Calif. Bill Could Help The Unemployed Build Their Own Small Businesses

92362495SACRAMENTO – Imagine someone over 55 years old, he/she was laid off and jobs like theirs have disappeared. So what to do? Start a small business. California Assemblywoman Mariko Yamada (D–Davis) introduced AB 152 today that was sponsored by CAMEO, the California Association for Micro Enterprise Opportunity. The bill creates a Self-Employment Assistance program that allows unemployed would be entrepreneurs to keep their unemployment benefits while they start their own small businesses, without having to look for other full-time work.

“In this time of chronic unemployment, we need to encourage job creation,” Assemblymember Mariko Yamada said. “We should unleash the entrepreneurial spirit of those unemployed who could become self-employed and contribute to our economy. This common-sense legislation can help create jobs without spending additional money.”

“An SEA program turns unemployed workers into employers,” says Claudia Viek, C.E.O. of the California Association for Micro Enterprise Opportunity. “Other states that have such a program really like what it does for their economy and new job creation.”

If California passes this bill it can access $5.3 million from the U.S. Department of Labor to run the SEA program.

Participants in an SEA program would engage in ‘self-employment assistance activities’ such as, write a business or marketing plan, develop a customer base, demonstrate sales, and receive entrepreneurial training, business counseling, and business technical assistance. These services can be provided by the networks of CAMEO member micro enterprise development programs and Small Business Development Centers.

The percent of long-term unemployed (jobless for 27 weeks or more) as a share of total unemployed in California rose from 19.9% in December 2005 to 44.5% in December 2010. Existing companies are not creating enough jobs. California must look at new job creation strategies, including self-employment, to help solve its persistent, long-term unemployment problem.

Self-employment is a labor market trend; self-employment was more than 25% of wage and salary employment in 2009. Pre-2000, self-employment grew at an average of 1.4% a year; post-2000, self-employment grew at an average of 3.5% a year (see graph) and is projected to grow at a rate of 7.2% in the next five years.