Program helps unemployed to become self-employed

By ED MERRIMAN Baker City Herald March 02, 2009 01:56 pm
Program pays unemployment benefits to would-be entrepreneurs

During economic downturns people in the middle to upper wage brackets, especially college-educated older workers in diminishing professions, often have the most trouble landing a job.

Unemployment statistics show workers in higher-paying skilled positions are more likely to exhaust their unemployment benefits, and ultimately wind up in lower paying occupations.

However, a little-used Self Employment Assistance program at the Oregon Employment Department offers workers who fit that profile the chance to receive unemployment benefits while they start a business of their own.

“It helps unemployed workers set up a business on a full-time basis, and still receive full unemployment benefits,” said Debbie Gargalis, manager of the department’s Worksource Oregon centers in Baker City, La Grande and Enterprise.

“It targets what we have called dislocated workers,” Gargalis said.

She said the Self Employment Assistance program is geared for workers who  are at risk of exhausting their unemployment benefits without finding a job with duties and pay comparable to their old job.

“There are a lot of businesses that got started during recessionary periods,” Gargalis said. “It triggers that American way, that entrepreneurial spirit.”

For highly skilled people who have had good jobs with managerial or supervisory responsibilities, Gargalis said the Self Employment Assistance program may open the path to a bright future running a business of their own.

“These are the times when people say ‘I’ve always had this dream of owning a business,’ ” Gargalis said. “Maybe now is the time to try it.”

She said staff at Worksource Oregon offices in Baker City (1575 Dewey Ave.) and around the state see lots of clients. Some get bogged down in looking at a job loss as a crisis, while others take the bull by the horns and use it as an opportunity to change course and do what they have to do to get a better job or start a business.

Linda Noble, business employment specialist at the Worksource office in Baker City, said workers who score 44 or higher on their worker profile are eligible to sign up for the Self Employment Assistance program.

Worker profile scores are based on nine variables that take into account the field of occupation, years of education, level of employment, salary and other factors.

Often people with higher levels of education and specialized degrees end up with higher worker profile scores because there are few job openings in their field in smaller communities like Baker City, Noble said.

People in the upper income brackets who have held management positions and have years of experience with a particular company or in a particular field that may not translate easily into another position also score high in the worker profiles that assess the likelihood of their finding a similar paying job before they exhaust unemployment benefits, Noble said.

Workers who have exhausted regular unemployment benefits in the past before finding a job also receive high worker profile scores, Noble said.

“We do have all the forms and connectivity people need to get started,” Noble said.

Enrolling in the Self Employment Assistance program opens the door to training and assistance in developing a business plan and other aspects of starting a business, available through Worksource Oregon, Blue Mountain Community College, the Small Business Administration, BEGIN and the Baker City/County economic development team, Noble said.

“They can get a lot of assistance through BEGIN,” Noble said. “It’s a wonderful program.”

Classes and tutorial programs are also available at the Worksource office to help people learn computer programs such as Quick Books, Microsoft Office, Powerpoint and others that are useful in developing a business plan and running a business, Noble said.

In the past, Noble said participation in the Self Employment Assistance program has been minimal in Baker County, partly because there aren’t as many management or professional specialty jobs here as in the Willamette Valley where the program has been more widely used.

However, with unemployment rates rising, she expects more people to take advantage of the program.

Noble said there are advantages and disadvantages to enrolling in the Self Employment Assistance program.

One of the advantages is the ability to collect an unemployment check each week for up to 26 weeks while working 40 hours or more a week trying to start a business. Noble said workers who are in the program do not have to deduct their self employment earnings from their weekly unemployment benefits.

Noble said one of the drawbacks is that when those initial unemployment benefits end, that’s it for people enrolled in the Self Employment Assistance program. They are not eligible for extended benefits, unless they stop their self employment activities and transfer back into the regular unemployment program, where they have to meet the regular job-seeking requirements, and have to report any income and risk losing unemployment eligibility if they continue self employment activities.

Searching for a job is considered a full-time endeavor, as is working to start your own business, so the employment department rules preclude doing both at the same time. Noble said people who qualify for the Self Employment Assistance program have to choose one or the other.

Rules governing the Self Employment Assistance program limit participation to 5 percent of claimants, but due in part to limited publicity about the program, the number enrolled has never reached even 1 percent.

Noble said starting a business is hard work and takes more hours than most people want to put in.

“Most say I don’t want to work 80 to 100 hours a week to start a business,” Noble said.

However, in some cases, she said people who initially sign up for regular unemployment benefits change their minds after a few months of searching unsuccessfully for a new job.