Buried in the pages of various laws enacted as a result of the North American Free Trade Agreement (NAFTA) are the provisions for a program that, if used effectively, could prove be a boon to economic development and potential entrepreneurs.
The provisions provide States the opportunity to establish Self-Employment Assistance Programs (SEA or SEAP) as part of their unemployment compensation programs.
The program is voluntary and, to date, Delaware, Maine, Maryland, New Jersey, New York, Oregon, Pennsylvania and Washington (State) have Self-Employment Assistance Programs.
Information found on the US Dept. Of Labor’s (DOL) website notes:
"Self-Employment Assistance offers dislocated workers the opportunity for early re-employment. The program is designed to encourage and enable unemployed workers to create their own jobs by starting their own small businesses. Under these programs, States can pay a self-employed allowance, instead of regular unemployment insurance benefits, to help unemployed workers while they are establishing businesses and becoming self-employed. Participants receive weekly allowances while they are getting their businesses off the ground."
At first glance, the program would appear to be a win-win for both economic development efforts and aspiring (unemployed) entrepreneurs. Unfortunately, mandated limitations on the size of the program and the methods by which the program may be implemented by the States relegate the program to the status of a bit player.
For both budgetary and politically driven reasons, the NAFTA Implementation Act pegs SEA program participation at a maximum of 5% of all Unemployment Insurance (UI) recipients. The intent is to limit State born costs to operate the program and to allay employer concerns about the availability of former employees for recall and the subsidization of new, competitive enterprises.
Participation in the SEA program is limited, through profiling, to those who are determined to be likely to exhaust their UI benefits before finding a job. State requirements may further discourage participation. For example, Maryland requires all participants to attend classes available only in the Baltimore, MD area. A three to four hour drive for some state residents.
With unemployment growing nationwide and the limited opportunity for re-employment, expansion of the Self-Employment Assistance Program would seem to be a no-brainer. A substantial investment in SEA could prove to be an invaluable economic development tool and a benefit to America’s future entrepreneurs.
(Additional background information and resources available at: Allegany Co-op.com