Helping the Unemployed Create Their Own Jobs

A New York state program teaches the jobless how to become entrepreneurs, while still collecting benefits.

Danielle Bliss already had an inkling that she wanted to do something different with her career when she got laid off on New Year's Eve in 2010. For the previous five years, she'd been working for a national television station in New York City, doing on-air animation for the station's overnight shift. In her spare time, she took letterpress-printing classes: a nice, creative hobby for an art school graduate.

After Bliss lost her job, she spent about a month looking for other full-time gigs closer to her hometown in upstate New York, with no success. Then, through the local unemployment office, she learned about a New York state program that allows unemployed workers to start small businesses while still collecting unemployment checks. She thought, Why not? "Maybe this is what I'm supposed to do," she remembers thinking. "Maybe this will be the best thing for my future."

So in early 2011, Bliss enrolled in New York's Self Employment Assistance Program. Run out of the state Labor Department, the program is meant to train people who are likely to exhaust their unemployment benefits on how to become small business owners. The loosely-structured program requires its participants to take 20 hours of classes that teach them how to write up business plans, to track their progress, and to ultimately launch a business.

Participants can collect unemployment benefits for a maximum of 26 weeks while they go through the SEAP program. That's not a huge amount of time to plow through the logistics and bureaucracy associated with opening a small business, say past participants. Still, it does give people a little bit of a financial cushion. "It gives you resources, money, and the push you need to do it," says Mina Marsow, another SEAP graduate and owner of Prospect Gymnastics in Brooklyn. "When you're unemployed, it is so hard to get out of bed in the morning because you just have all of this time."

Too much time on one's hands is not the typical experience of an unemployed person enrolled in SEAP. Bliss, for instance, spent her days scrambling to complete the checklist needed to open her letterpress-printing business. She took seven small business classes at a local community college, including marketing and accounting. She worked with a business counselor to draw up a business plan, applied for a sales tax ID number, and found studio space in her husband's uncle's house for her massive printing presses.

She paid for the startup costs and classes out of her savings, while still collecting a weekly unemployment check and not having to look for another job. (Typically, unemployed individuals are not allowed to both work and draw benefits). "The SEAP program doesn't hold your hand. They give you a checklist of things you need to do to stay in the program," she says. "But it gave me the structure to know where to go."

Twenty-nine-year-old Marsow had a similar experience as a SEAP enrollee. The Brooklyn native lost her human resources management job in October 2013; as young professional, she assumed that she would easily find work before her six weeks of severance ran out. When she still had not landed a job and found herself collecting unemployment benefits, she learned about SEAP.

As Marsow started to research small business opportunities in her Brooklyn neighborhood, she realized that Flatbush did not have any gymnastics gyms. She had become involved with the sport as a child, and even taught at Manhattan's Chelsea Piers while she was in college. Suddenly, she had the germ of a business plan to hoist herself out of unemployment. On March 3, 2014, Marsow opened Prospect Gymnastics to teach tumbling and gymnastics to children and young teenagers. "I definitely learned from this experience that I want to be an entrepreneur and not work for anybody," she says. "I don't see myself going back to being an employee."

So far, roughly 9,500 New Yorkers have gone through SEAP.  A recent paper out of the Brookings Institution's Hamilton Project called attention to its merits. Evidence from a similar program in Massachusetts showed that allowing people to collect unemployment benefits while opening up a small business "can help the unemployed transition into productive unemployment, and can do so cost-effectively," the paper says.

Other states, including Delaware, Mississippi, New Hampshire, Oregon, Rhode Island, and Vermont, have offered these types of programs at different times, depending on the funding. The New York Self Employment Assistance Program is set to expire in December 2015; a spokesman for the department says SEAP has been renewed five times since it was first implemented roughly 20 years ago.

Bliss counts herself among the satisfied participants. By June 2011, roughly six months after her lay-off, Bliss had opened her business called Wishbone Letterpress. She designs everything from wedding invitations to greeting card lines, calendars, coasters, and other hand-printed goods, selling her wares online, at craft shows, and wholesale to stores like Urban Outfitters. The writer and creator of the HBO series "Girls," Lena Dunham, even posted some of Bliss's notecards on her Instagram feed—a huge social-media boost for Bliss and her company.

Bliss says that she now has so much work that she's on the verge of needing to hire an employee. "I feel like I am doing something that is an extension of me," she says. "I work all of the time, like 60 to 80 hours a week, but I love what I do. I really don't mind."