November 15, 2011

Washington—Today, U.S. Reps. Lloyd Doggett (D-TX) and Gary Peters (D-MI) introduced legislation to expand eligibility for self-employment assistance to the long-term unemployed to help America’s innovative entrepreneurs create new small businesses, strengthen our economy, and help get America back to work. 

“Self-employment assistance is an underutilized tool in our efforts to create jobs,” said Rep. Doggett, Ranking Member of the Human Resources Subcommittee. “In the states that have created these programs, these benefits allow aspiring entrepreneurs who would otherwise be eligible for unemployment benefits to receive an allowance in the same amount while starting their own business—getting back to work and creating jobs at the same time.  Texas is known for its innovative spirit.  These programs will give Americans who aspire to run their own business the support they need while getting started.”

“Small businesses create two thirds of all new jobs and we need to be working to help entrepreneurs create the 21st century jobs of the future,” said Rep. Gary Peters. “Fostering innovation in our communities today will help our economy grow out of these tough economic times. Winston Churchill once said that 'an optimist sees the opportunity in every difficulty' and it's in this spirit that the STARTUP Act was written to help the unemployed become the self-employed.”

The Startup Technical Assistance for Reemployment Training and Unemployment Prevention (STARTUP) Act would encourage states to offer self-employment assistance by: allowing the long-term unemployed, who remain eligible for unemployment benefits, to draw down those benefits in the form of self-employment assistance; providing technical assistance and model language from the U.S. Department of Labor for states that create new self-employment programs; and providing financial assistance to aid states in establishing, implementing, improving and/or administering self-employment programs.  Currently, only seven states—Delaware, Maine, Maryland, New Jersey, New York, Oregon, and Pennsylvania offer self-employment insurance. U.S. Senators Ron Wyden, Tom Carper, and Bob Casey have introduced companion legislation in the Senate.

A U.S. Department of Labor study found that self-employment assistance participants were 19 times more likely than eligible non-participants to become self-employed.  Moreover, they were four times more likely to find a job of any kind.   Despite widespread support for self-employment and entrepreneurial programs, only seven states offer self-employment assistance.  Though states can currently take advantage of self-employment assistance, administrative costs and costs related to entrepreneurial training are often prohibitive.  Furthermore, because federal law prevents self-employment benefits from being paid out while an individual is receiving benefits from either the Extended Unemployment Compensation (EUC08) or Extended Benefit (EB) programs, the long-term unemployed cannot take advantage of the program.