American Express OPEN), we learn about an intriguing, states-administered program called self-employment assistance. Basically, it is unemployment assistance for the unemployed who are trying to reemploy themselves by employing themselves--by starting their own businesses (whether literally or in the self-employed sense). This is important because, believe it or not, if you are unemployed but spending even marginal amounts of time working for or trying to set up something whereby you are self-employed, then you are not eligible for unemployment assistance. In fact, the self-employment assistance dollar amounts are the same as unemployment assistance.


The problem? Ah, yes. The problem.


The problem is that, though run out of the U.S. Department of Labor, it is a states program, and a voluntary states program, which only seven states actually participate in: Maine, Oregon, Maryland, New Jersey, New York, Pennsylvania, Delaware.


We couldn't put it better than the post itself: "So, if you live in one of the magical seven states that has the program, you can encourage family and friends and neighbors facing unemployment to consider starting their own businesses. And, if you live in one of the other forty-three states that don’t offer self-employment assistance, it may be time to contact your state department of labor to ask why."

Of course, part of the reason why is that it's voluntary in the first place. Imagine a stimulus package that combines more money for states that wish to take up this valuable program combined with additional enticement for participating? Or even, well, requiring state participation? It seems to us that the unemployed who are trying to re-enter the workforce and start contributing to the economy again ought to be encouraged, no matter if they are trying to get hired by a multinational or trying to start a business of one. If, as it's frequently said, recessions tend to give birth to exciting new start-ups and the like, then the government ought to be cultivating favorable terrain for smart men and women to seize their own reins. Expanding self-employment assistance looks like a good place to begin.