Progress on AB 152!

Progress on California Bill to Help the Unemployed Start Small Businesses

CAMEO, the California Association for Micro Enterprise Opportunity, announces that AB 152, a bill to help the unemployed start their own small business, passed the California Assembly Insurance Committee today. The bill was authored by Assemblywoman Mariko Yamada (D–Davis) and sponsored by CAMEO.

AB 152 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.

Unemployed people such as the man who lost his job of 27 years with a Fortune 500 company, partly because he was too expensive. He said, “I’m 50 years old. They can hire a 22 year old for a lot less. I’m dead in the water if I try to stay in the same industry, it would be challenging at best.” He is starting his own business in fiduciary management. He needs to stay anonymous as he’s still collecting unemployment, because he doesn’t get paid you getting his license. He has a family to support and kids to send to college in a few years.

This bill would de-criminalize job creation within the unemployment system.

“As the U.S. labor market continues to evolve, it is increasingly important to provide an array of services to the unemployed,” Assemblymember Mariko Yamada said. “SEA is one component of a broader workforce strategy to promote entrepreneurship and micro-business development, both as a reemployment strategy and to support economic development through job creation.”

“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.

CAMEO’s mission is to grow a healthy, vibrant, thriving environment for all entrepreneurs and start-up businesses by advancing the work of our statewide member network – the over 160 organizations, agencies and individuals dedicated to furthering the growth of micro-businesses in California. Last year, CAMEO member organizations assisted the creation of 21,000 businesses that created 38,000 jobs.

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