The Ultimate Unemployment Benefit
After losing his six-figure-income position during a downsizing at a Massachusetts computer company, in August 1990, Steve Kirk saw his luck change. A month later he became a participant in the Massachusetts Enterprise Project (MEP), a federally sponsored program that seeks to test the viability of self-employment as a reemployment alternative for people on the dole. Modeled after successful programs in France and the United Kingdom, the MEP is designed to serve as a springboard for people (eligible for unemployment benefits) who wish to start their own businesses. Participants receive business-development consulting in the form of seminars and one-on-one training sessions; small-business loans for qualified borrowers; and a stipend equal to the person's regular unemployment compensation for 24 weeks.
Kirk launched his business, ESI Computing, in Carlisle, Mass., on personal savings of $40,000 and expects revenues to top $1 million this year. The program's biweekly training seminars in tax, legal, and accounting matters "allowed me not to spend a lot of money in the beginning on professional services," he says.
After losing her job as a nurse in a Wellesley, Mass., health-care center, last year, Rose-Marie Batts began to think about her options. One-on-one sessions with an MEP business-development consultant taught her "how to focus on what I needed to learn and on the development of my actual product," she says. Today Batts Healthcare Consulting Services, in Acton, Mass., launched on savings of less than $6,000, helps companies comply with Occupational Safety and Health Act standards and expects first-year revenues of $20,000.
Boston-based Shawmut Bank, the MEP's bank partner, has made $236,400 in commercial loans to program participants. Massachusetts is the only state in the country to test the federally sponsored self-employment option. MEP director Bonnie Dallinger says her department's next task is persuading the Clinton administration to incorporate self-employment options in its economic-stimulus package. -- Alessandra Bianchi* * *
Savings to the Unemployment-Insurance Trust Fund
|Started business or found job before end of regular benefits period||57%||34%|
|Exhausted regular benefits (remained on unemployment)||40%||65%|
|Collected extended benefits||31%||43%|
|Average benefits paid per person (including extensions)||$7,502||$8,927|
|Average weeks collecting unemployment insurance (including extensions)||28.3||33.7|
Source: Massachusetts Department of Employment and Training, May 1992.* * *