Grubstakes for the Enterprising Poor

Labor Day rolls around every year, a holiday to honor the workers who built the companies that made America great. We rarely recall the struggles those workers had at the beginning of the century, the suffering depicted in Upton Sinclair's "The Jungle."

Now Labor Day is celebrated by people who call unions counter-productive as well as by the union members converging on Washington to make the point that labor is still the bottom line. New battle lines are being drawn over the meaning of "competitiveness" in a world thrown topsy-turvy by rapid industrialization in the Far East, jet-speed delivery of products across vast distances, instant, world-wide communications. Gathering for "Solidarity Day," the workers ask whether they must now give up the protections and benefits won before Labor Day was a holiday.


But what if you don't have a job at all? What if you're on welfare?

According to Illinois Rep. Cardiss Collins, last year more than 11 million Americans needed Aid to Families with Dependent Children during an average month. More than 8 million workers ** received jobless benefits. The old brickbat, "Get a Job," loses force when the only job you can get won't feed your children, keep a roof over their heads or provide medical benefits to keep them healthy. The entrepreneurship trumpeted during the "me-first" decade of the Eighties, seemingly the answer to all social ills, remains beyond the reach of those who live on society's lowest rungs.


Things shouldn't have to be that way. Representative Collins and 42 like-minded members of the House of Representatives, including Baltimore's Kweisi Mfume, are pushing the Act for Microenterprise, H.R. 288, to help poor people get loans of from $50 to $5,000 to start small businesses. Introduced in the Senate by Charles Grassley of Iowa and Tom Daschle of South Dakota (S.B. 1395), the bill would allow people on welfare to take the loans without losing their benefits.

The act would require welfare agencies to distinguish between an applicant's personal and business assets, including loans, to prevent the recipients' own efforts to improve their situation from costing them their eligibility for aid. It would also waive agencies' consideration of income from the small-business activity for a one-year transition period. In addition, it would allow people otherwise eligible for unemployment compensation to continue getting payments while engaged in micro-enterprise activity, again for a one-year transition.

It would make micro-enterprise companies and the institutions assisting them eligible for Urban Development Action Grants, Community Development Block Grants and Small Business Administration funding. And it would create a "ME TOO" technical assistance office in each federal banking agency to act as a clearing house for information and promote micro-enterprise lending within the banking system.

Ohio Rep. Tony Hall's Freedom from Want Act, H.R. 2258, co-sponsored by 83 others in the House, would provide yearly $1 million grants to each of 10 states for a five-year period to develop microenterprise programs.

A companion Microenterprise Development Act, designed to strengthen U.S. business assistance to the Third World "poorest of the poor," is farther along. Patterned after the Grameen Bank of Bangladesh, the act would authorize $170 million for microenterprise lending over two years, earmarking $50 million for loans of less than $300. It passed in the House, but was weakened in the Senate at White House behest. Those objections pale in the face of the landmark success of the Grameen Bank, with its 98-percent repayment rate from an 800,000-client base. A General Accounting Office audit of earlier foreign-aid microenterprise lending found that U.S. efforts were not reaching the people most needing help.

Think loans of $50 to $5,000 are small bananas? Think again. John Johnson started his company, which publishes Ebony, Jet and Ebony Man, with a grubstake of less than $5,000 after World War II. So did Berry Gordy, who founded Motown Records and reshaped the sound of urban America.

This all comes to a head in September. Sen. Paul Sarbanes and Florida's Rep. Dante Fascell are to preside over a House-Senate conference to reconcile versions of the foreign-aid bill. Domestic microenterprise proposals are up for consider- ation as well. The numbers are in and the facts are known. It's long past time to join the creative abilities of the poorest laborers to the genius of free enterprise, bootstraps and all.