Self-Employment as a Job Creation Strategy Background Information

Transcription

1 Self-Employment as a Job Creation Strategy Background Information With support from Sam s Club and in partnership with The Hatcher Group, CFED conducted a Communications Audit to see what traditional and social media coverage was being devoted to the notion that self-employment is an effective job creation strategy. This document highlights the findings of the Audit and makes recommendations for organizations wishing to take part in a public education campaign to make the case for self-employment as a job-creation strategy. 1. There is very little coverage of self-employment as a job creation strategy. Sometimes there is discussion about small businesses as job creators, but rarely is there a focus on self-employed people as creators of their own jobs. As a result, there is even less discussion of the challenges facing the self-employed when creating and formalizing their businesses. One example of an article that does focus on these challenges is this piece from Bloomberg. 2. The coverage that does exist lacks depth and reach. The majority of the content that does exist is written by practitioners and other advocates in the self-employment and microenterprise fields. Because the content isn t coming from high-profile journalists, it doesn t get read or shared as widely. Instead, this content reaches niche albeit highly engaged audiences. As an example of this type of coverage, check out this Washington Post editorial. 3. There s no Twitter activity devoted specifically to this issue. In fact, the most coverage that small business receives is around events like Small Business Saturday. Self-employment as a job creation strategy is not part of this conversation. 4. Blog coverage of self-employment as a job creation strategy is targeted at an engaged, yet small audience. While we wish that self-employment were part of a more mainstream conversation, this finding does indicate that there are opportunities to get the word out. Working with writers and editors of blogs maintained by organizations with a stake in the selfemployment and microenterprise fields can generate coverage that will reach engaged audiences. 5. It s not just microenterprise and self-employment organizations doing this work. While the organizations we re used to working with are perhaps our strongest partners in the effort to mainstream self-employment as a job creation strategy, it s important to look beyond these organizations. For example, senior support services organizations like AARP and the Gerontological Society of America, or education outlets like the National Association for Community College Entrepreneurship, can be vital allies in our effort to promote the importance of support for self-employed people.

2 Self-Employment as a Job Creation Strategy Tax Time 2012 Quick Facts 1 of 3 The share of jobs created by self-employed startups since % The share of net new jobs that were created by businesses under five years old. 2 $7,500,000,000 The amount of capital assistance delivered to self-employed people through the Earned Income Tax Credit The number, in millions, of self-employed households who benefitted from the $7.5 billion described above The average number of jobs created by microbusinesses owned by low-income entrepreneurs. 5 2 The number of states Oregon and Washington that currently offer sufficient supports for owners of microenterprise. 6 1 The Kauffman Foundation. 2 The Kauffman Foundation. 3 Internal Revenue Service. 4 Internal Revenue Service. 5 Small Business Administration Assets & Opportunity Scorecard.

3 Self-Employment as a Job Creation Strategy Sample Blog Post Title: Self-Employment IS Job Creation Twenty-twelve was a banner year for small business. The election, combined with the lingering aftereffects of the Great Recession, brought small business to the forefront of a national conversation about job creation. Indeed, the American public refuses to believe that it s only large corporations who create jobs. In fact, not only is it not the case that large corporations create new jobs, but rather, according to research by the Kauffman Foundation, it s new and small businesses that are solely responsible for all net new jobs that are created in this country. Emphasis: All net new jobs. Although this fact is realized by the owners of startups under a year old those responsible for job creation the public is yet to embrace a system that supports entrepreneurs who, in essence, create jobs for themselves where employment is otherwise unavailable. Meanwhile, millions remain jobless in an economy that still has a long way to go. The struggles facing low-income people who turn to self-employment, though real, certainly aren t insurmountable. For example, one barrier facing the self-employed is that the cost to file the taxes necessary to stay legal is high. In many cases, paying to file taxes which themselves come with a lofty price tag simply isn t viable for business owners who lack liquid capital in the first place. Yet, programs exist to help these filers. Volunteer Income Tax Assistance (VITA) sites nonprofit programs authorized by the IRS to provide free or low-cost tax filing services not only defray the cost of filing, but can also help low-income entrepreneurs claim the Earned Income Tax Credit (EITC). Annually, the EITC delivers $7.5 billion in capital assistance to 4.4 million self-employed households. As a related example, low-income business owners often lack capital and business services that help more established businesses succeed. These services are currently being offered by nonprofits like [insert your organization s name] who help owners of startups access checking and savings accounts or who offer workshops and trainings on homeownership, foreclosure prevention, business development and financial management. These programs are already proving successful in hundreds of communities throughout the US. To expand on these successes, the federal government should expand programs that help entrepreneurs. Doing so would help more low-income entrepreneurs succeed. When they succeed, we all benefit. The key, of course, is making the obvious yet overlooked argument: that self-employment IS job creation.

