[Congressional Record Volume 157, Number 170 (Tuesday, November 8, 2011)]
[Senate]
[Pages S7192-S7193]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. WYDEN (for himself, Mr. Carper, and Mr. Casey):
  S. 1826. A bill to provide for the availability of self-employment 
assistance to individuals receiving extended compensation or emergency 
unemployment compensation; to the Committee on Finance.
  Mr. WYDEN. Mr. President, I rise today on behalf of myself, Senator 
Carper and Senator Casey to introduce the Startup Technical Assistance 
for Reemployment Training and Unemployment Prevention Act of 2011, or 
the STARTUP Act. This bill would allow unemployed Americans to use the 
unemployment insurance, UI, system to create jobs for themselves and 
for others.
  In too many cases, the current unemployment assistance programs allow 
the experience and expertise of America's unemployed workers to sit on 
the sidelines. The STARTUP Act promotes an alternative approach that 
gives the unemployed the ability to start their own businesses and get 
in the game, self-employment assistance, SEA.
  In Oregon, we have got this program up and running and think other 
states should be encouraged to do the same. By failing to take 
advantage of self-employment assistance, we are missing an opportunity 
to not only help currently unemployed workers but also to help our 
economy grow and create more jobs. I know this program works, its 
record in Oregon is strong and can be found in letters and testimony 
from individuals who have used the program.
  Take, for example, software developers Adam Lowry and Michael 
Richardson who joined the ranks of the unemployed when the tech startup 
they worked at went under in 2009. With little capital, they turned to 
Oregon's self-employment assistance program which allowed them to draw 
unemployment benefits while they and two friends launched the mobile 
software development company Urban Airship, which is now one of the 
best-known technology startups to emerge in Oregon in recent years. 
Just yesterday, Urban Airship announced $15.1 million in strategic 
investment from Salesforce.com and Verizon, among others. Last week an 
additional acquisition brought the company's total payroll to 51 
employees and an additional 22 open positions. At the root of Urban 
Airship's success are four entrepreneurial-minded individuals and a 
jump start from self-employment assistance.
  Expanding self-employment assistance is a creative way to use the 
current unemployment insurance structure to create new businesses and 
additional jobs beyond that of the immediate beneficiary. We often talk 
about the benefits of small businesses in this country, yet our 
unemployment insurance programs actually prevent aspiring entrepreneurs 
from putting their ideas to work. Under the unemployment insurance 
systems in most states, if you stop looking for a job or you turn down 
a job, you lose your unemployment benefit even if you are working to 
start your own business. States with active self-employment assistance 
programs, like Oregon, allow a small percent of the unemployed to focus 
full time on starting their own business while drawing down their 
unemployment benefits in the form of self-employment assistance. Anyone 
who has started a new business knows that getting it off the ground is 
a full time job in and of itself, and allowing would-be UI recipients 
to focus full-time on their new business vastly increases their 
likelihood of success. Rather than rely on others to create jobs for 
them, self-employment assistance allows determined entrepreneurs to 
create jobs for themselves and others.
  The President's proposal in the American Jobs Act is a step in the 
right direction; it allows states to quickly enter into an agreement 
with the Department of Labor and allow the long-term unemployed, those 
on extended unemployment compensation, to draw down their UI benefits 
in the form of self-employment assistance. However, this does little to 
encourage states to make self-employment assistance a part of their 
permanent strategy. We must be more far-sighted. We ought to provide 
states with a little assistance so that they can start self-employment 
programs of their own, not just for periods of extended unemployment 
compensation.
  I want to be clear: this is no giveaway. In order to get this 
benefit, unemployed workers have to meet the same wage and hour 
requirements as they would to receive UI and they must prove they have 
a viable business plan. The beneficiaries of self-employment assistance 
really have something to offer, they have solid work experience and 
solid ideas; and put into action, that combination can snowball into a 
successful business with multiple employees.
  There are 2.5 million micro businesses in the U.S., representing 88 
percent of all businesses. They generate $2.4 trillion in receipts, 
account for 17 percent of GDP, and employ more than 13 million people. 
If one out of every three of these businesses hired just one additional 
employee, the U.S. economy would achieve full employment. Expanding 
self-employment assistance helps us get there.
  A study by the Department of Labor found that self-employment 
participants were 19 times more likely than eligible non-participants 
to be self-employed at some point after being unemployed. Moreover, 
they were four times more likely to obtain employment of any kind. The 
average cost to create each of those jobs is $3,350. According to 
estimates from Princeton economist and former Federal Reserve Board 
Vice Chairman Alan Blinder, it takes about $93,000 worth of garden-
variety fiscal stimulus to create an average job. It is not hard to see 
that job creation through SEA is an incredible bargain.
  This program has been creating jobs and businesses in Oregon for 
nearly two decades. Earlier this year, Pat Sanderlin, who coordinates 
Oregon's program, conducted an informal ``census'' of enrollees since 
2004. He found that 77 percent of businesses started by SEA 
beneficiaries are still up and running. According to Mr. Sanderlin, the 
companies' combined annual payroll totals $7,888,210.
  Despite widespread support for self-employment and entrepreneurial 
programs, only a handful of states offer SEA, and those that do take 
advantage of it typically administer benefits to a small share of the 
unemployed. Only about 2,400 Oregonians have used the program since its 
inception in 1995. Though states currently have the option of taking 
advantage of self-employment assistance, the administrative costs to 
start a new program often prevent them from doing so. Because Federal 
law prevents self-employment benefits from being paid out while an 
individual is in a period of extended unemployment, the long-term 
unemployed cannot take advantage of the program.

[[Page S7193]]

  The STARTUP Act encourages states to utilize self-employment 
assistance by: allowing the long-term unemployed who remain eligible 
for regular or extended unemployment benefits to draw down those 
benefits in the form of self-employment assistance; providing technical 
assistance and model language from the Department of Labor for states 
that create new self-employment programs; and providing financial 
assistance to aid states in establishing, implementing, improving and/
or administering self-employment programs.
  Self-employment benefits can serve as a guaranteed source of startup 
capital for businesses. And unlike traditional unemployment insurance, 
workers who successfully exit this program by starting their own 
business can create more new jobs as business expands. When 
unemployment is high and workers face extended periods of joblessness, 
this is exactly the type of program we should embrace.
  I encourage my colleagues to support this legislation to expand self-
employment assistance programs so that more unemployed workers have an 
opportunity to create jobs for themselves and for others.
                                 ______