Monday, September 07, 2009

Unemployed get training to start their own businesses

From This seems like a great idea. Too bad it is not being used more widely.
A little-known program approved by Congress … gives the jobless [a] weekly cash benefit [like unemployment insurance] but also trains them to run their own business.
And the newly minted small-business owner gets to keep the profits, too.

The program is available in only eight states, mostly along the coasts. In Oregon, the recession brought one of the nation's highest unemployment rates — about 175,000 are getting jobless benefits. Interest in the program, one of the largest, has jumped by about 75 percent, bringing the yearly total of recipients to nearly 600.

'They can't buy a job, so they get to make one up,' says Pat Sanderlin, who runs the program. 'Right now, you've got people coming into this in survival mode.'

Maine and Washington, which added its program in 2008, report strong interest. …

Legislation ratifying the 1993 North American Free Trade Agreement allowed states to offer such aid, an idea widely used in Europe and Canada. In the U.S., the idea's historians say, the late-Sen. Edward Kennedy and Oregon's Ron Wyden, then a congressman and now a senator, championed the program. …

Seven of the states that offer self-employment assistance started their programs in the 1990s, and the programs remain small, rarely approaching the federal limit of 5 percent of those drawing unemployment benefits in a state.

California once offered the aid, but state officials report there was little interest and the program lapsed in 1998. Pennsylvania, Delaware and New Jersey say numbers are down. …

Maryland's program is expected to remain steady. Data from New York, the largest state with such a program, were unavailable despite multiple requests to the state Department of Labor.

States that offer the program say people start a great variety of businesses. Restaurants are common, as are landscaping services. Sanderlin says Oregon recipients are frequently high-tech workers who start Web design businesses. …

As part of the program, states screen interested applicants to select those likely to exhaust their benefits without regaining a job with wages. Typically, once workers are approved for the assistance, they must develop a business plan, and they get counseling and training.

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