If you are self-employed, you have a job. Right? It’s obvious to those people who are in business for themselves, who work at night and on weekends and wear three or more hats that self-employment is a full-time job and then some. The self-made businessperson has known this for a while.
The federal government is finally catching up.
In early February, tucked inside the payroll-unemployment benefit extension bill was a program that will help the unemployed become their own boss and start their own small business. It’s a $35 million Self-Employment Assistance (SEA) program that can be used by states to offer or expand a SEA Program. Currently, Delaware, Maine, Maryland, New Jersey, New York, Oregon, and Washington have programs. This provision expands the opportunity for entrepreneurs nationwide.
Under the program, unemployed workers will be able to maintain their unemployment insurance benefits while they start their own small businesses – a full-time job in its own right – without having to look for other full-time work. It’s a win-win and could take even more people off unemployment as these small businesses grow and add jobs.
While the federal government understands self-employment is job creation, there’s a definite lag at the state level.
Here in California, we can’t afford not to take advantage of this opportunity.
Consider the case of Andrea M. (not her real name) from Sacramento who called our office earlier this year. Her telecommunications company was downsizing and laid her off. Fortunately, Andrea had a side web hosting business. Instead of waiting for a corporate job that may or may not exists, she is creating her own job and running her business full-time, but she can’t go all out or she’ll lose her benefits. When she is fully functioning, she hopes to expand her business and hire other people who can't find jobs. Andrea said that many of her colleagues are doing the same thing and we’ve had other phone calls from people in the same situation, who need their benefits to invest in their businesses.
California's unemployment rate is higher than the national average. Add to that our long-term unemployment problem – 44.5% of the unemployed haven't had a job for more than 26 weeks, that's more than double from December 2005. Existing companies are not creating enough jobs. Self-employment must be part of any economic recovery plan for California.
California has the opportunity to apply for $5.3 million from the U.S. Department of Labor to initiate, administer, and market a SEA program to help a potential 20,000 unemployed entrepreneurs who can start their own businesses.
The one positive thing legislators can do right now to create jobs through self-employment is to introduce and pass a bill to bring a Self-Employment Assistance Program (SEA) to California. CAMEO is working to make this a reality, but state systems change slowly. In order to encourage Governor Brown and the state legislators to bring this program to California, we initiated the Help Unemployed BYOB-Be Their Own Boss campaign. If the unemployed can’t find a job, they can create their own.
Claudia Viek is the CEO of CAMEO, California Association for Micro Enterprise Opportunity, the statewide network of microlenders and entrepreneurial training programs.