In recent years, self-employment has been considered one path out of welfare--particularly for women--by offering specialized programs emphasizing business skills training, counseling and technical assistance.

Since 1988, Michigan has participated in the multi-state Self-Employment Initiative Demonstration through the Detroit Self-Employment Project. Wayne State University has provided a complete entrepreneurial development program and has overseen the business strategies of AFDC recipients chosen for the project. This program has been part of a demonstration project involving several federal waivers permitting operation in a limited area and accumulation of business assets not normally allowed recipients of public assistance.

Participants in the program share these barriers to employment:

• They lack start-up capital.
• They are penalized under the normal public assistance rules for earning income, and accumulating assets.
• They lack health insurance once their grant is closed due to earnings.
• They have limited training in business operation.
• They share the stigma of being welfare recipients and are not seen as being capable of succeeding in business.

The results of this program have been significant in breaking each of those barriers and turning motivated public assistance recipients into taxpayers and employers.

• One female-owned construction company is building its first home on Detroit's east side. Begun in December 1989, the company had previously concentrated on remodeling homes. With between one and five contractual employees, this company grossed approximately $4,400 per month in the fall of 1991 and the recipient's case was closed.
• A female-owned-and-operated bakery, begun in January of 1990, now has two employees and sells wholesale on the east side of Detroit. With average gross income of up to $4,000 per month, this single parent has become independent and has become an excellent role model for her children.
• Another strong and ambitious woman has turned her love for people into a thriving business providing home-help services to senior citizens in the Detroit-Metro area. With one to ten people on staff, this quality-focused service is helping to meet a growing need within our state--care and assistance for the elderly. She has also eliminated her need for assistance and is earning an average gross income of $3,500 per month. She plans to enlarge her company and provide more seniors with her company's quality, loving care.

While not all of the 142 graduates of the Detroit Self Employment Project have earnings as high as these, each has a sense of achievement and pride in beating the odds, and 63 of them have already become productive Michigan small-business operators.

By expanding this program to areas of the state that have chronically high unemployment, we can focus job-creation opportunities where the potential for other public or private sources of new jobs is limited or nonexistent.

This program results in multiple benefits:

• It helps graduates break the cycle of dependency.
• It promotes higher levels of self-esteem.
• Graduates become excellent role models for their children and for other women.
• Newly-formed small businesses provide employment opportunities for other people, many of whom are also public assistance recipients.

According to researchers with the Manpower Demonstration Research Corporation (MDRC) entrepreneurial skills training and related supportive services are particularly productive for certain welfare recipients. Their report concludes that "it was feasible to operate self-employment training programs for a relatively small and select group of welfare recipients who combined fairly lengthy receipt with substantial educational attainment and employment histories." The experience in Detroit shows that clients with characteristics which fall into other profiles are also able to begin successful businesses.

The principal expenses for any self-employment development initiative are incurred in:

• supporting the skills training and related services,
• establishing a seed-capital loan fund to provide for start-up expenses.