Canada’s social security system is built on the premise that working-age adults don’t need income support for as long as they can remain active in the labour force. If that was ever true, it is increasingly not the case, and it will be even less so as labour and market practices that favour on-demand and gig-style workers continue to spread.

Predicting the future is an inexact science, but we can reform the Employment Insurance (EI) program to ensure that workers in all industries, occupations, and wage levels have access to a minimum level of income support.

If you think this is something we already have, think again.

The EI eligibility rate — the share of unemployed workers who had insurable jobs, left their jobs for reasons accepted by the program and had enough hours to qualify for benefits — was 84 per cent in 2017.

But what do we see when this ratio EI ratio is broken down by wage level? The ratio for workers who earned $15 or less per hour was a much lower 65 per cent, compared to 90 per cent for workers with higher wages.

A recent Canadian Centre for Policy Alternatives report looked at other EI coverage ratios by wage levels and found that low-wage workers come behind every time — except when it comes to paying premiums.

In 2015 (the most recent available data), workers who earned less than $30,000 a year contributed the equivalent of 1.8 per cent of their total employment income to EI, while higher paid workers contributed 1.1 per cent. This is because the EI maximum annual contribution represents a larger share of lower wages, and vice-versa.

To put it simply: lower-wage workers pay a higher share of their income into EI but are less likely to qualify for benefits.

Behind this discrepancy is a clear mismatch between EI eligibility rules and the reality of low-wage work. While EI rewards full-time workers who stay in the same job for medium and long periods, more than half of low-wage workers (52 per cent) are employed in industries with lots of part-time and temporary work. They are working in retail, in food and accommodation services, in building support services, and in the gig economy.

They are not doing anything wrong. They are working as many hours as they are given and paying EI premiums. They are individually penalized for labour market conditions beyond their control.

The good news is that making EI more inclusive is straightforward and inexpensive.

Since 2015, the Government of Canada has made progress in improving EI. Positive changes included the elimination of the higher eligibility requirement (920 hours) for new entrants and re-entrants to the labour market; the reduction in the waiting period from two weeks to one week; the increased flexibility of maternal, parental, and caregiving benefits; and the recent extension of fishing benefits.

This reform must continue, and attention needs to turn to the fundamental mismatch between EI eligibility rules and the conditions of low-wage work.

Currently, people have to work between 420 and 700 hours to qualify for EI, depending on where they live. Moving to 420 hours for everybody would increase the share of unemployed workers eligible for EI by 6 percentage points, and 60 per cent of new beneficiaries would be low-wage workers.

Under existing rules, people can’t get EI if they leave their jobs voluntarily. In 2017, nearly 1-in-5 unemployed low-wage workers had made sufficient contributions to the EI program, but didn’t have a valid job separation. Changing eligibility requirements would increase the share of unemployed workers who qualify for EI by 8 percentage points.

EI has a tailored arrangement for the fishing industry where eligibility is based on earnings and not on hours. If the same policy was implemented for low-wage workers, the share of unemployed low-wage workers who qualify for EI would increase by 7.5 to 9 percentage points.

Too expensive? Not at all. The cost of each of these changes varies from 0.7 to 3 per cent of the current amount paid in benefits annually.

Recognizing the changing nature of the labour market, and ensuring systems are in place to support those who do that work is key to building a more inclusive and resilient economy where all workers and their families are protected against hardship. We can’t predict the future of work, but we can prepare for it.

Ricardo Tranjan is a senior researcher with the Canadian Centre for Policy Alternatives Ontario office and author of the report Towards an Inclusive Economy: Syncing EI to the Reality of Low-Wage Work.