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How to Make UI a Springboard for Entrepreneurs

  • July 27, 2023
  • Taylor Maag

The United States’ Unemployment Insurance (UI) system is a lifeline for jobless Americans, and provides an income-smoothing effect for workers and their families, as well as sustains and stabilizes consumer spending during economic downturns. However, UI also has the potential to spur entrepreneurship through the Self-Employment Assistance (SEA) program. SEA is a program within our system that offers workers the opportunity to build a new business while accessing income support during times of job-loss.

Today, the Progressive Policy Institute (PPI) released a new policy brief “Empowering Entrepreneurship: Exploring the Untapped Potential of our Nation’s UI System,” detailing the importance of expanding entrepreneurship opportunities in the U.S. and the transformative role UI can play.

Report author Taylor Maag, PPI’s Director of Workforce Policy and the New Skills for a New Economy Project, recommends updating SEA to cut some of the “red tape” requirements that make it difficult for individuals to access and states to administer. She also suggests creating a new pilot program that can help policymakers understand the true impact of entrepreneurial opportunities for Americans who may not have as much access to means and capital.

“Our nation’s Unemployment Insurance system offers critical support during times of job loss, however it falls short in fostering opportunities for entrepreneurship, which plays a vital role in our country’s economy,” said Taylor Maag. “By enabling dislocated workers to pursue entrepreneurship, we can provide increased economic opportunity for individuals, communities, and the nation at large. Policymakers should not overlook UI’s untapped potential to create more of these economic opportunities.”
Read and download the report here.

The report makes the following policy recommendations:

  • Strike down arbitrary eligibility requirements for SEA, which make it harder for individuals to access this program.
  • Remove requirements that make SEA too costly for states to administer and disincentive states from participating in the program.
  • Create a pilot program to empower UI to support more entrepreneurship.The pilot would be a competitive grant program incentivizing states without active SEA programs to participate.

 

Download the policy brief here.

The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C., with offices in Brussels, Berlin and the United Kingdom. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org.

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Find an expert at PPI.

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Media Contact: Amelia Fox, afox@ppionline.org

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