Under these programs, states can pay a self-employed allowance, instead of regular unemployment insurance benefits, to help unemployed workers while they are establishing businesses and becoming self-employed. Participants receive weekly allowances while they are getting their businesses off the ground.The catch is that right now the program is strictly voluntary, and as such only 7 states offer it:
- New Jersey
- New York
The importance of these programs can't be overstressed in times of high unemployment and growing layoffs, such as we are seeing right no. As the OPEN article points out, in 2002-2003 during the last economic downturn, the U.S. Census Bureau found that the number of new non employer firms (those with no paid employees except the business owner) increased by about 5% per year.
I wished my state had opted into this program when I lost my job in 2002. Instead of spending 39 weeks chasing down job leads that all turned out to be dead ends, I could have started my home business earlier and in some cases, may have had some counseling and free help to do so, even while I was collecting unemployment. When my benefits ran out, I might have had a stream of income in place instead of having to start from scratch.
While the jobs that are likely to be created through the latest economic stimulus program will be a great relief for many in construction related trades, layoffs are occurring across the board. Programs like the Self-Employment Assistance Program should get greater attention and additional funding as they can help displaced workers start supporting themselves through a home business. In other words, give them a "hand up" instead of a "hand out".
Source Article on American Express OPEN
Self Employment Assistance - U.S. Department of Labor