Out of work? You may be out of luck. Why getting EI is harder than it’s ever been

Posted on August 10, 2024 in Policy Context

Source: — Authors:

TheStar.Com – Business/Opinion
Aug. 9, 2024.   By Armine Yalnizyan, Contributing Columnist

Cuts to EI in the nineties, writes Armine Yalnizyan, left a gutted program. Now, as unemployment rises, Canadian youth and newcomers are being hit hardest.

Access to employment insurance is now at its lowest level in Canadian history.

Let me repeat. As unemployment rises, access to jobless benefits is at its lowest level. In. Canadian. History.

There are now 1.4 million unemployed workers across Canada with only 463,890 receiving regular EI benefits. That means just a third of the unemployed are covered by benefits.

The overall jobless rate is 6.4 per cent, with a shocking 13.5 per cent of young people (15-24) out of work. Young people are always more likely to be unemployed, but since 1976 that difference has run between 1.5 and 1.75 times the overall rate of unemployment. Now, it’s more than double, the highest recorded difference in history, presenting real concerns about economic “scarring,” which impacts opportunities to earn over the long-term.

Almost all labour force growth in the past few years has come from newcomers where the unemployment news is not much better. The jobless rate for recent immigrants now stands at 12.6 per cent because — like young people — they are among the first to lose jobs as the economy slows.

And people in both groups are also the least likely to be able to access EI when they lose their jobs, even though they pay into the social insurance fund like everyone else, from the first hour of paid work.

It’s never been so bad. Back in 2015, the federal Liberals campaigned on the need to reverse past reforms that eroded access to EI.

Unemployment Insurance actually sprang from a political consensus, from the late 1930s until the 1970s, that affirmed that sustaining spending power of those who temporarily lost jobs would act as a stabilizer, preventing a short-term, localized economic slowdown from turning into something deeper, long-lasting and widespread — like containing a contagion.

The mood changed by the 1980s. From 1990 to 1996, two rounds of Conservative cuts and two rounds of Liberal cuts left the system of Unemployment Insurance gutted and its name revised — with an Orwellian flourish — to Employment Insurance. Nobody wanted to pay an able-bodied worker not to work, despite unemployment rates ballooning from under 7.5 per cent to over 11.5 per cent.

The pandemic quickly changed prevailing views, as unemployment spiked to 14 per cent.

Shutting down non-essential activities to literally contain the contagion made it crystal clear that the total loss of purchasing power could not only destroy individual lives; it could cripple the economy and turn a short-term setback into a long-term nightmare.

Thankfully, Ottawa didn’t shrink from resolving that crisis, but some chronic policy issues have become untouchable since the 1980s, EI reform among them. It’s back to being the political hot potato it was before the pandemic, for all parties.

The program is running a honking great cumulative deficit because of the pandemic and improving access would mean hiking premiums or adding federal funding. Both options are no-fly zones for politicians these days, which is why no party is truly the ‘working-for-workers’ party now.

It’s not like the feds haven’t made important changes to the system. They have doubled EI sickness benefits, from 15 to 26 weeks; introduced extensions in EI caregiving and parental benefits; and added EI funding for training.

But changes to regular jobless benefits have been temporary and targeted, despite repeated promises for deeper reforms. They’ve neither addressed workers’ needs in the 21st century, nor EI’s core purpose.

Today, more people are working more short and unpredictable hours, unable to trigger the hours required to become eligible for support. Before the cuts started in 1990, it took the equivalent of 195 hours to gain access to jobless benefits in regions with unemployment of 6.4 per cent, today’s national rate. Today it takes 665 hours.

Even if you qualify for help, soaring housing costs mean most can’t survive on 55 per cent of their insurable earnings, which top out at $63,200 a year. And good luck if you only made minimum wage.

Only a few months ago — when unemployment was at historic lows and job vacancies at historic highs — finding another job, even if it was still low-paid, was the go-to strategy for many workers.

But the Bank of Canada’s rate hikes have changed the game, and the impact of these hikes on the job market is far from over. As the Bank itself recently noted, the job search is taking longer, and more people are staying unemployed for longer.

Nobody — not the Liberals, the Conservatives or the NDP — talk about how they’d tackle unemployment or its little sister, jobless benefits.

Parties follow popular opinion, and both bosses and taxpayers still don’t want to pay an able-bodied working age person not to work. Even temporarily.

Maybe that’s because they think it will never happen to them; that they’ll never be fired or become unemployed. I’ve been in that camp and been proven wrong. Sometimes a new job takes longer to find than we’d like. Trust me when I say it gets ugly, fast.

If we don’t consider the possibility of some as-yet-unseen economic storm for ourselves, neither will our elected representatives.

https://www.thestar.com/business/opinion/out-of-work-you-may-be-out-of-luck-why-getting-ei-is-harder-than/article_51bbb61a-510d-11ef-ab64-d3cca38e6d9a.html

Tags: , ,

This entry was posted on Saturday, August 10th, 2024 at 10:00 am and is filed under Policy Context. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

Leave a Reply