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The Progressive Economics Forum

EI Runs Out

The number of Canadians receiving Employment Insurance (EI) benefits plummeted in December. The drop of 40,100 was the largest monthly decrease in years.

One would anticipate some decline in the number of EI recipients as the job market begins to recover. But the magnitude of December’s decline suggests that, in addition to those former recipients who found work, many more simply ran out of benefits.

The Labour Force Survey indicates that employment decreased by 2,600 in December. Therefore, it seems unlikely that 40,100 EI recipients found jobs during that month. (The December edition of the Survey of Employment, Payrolls and Hours will not be released until next week.)

Chronology reinforces the concern about people running out of benefits in December. EI claims normally expire after a year, but provide less than a year of benefits. Therefore, many claims established during the worst of the economic crisis (the end of 2008 and early 2009) would have expired or been exhausted in December 2009.

Fewer than half (47.8 %) of unemployed Canadians received EI benefits in December (744,010 out of 1,555,800).

The federal government has recently made some modest but welcome improvements to EI benefits. Today’s numbers underscore the need for further enhancements as unemployment remains high in the wake of the economic crisis.

UPDATE (February 20): Quoted in The Hamilton Spectator

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