Layoff Insurance: Your Home-Based Business

Layoff Insurance is another benefit of the home-based lifestyle. 

Income from your business may or may not yet be enough to fully support you without other revenue sources. Whatever the size, though, the income is certainly better than nothing--and better than the small temporary payments one may receive from unemployment insurance if laid off.

Data revealed in this article will encourage you to expand your business. You should also get some ideas about where to advertise business opportunities, affiliate plans, or networking you are doing because places of relatively high unemployment should be excellent target markets.

Unemployed people need to find a way to protect themselves in the future. While they may have waited too long to change their current out-of-work situations, they must be shown how they can help themselves and that now is the time to do whatever it takes.

As you know, some of those out of work may collect unemployment insurance. In general, benefits are based on a percentage of an individual's earnings over a recent 52-week period--up to the given state's maximum amount.

For example, California traditionally has an above-average unemployment rate. Its maximum payment is $230 per week, which translates to annual benefits of about $11,960 for someone making $30,000 a year or more. 

Imagine what this has done to all the computer professionals who have lost their jobs. Even this amount is temporary—26 weeks in most cases with extensions during periods of high unemployment. These benefits are taxable as well.

News reports (www.newsobserver.com/24hour/business/story/840305p-5908738c.html) say 357,000 jobs were terminated in the U.S. in February 2003. In March there were another 108,000 jobs lost. 

The Minority Staff of the House Appropriations Committee issued a report saying that more than 1.5 million jobs have been lost since January 2001. Some of these figures may be politically motivated, but from anyone’s perspective, the job losses we are experiencing here in the U.S. are horrendous and worrisome.

What are your chances of losing your job?

It depends on where you live. Look at the following chart to see some places where recent job loss has been the highest.

The April 2003 unemployment rate was 6%, with another 48,000 jobs being eliminated.1 The Financial Forecast Center (www.forecasts.org/unemploy.htm) predicts unemployment in October 2003 will increase to 6.35 %.

This chart shows that mass layoffs took a major jump in 2001. The 2002 data are sure to be higher:

Mass Layoffs
Data for All States and the District of Columbia
Year	Qtr1	Qtr2	Qtr3	Qtr4	Annual
1995		1724	950	1764
1996	1408	1352	1021	1916	5697
1997	1317	1587	1082	1697	5683
1998	1320	1563	1234	1734	5851
1999	1509	1444	1097	1625	5675
2000	1330	1271	1014	2005	5620
2001	1765	2072	1815	2698	8350
SOURCE: US Bureau of Labor Statistics

What do you do to protect yourself from an unfriendly job market?

Standard advice about how to keep your job and make yourself valuable to your employer covers several things, but upon examination, none are very satisfactory. They all help the employer to steal your life while giving you little in return.

Unemployment defense ideas, for instance, suggest getting extra training. This is really good for the employee because it makes them more qualified. Will it get more pay for you? Not likely; you will just have to work harder for the same or less pay. Extra training won’t keep your job either. If it’s your turn, you will surely get the pink slip no matter what.

Another anti-unemployment technique suggests that you take on extra work or assume more responsibility. This increases your stress level, because you probably could not quite finish the job you had before you took on extra duties.

Not only does this extra work bring no job security, it often ends up going home with you for no extra pay at all. In May 2001, 19.8 million persons usually did some work at home as part of their primary job. 1 These workers, who reported working at home at least once per week, accounted for 15% of total employment. In fact, half of those who usually worked at home were wage and salary employees who took work home from the job on an unpaid basis! Of those, many worked about seven hours a week at home for free. Two-thirds of those who work at home said they did so because they need to "finish or catch up on work" or because it is the "nature of the job." In other words, they are trying to handle impossible job demands.

Employers are also trying to force workers to produce without pay by changing the wage-hour laws, allowing much more comp time rather than overtime pay. This might seem a good thing to some, but employers have a way of letting you know when you displease them. If you’re the least concerned about your job, you will do whatever they ask you to do.

Turn discouragement and unemployment time into Layoff Insurance.

The time between jobs has often been so long that unemployed people just stop trying. In April 2003, 1.4 million persons wanted and were available to work and had looked for a job sometime in the prior 12 months. 1 Among these were 437,000 discouraged workers, up from 320,000 in April 2002. Discouraged workers are not currently looking for work because they feel there are no jobs available for them.

Also in April 2003, 4.8 million persons were working part time, even though they would have preferred a full-time schedule. 1 The number of such workers increased by about 600,000 over the year. 

Worldwide the situation is no better. Business Week Online says unemployment in the euro zone is about 8.7%. 12.1 million people are out of work. In Germany it’s higher; the government says the unemployment rate there is 10.8 %.

What do you think that same Business Week article says is a possible silver lining to this very poor economic scenario? 

Small businesses and startups are expected to begin to lift the European economies.

Same story everywhere; small businesses produce most of the new jobs. In other words, create your own job! That’s the home-based entrepreneur. They make their own employment and built their own layoff insurance. They will never draw unemployment.

And if you still think it’s better to spend all your extra time looking for another job, consider this: Job-seekers often become ever more frustrated when they begin to realize employers are using software to automatically scan and evaluate resumes. No humans may ever be involved in the evaluation process when you're trying to find a job with one of these employers. When you spend the time and money to personally hand deliver a resume, it may get the very same treatment. Besides the fruitless effort to find a non-existent job, what else is there to do? It’s definitely time to look out for yourself. Build your layoff insurance now!

How do you get Layoff Insurance?

• Build your business by directing targeted advertising to high unemployment areas, such as the cities in the first chart listed in this article.

• Get ideas for your home-based business from your IAHBE membership resources:
  
  • “Stories About People With Successful Home-Based Businesses”
    
  • “Cottage Industry Ideas”
    
  • “Small Economic Units In Demand Worldwide”
    
• Promote your business in some small way every single day without fail.
  
• Set goals and revise them when needed
  
• Persist and never quit!