Economy | Rural Economy Project

Self-Employment Instead Of Unemployment

OPB | June 28, 2010 11 p.m. | Updated: Jan. 14, 2013 10:38 a.m. | Burns, OR

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By Kristian Foden-Vencil

Part of Series:

At 10.5 percent, Oregon’s unemployment rate is among the highest in the nation.

The figure gives the impression of a lackluster economy spread evenly throughout the state.

But the truth is there are pockets of activity surrounded by areas of economic malaise.

In Burns for example, the Louisiana Pacific veneer mill closed in 2007 — quickly followed by the town’s other big factory, which built RVs for Monaco Motorhomes.

The state feels that giving people unemployment benefits in a town where there are essentially no jobs is an expensive exercise in futitility. So the state is getting unemployed workers into a special program to try to start new businesses instead. 

Kristian Foden-Vencil reports.


 

Paul Clements was one of dozens of people who lost their jobs at Louisiana Pacific. Because of his years of service, he got a healthy severance check.

But rather than put the money in the bank, Clements bought $26,000 worth of sign printing equipment.

He can already drive you around town for a grand tour.

Paul Clements: “This is going to be a kung fu place and they took down the sign that was there. Paramour Art I did that one. It’s white aluminum. There’s my biggest banner I’ve done so far”

Kristian: “Oh yeah right, I can see it on the side of that RV”

Paul Clements: “Yeah”

Kristian: “Sage Rat Headquarters! I did see it on the way into town.”

Paul Clements: “Yeah. So they’ll take you on a sage rat safari if you want to go after them.”

The sign is for a local trading post and has brought in quite a few customers. But Clement’s signs can be found outside the local motel here, the neighborhood pizza joint, the church — just about everywhere.

It’s a good business, that pays his mortgage and puts food on the table. But Clements didn’t do it all on his own. He got help from the state’s Self-Employment Assistance Program.

Pat Sanderlin: “People that have been profiled as likely to exhaust their employment benefits, in other words, they’re going to run out of unemployment before they get back to work. We excuse them from work search.”

Pat Sanderlin is with the Oregon Employment Department.

Pat Sanderlin: “They get only the basic 26 weeks of unemployment. During that time if they resolve to start a business or to expand an existing business, they’re excused from work-search and they are allowed to keep whatever proceeds they make from their private enterprise over and above their unemployment.”

That’s a rather convoluted way of saying: the state will give you money to get your business off the ground.

The Self-Employment Assistance Program started as part of NAFTA, the North American Free Trade Agreement. The idea was to help people who lost their jobs as a result of whole industries moving overseas.

Sanderlin says it gets more popular during recessions. That’s when many people are forced to start their own businesses and there aren’t as many 9 to 5 jobs available. 

But the program isn’t open to everybody — you have to go through a tough profiling process. For example the state wants you to come from a town where unemployment is high; it wants you to have a higher eduction; to be older; and to have lost work in a dying industry.

Only then will the state give you money to start your business.

Paul Clements: “To me it was crucial to get some income because I used some of my severance pay to keep moving, but it would all be gone within a very short period of time if I didn’t get some income.”

Clements says that for six months, the state gave him about $300 a week.

Paul Clements: “The first three months I was actually back out laying carpet and vinyl and tile on the side, besides trying to start the business. And so I would have survived, it’s just that laying carpet and vinyl is like going to football camp everyday and for a 50-year-old guy that’s pretty rough.”

Kristian: “Bad on the knees?”

Paul Clements: “Especially after sitting behind a desk and using brain power for the last 16 years.”

But gradually, the sign business picked up and now Clements is designing and printing full-time. His wife, Jackie, says the transition from full-time job to self-employment was tough.

Jackie Clements: “Very scary, very insecure. It was interesting because at the same time it was scary, I knew it would work out. You know, the Lord takes care of us, when you do your part.”

The state doesn’t know how many businesses the Self-Employment Assistance Program has helped start. But Pat Sanderlin of the Oregon Employment Department says in 2007 and 2008, four out of five people who took part in the program successfully launched a business.

Pat Sanderlin: “As of February of 2009, we found that something like 70 percent of them were still in business and that was when the tsunami of unemployment hit us.  My own personal feeling about it is that in any given year, if we have a half-dozen businesses that make it, that’s a success.”

He says that’s because the state would have to pay the money out anyway — whether in unemployment benefits, or Self-Employment Assistance money.

But for small towns, like Burns, the program is very important says city manager Don Munkers.

Don Munkers: “It is extremely important that we keep the people in the community. They are the lifeblood of the community and the survival of the community. You know, every time a family leaves the school enrollment goes down.  They leave a gap in that school and in the funding for the school. And so it’s extremely important that we keep them in the community if we expect to grow and move forward.”

Back at a pasture on the outskirts of Burns, Paul and Jackie Clements run their two dogs and feed their three horses.

The couple considered moving in search of work. But, they say, the $90,000 they’d get for their house wouldn’t go far — and besides, they love wide open spaces.

Jackie Clements: “We’re right in the flight pattern and on the other side of the field we get geese and grey cranes, I don’t know the technical name.”

Paul Clements: “And we have 14 deer that live here.”

Kristian: “It’s beautiful.”

Jackie Clements: “We have owls, eagles.”

Paul Clements: “So why would anybody want to live on the west coast right?”

Jackie Clements: “It’s just a simpler slower pace of life. I love that.”


This story is part of our Rural Economy Project.  We’re looking at how small businesses and communities around Oregon are coping with the recession that began last year.

Next  we’ll visit Sisters, a picturesque tourist town where a longtime clock maker has built a profitable business. 

The Rural Economy Project is a partnership between OPB and the Rural Development Initiative, Sustainable Northwest and The Oregon Consortium and Oregon Workforce Alliance. 

The Rural Economy Project is funded by the Corporation for Public Broadcasting.

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