4 vision solution Self-Employment as a Job Creation Strategy Message Box Millions remain jobless, yet there is little current support for those who want to create jobs for themselves by starting their own businesses One out of three new jobs is created by self-employed startups and businesses under five years old account for nearly all net job creation in this country since 1980 Low-income microbusiness owners often struggle with managing their business, including keeping good records and monitoring their profit or loss margins. That can lead to bad business decisions. Low-income microbusiness owners have little or no access to capital and business services. Paid tax preparation is often expensive and federally funded free tax preparation services are only allowed to serve low-income self-employed people in very limited circumstances. When more low-income selfemployed people succeed, our economy will grow and we will all benefit When low-income self-employed people get free or affordable tax help, and are connected with programs and services, their businesses will be more likely to survive and grow, creating even more jobs. When their businesses grow, they will generate more tax revenue. When self-employed individuals get tax preparation help their returns will have fewer errors, saving administrative costs problem action The Federal Government Should Expand Tax Assistance Programs to Help More Entrepreneurs Congress should also support innovative models offered by community-based financial institutions, such as sliding-scale or income-contingent tax preparation fees. SETI supports low-income entrepreneurs by providing tax preparation and business development services SETI programs help the selfemployed understand their direct and indirect business expenses. This allows businesses to budget for all expenses so they will be more successful in the long run. SETI programs help lowincome microbusiness owners claim the EITC when they are eligible, giving them access to a lump sum payment that can provide valuable business capital. Annually, the federal EITC delivers $7.5 billion in capital assistance to 4.4 million self-employed households. SETI programs help low-income selfemployed people access affordable checking and savings accounts and microloans. They offer workshops and counseling on homeownership, foreclosure, financial education and business development. Studies of similar programs show almost three out of four low-income microbusiness owners who receive microbusiness development services increase their incomes substantially.

5 Self-Employment as a Job Creation Strategy Elevator Pitch At a time of continuing high unemployment, millions of people are taking matters into their own hands and creating jobs for themselves through self-employment. One out of three new jobs is created by self-employed startups. Since 1980, nearly all net job creation in this country has been through businesses under five year olds. But to succeed, these new entrepreneurs many of whom have low incomes and little experience need greater support. Programs like the Self-Employment Tax Initiative provide low-cost tax preparation and business development services to help the self-employed formalize their businesses and take advantage of moneysaving tax credits. These programs should be expanded, because when more self-employed people succeed, our economy will grow and we will all benefit.

6 Self-Employment as a Job Creation Strategy Tweets NOTE: These Tweets are samples and organizations promoting the SETI public education campaign should feel free to customize them as needed. We simply ask, if you modify these Tweets, that you keep and #selfemployment hashtag so that we can track the conversation on Twitter. Let s encourage #selfemployment & support #microbiz and (your org Twitter handle). Learn more here bit.ly/tm5yz5 Tried-and-true: #Selfemployment & #Microbiz are the backbone of our #economy. Let s create more opportunity and (your org Twitter handle) bit.ly/tm5yz5 #Selfemployment creates the most jobs and grows our economy. Meet (name of story). She s living proof: bit.ly/tm5yz5 Quote from story about hiring and jobs update Name, #Selfemployment living & (your org Twitter handle) are showing Americans that #microbiz can create jobs & grow our economy. Know a local biz owner? Share their story w/ us! bit.ly/tm5yz5 1 of 3: The share of #jobs created by self-employed startups since #Selfemployment creates opportunity. More info here 100%: The share of net new jobs that were created by businesses under five years old. Get more facts here The avg number of #jobs created by #microbiz owned by low-income entrepreneurs. Let s support #selfemployment 2 - The number of states #Oregon and #Washington that currently offer sufficient supports for owners of #microbiz.

7 Self-Employment as a Job Creation Strategy Facebook Updates NOTE: Like the Tweets above, these Facebook updates are customizable and should be modified to meet the needs of those organizations helping to promote the SETI public education campaign. Should you experience difficulty embedding links in your Facebook posts, try copying and pasting the updates separately from the accompanying URLs. Self-employment can empower low-income workers, create jobs and grow our economy! Share this if you agree! Meet (name). She s living proof that the self-employed help grow our economy and create jobs in their communities. Read her story here and (your org Twitter handle) are trying to show Americans that micro-businesses are the backbone of our economy. Know a local biz owner? Share their story with us! Quote from story about hiring and jobs update Name bit.ly/tm5yz5

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