Under the proposed legislation, all fifty states will be able to set up self-employment assistance programs, and applicants will be able to utilize insurance money for up to 26 weeks in order to start their own business.
This is innovation and self-employment as a way back to work. This is an expansion of the labor market, not simply a restoration.
Access to between $10,000 and $13,000 worth of funding, the government hopes, will encourage the resurrection of the American spirit and the American dream, instilling new belief in the capacity of Americans as individuals. Or so the President compels us to believe.
Traditionally, only job seekers qualified for unemployment insurance benefits, and they were allowed only for personal use: setting up a business was strictly against the rules. Individuals who hoped to seek self-employment were thus discouraged, by the fear of losing their safety net, from taking the risk of entrepreneurship.
With the proposed reform, the new funds may act as a guaranteed source of start-up capital without the barriers of traditional credit and collateral requirements. Self-funding may also remove the need to immediately sell the incubating business idea to investors, which has been a sticking point for new entrepreneurs.
While opponents may claim that the US cannot afford to give away this money, a counter-argument will be that those eligible for unemployment benefits will file claims anyway, so why not provide a road to self-employment and self-sufficiency rather than simply a means to get by day-to-day. Teach a man to fish, as it were.
This plan, on average, should not create only one job, if successful, it should create new employers and new employment opportunities.
In the few states where SEA programs are already active, such as Arizona and Maryland, hundreds of businesses and new jobs have been created as a result. In Oregon, nearly half of the successful SEA entrepreneurs have each created an average of 2.63 new jobs.
While this plan will help the unemployed of all ages, there is reason to expect that it will be especially galvanizing among the growing numbers of unemployed college graduates.
This proposal, if passed, will reward the courage to take personal risk and the creativity to innovate. What could be a better way of ‘jolting’ the American economy?
- The American Jobs Act: Fueling Innovation and Entrepreneurship(whitehouse.gov)
- The Most Overlooked (And Important) Proposal in Obama’s Jobs Plan (moneyland.time.com)
- Self-Employment Assistance Program (esd.wa.gov)
- Obama proposes sweeping changes to unemployment benefits (money.cnn.com)
- President’s Tax Incentive Plan for Economic Recovery (legallyeasy.rocketlawyer.com)