Rather than helping place the unemployed into existing jobs, a new effort by the U.S. Department of Labor is looking to help citizens down on their luck become entrepreneurs.
Currently seven states have implemented a Self-Employment Assistance Program (SEAP), designed to teach unemployed workers how to start their own businesses through training courses while still receiving supplemental wages from the state.
The program has the potential to become a source of job creation, allowing workers to get off unemployment faster, start paying income taxes and possibly create more jobs in the future, said Jason Kuruvilla, a U.S. Department of Labor spokesman.
While officials at the Connecticut Department of Labor (DOL) have considered establishing a state program, Christine Paquette, director of labor operations for unemployment insurance, said it”™s unlikely Connecticut would be creating one anytime soon.
“It”™s a known fact that small businesses are what run this country,” Paquette said. “Ultimately it would be a good program, but I don”™t know realistically how we could put a statewide program in place without additional funding.”
With the passage of the Middle Class Tax Relief and Jobs Creation Act of 2012, roughly $35 million has been designated for states looking to create their own SEAP. The act is the first major overhaul of unemployment insurance in four decades.
Approximately $415,000 is available for Connecticut to establish and promote a program, but Paquette said the dollar amount isn”™t enough.
“This funding just would not support it,” she said. “Honestly, it would have to come from the administration or commissioners level to have it pursued further.”
When asked if Gov. Dannel P. Malloy would consider implementing the program, Andrew Doba, Malloy”™s director of communications, said only that the governor is currently reviewing agency budgets in preparation for his February budget proposal.
Paquette said the process of establishing a SEAP wouldn”™t be easy. First, the Connecticut DOL would need to choose what training programs would be offered and figure out how they would be taught, paid for and set up.
The U.S. Small Business Administration has training courses available, but for a fee. Then the department would need to establish criteria for what makes a good idea for a business, which is subjective and hard to determine on a broad basis.
Additionally, the U.S. Department of Labor requires stringent recording and project tracking through the program, while Paquette said it seems impractical to expect the level of cooperation needed from entrepreneurs after they”™re no longer considered unemployed.
Regardless of the possible challenges, the U.S. Department of Labor has recently been increasing its marketing efforts to encourage states to apply for the federal funding available. In December, it launched a website with model state legislation and tools for entrepreneurs. States have until June to create their programs and apply for funding.
“It”™s one of the common sense win-win initiatives,” Kuruvilla said. “There”™s no reason why states shouldn”™t apply. It”™s an extra tool for unemployed folks in each state.”
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