

Unemployment Benefits Extensions are Extending the Recession? - manish
http://blogs.law.harvard.edu/philg/2009/11/16/unemployment-benefits-extensions-are-extending-the-recession/

======
mtrichardson
Just want to point out that if you're finding yourself unemployed and wanting
to bootstrap your own business, your state might have something called the
Self Employment Assistance program - it's federally funded but managed by the
states.

After meeting with business counselors and ensuring that your idea is sound,
you file your business plan with the state (they don't share it) and can start
receiving your normal unemployment benefits.

Here's the awesome part: they're giving you the benefits to work on your
business full time. No need to do job searching. It's six months of runway.
Pretty awesome.

~~~
m_eiman
The same ting is also available in Sweden, here it's called "Starta eget-
bidrag". Info at:
[http://www.arbetsformedlingen.se/admin/Documents/faktablad/s...](http://www.arbetsformedlingen.se/admin/Documents/faktablad/stosta.pdf)

~~~
mahmud
What you call a social safety net in Sweden, we call a golden-parachute in the
U.S. Or at least it's perceived as such: I have little knowledge about
Sweden's local governance, but from what I gather, you have an aggressive
wealth redistribution system there. High taxes on earners, and fat paychecks
for the unemployed.

------
mustpax
The article contains a single anecdote about someone not looking for work due
to unemployment benefits. How does it follow from this that such benefits are
extending the recession?

Is the author saying that unemployment benefits keep consumer spending down?
If the person's take home pay is about the same, as the article suggests, this
should not be an issue.

Maybe the author is suggesting that unemployment benefits create a shortage of
labor by discouraging workforce participation? This would be an even harder
argument to make given the continued layoffs across all sectors of the
economy.

------
alttab
I've seen first hand that this is true.

My former room mate / business partner (see: iStoleYourStartup) was laid off
of his iPhone game dev job and started collecting unemployment (while
illegally trying to bootstrap iZenStudent).

They extended his unemployment benefits, so he _continued_ to not look for a
job and _continued_ not tell the Texas Workforce Commission that he was trying
to run his own business.

I had half a mind to turn him in because my tax dollars was funding his "start
up."

~~~
gojomo
I'm glad you didn't act on your resentments. It's healthier to move on.

I've got mixed feelings about the legitimacy of someone collecting
unemployment while attempting a bootstrap. For the startup-minded, trying to
get a project to self-sufficiency is in a way "searching for a job". I'm not
sure either they or the public treasury would be better served by them
aggressively seeking a W-2 job, even though that may be the ostensible
requirement of the unemployment compensation program.

(Unless the abuse is really blatant -- drawing a consistent documented salary-
like payment -- I also doubt most state bureaucracies would or could do
anything to cut off payments.)

~~~
alttab
I can only speculate why my initial comment here was voted up - then down.

The issue here wasn't that he was collecting unemployment while bootstrapping
-- its that he simply didn't tell the Texas Workforce Commission.

If you have a start up, and you tell the unemployment office, they may still
give you the full compensation (although I wonder if we would have received
the maximum allowed benefit).

When you sign up for unemployment they ask you if you are current self-
employed. He had his name on a DBA, had a fully functioning website up
describing his business - and withheld this information from TWC.

This is illegal.

~~~
gojomo
Don't sweat the random walk of comment scores. Good comments sometimes wind up
negative based on the arbitrary tastes of the last few voters.

Even if attempting "self-employment", if there's no money coming in, it's
arguable as to whether it should be called that for the purposes of some
government form.

Trying earnestly to launch a new corporation isn't precisely "self-
employment", either. If it succeeds, you get some mixture of capital gains,
dividends, and W-2 income -- none of which may ever be classified for tax
purposes as "self-employment income".

Scrappy bootstrapping doesn't map neatly into the fixed labels and "hours
worked", "wages earned" boxes of a state bureaucracy. Unless I was an
employment lawyer, a judge, or a TWC functionary, I wouldn't confidently
pronounce someone else's self-reported status as "illegal".

(I know I felt differently in my 20s. I'm more tolerant of different routes to
self-sufficiency, now, as long as they're in the right spirit.)

------
bruin4tw
Out of control government entitlements will be the end of California (my
state) and possibly America.

