Sunday, November 22, 2009

Jobs, Jobs and More Jobs?

The government's response to periods of high unemployment traditionally involves extending unemployment benefits. Currently, with maximum extensions, an unemployed person can qualify for up to 99 weeks of benefits. Needless to say, this strains the notion of unemployment insurance as any sort of (compulsory) premium-based insurance.

The structure of unemployment insurance, consistent with the larger structure of our society, is predicated upon a job being something that you get from somebody else. Our nation gives great lip service to entrepreneurship, but very little support for entrepreneurs. One of the benefits of meaningful health reform is that entrepreneurs would be able to obtain affordable insurance, something that ties a lot of workers to their jobs particularly after the age of forty. Entrepreneurs are blessed with the full burden of government regulations and the tax system - self-employment taxes to take the place of the employer's matching taxes. They don't get the tax breaks, credits, etc., handed out like candy to big businesses for "creating jobs". Health insurance comes into play again if they try to add employees, as they attempt to attract workers who want the same quality of coverage they can obtain through group plans offered by larger or governmental employers. It's tough.

Meanwhile, your unemployment benefits may be reduced or terminated if you attempt to start your own business, meaning that for most unemployed workers there's a disincentive to try to make their own work.

Is this sane? Somehow we transformed from a nation where "anybody can get rich" by starting a business to a nation where "everybody expects to get rich" by punching a clock. Pretty much anybody in the nation can recite the bromide, "You don't get rich working for somebody else," er, unless you're a professional athlete or banker, but it doesn't appear to have been internalized. A great many people truly seem to believe that they can work a $10/hour job year after year, and then one day, magically, they'll become multi-millionaires.

At the same time, we're in an era where it's relatively cheap and easy to market a new business through the Internet - if you still keep a copy, take a look at the Yellow Pages, to get a sense of how many businesses have dramatically reduced their investment or abandoned that expensive, traditional medium in favor of websites and online marketing. There are numerous programs available that make it possible to make money through online ventures, and numerous online ventures that help you market products to a national audience. Why aren't we teaching people how to take full advantage of these new opportunities?

If we're facing additional years of prolonged unemployment perhaps, rather than perpetuating the status quo, we should examine how we might boost entrepreneurship, lift the burdens on entrepreneurs as their businesses take off, and try to invigorate the economy from the bottom up. At a bare minimum, don't take away a would-be entrepreneur's modest unemployment benefits (or COBRA subsidy) if she dares to start a business that actually generates revenue. I can't imagine the equation where it's better to keep a prospective entrepreneur idle for up to 99 weeks because there aren't enough jobs, than it is to encourage them to get started with their own business ideas on day one.

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