The Founder Visa vs. The Job Seeking Entrepreneur

I think Paul Graham’s essay on The Founder Visa is a great one in principal. I think there are tremendous benefits in having foreigners come to the US to start businesses. It never hurt innovation to have many startups vying for market space. On the other hand, there is another source of people that are hugely capable of starting businesses… the millions of laid off workers in our very own country.

The system has a financial assistance package for these people–it’s called unemployment insurance. Unfortunately the system has promoted a culture of paying people to look for jobs rather than create jobs. A case in point is that I, in California, am not eligible for unemployment insurance because I am starting a business that has already employed several people rather than looking for work “full time.”

When my previous company hit the wall and laid everyone off, I had two choices: 1) look for a new job, or 2) start my own company. For a variety of reasons (mostly good ones), I decided that it was time for me to do the latter. I searched around for resources and stumbled upon a program by the US Department of Labor that suggests entrepreneurs can obtain assistance similar to unemployment benefits when starting a new business. It’s called Self-Employment Assistance and is characterized as a drop-in replacement for unemployment benefits for those who have become jobless and are looking to start a new business.

Rather than pay people to be unemployed, the program pays people to create businesses that in turn can create even more jobs. Unfortunately, only about seven states participate in the program and California isn’t one of them. I asked around at the California EDD, but no one seems to know what I’m talking about.

It’s really a shame. By the figures, there are hundreds of thousands of perfectly capable people that have been laid off in the past month alone. These are experienced people that can become contributors to renewed growth by creating new businesses.

While I agree with Paul’s thoughts and feel they are well-placed, I am quite certain we can find 10,000 jobless entrepreneurs in our own country perfectly willing to try their hand at starting up a company. There is a program available to encourage them to take this step, but unfortunately many of our states don’t subscribe to it.