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The Progressive Economics Forum

Iggy’s EI Reversal

In case progressives needed another reason to distrust Michael Ignatieff, he just pulled the rug out from under Employment Insurance improvements:

Michael Ignatieff is reversing his support for a wide range of enhancements to Employment Insurance (EI) benefits, saying they are too expensive and are no longer required.

The Liberal Leader attempted to provoke a federal election around this time last year over some of the very reforms that are coming to a vote Wednesday in the House of Commons, but he now says he no longer supports them. . . .

“We supported measures when there was an economic crisis. We were in the middle of full crisis with a much higher unemployment rate. The situation has changed,” Mr. Ignatieff said.

The unemployment rate has come down from 8.4% in September 2009, when the Liberals tried to force an election over EI, to 8.1% in August 2010, the most recent data available. How does a 0.3% decline in the unemployment rate tip the balance from fighting an election campaign for EI improvements to not voting for those same improvements in Parliament?

This modest decline in the unemployment rate reflects an increase in employment, rather than any decrease in unemployment. In both September 2009 and August 2010, 1.5 million Canadians were officially unemployed. By this measure, Ignatieff is flat wrong to claim that “the situation has changed.”

The Liberals had championed lowering the entrance requirement to 360 hours to make EI benefits more accessible. For that proposal, the issue is not total unemployment, but the number of unemployed workers who cannot access benefits.

In September 2009, there were 818,000 EI recipients among 1,549,700 unemployed workers, leaving 731,700 without benefits. In July 2010 (the last month of EI data), there were 672,200 EI recipients out of 1,493,100 unemployed workers, leaving 820,900 without benefits.

So, the problem that the Liberals said they wanted to address has actually gotten worse. Ignatieff’s claim that EI improvements “are no longer required” lacks credibility.

Enjoy and share:

Comments

Comment from Travis Fast
Time: October 2, 2010, 8:59 pm

Iggy is shorting the CDN economy.

Comment from duncan cameron
Time: October 3, 2010, 7:40 am

The decision by Ignatieff to miss the vote on the BQ E.I. enhancement bill, along with enough of his members to ensure it failed caused Jack Layton to remark that his big tent was not big enough for the unemployed.
The irony in all this, is that the BQ became a force in Quebec because of the Liberal cuts around the time of the 95 referendum. Yvon Godin took out Doug Young on the same issue. In a very real sense the BQ are the party of U.I. You would think the Liberals would want to get on the other side of the issue, but maybe they do not want to hand a win to Duceppe.
And then, of course, there is the economic analysis. 2010 is not 1995. Interest rates are low. Deflation is what faces us. Governments cutting back on transfer payments, money that will be fully spent by the recipients, makes no sense. The Liberals are as Bay St. as ever, embracing a coalition with the Harpers on the issues that matter.
Chrétien may have taken up the Mulroney/Wilson agenda as if it were his own when he won, but in 1993 he campaigned on reducing unemployment. Run from the left … govern from the right, that is the Liberal way. Ignatieff does not seem to want to run at all.
Has anybody done an analysis of the BQ bill?

Comment from Andrew Jackson
Time: October 3, 2010, 3:34 pm

The BQ Bill incorporated the key reform elements supported by the CLC which had previously won support from all three opposition parties.

Comment from duncan cameron
Time: October 5, 2010, 9:23 am

My article on this is posted at rabble.ca. There is a link to a fine website tracking parliamentary votes. Of interest to labour activists it shows how each Liberal voted on the bill. A small number showed up to vote against.

Comment from eljay
Time: October 7, 2010, 5:59 pm

That’s why some call him Iffy.

Comment from Kinda Lazy Journo
Time: October 10, 2010, 11:45 am

You kind of phoned this one, and it’s ‘way too superficial an analysis to characterize this as a betrayal, as some have. First, what are the diff’s b/w this Bill & the one the Libs were advocating last year? This one has 3 expensive components:
1) Bumping up the weekly rate from 55% to 60% of ave. insurable earnings (from a current max. of $457 a week to, what, about $500?); what, forever? How much would that cost? did the Libs agree to that last year? how much would premiums have to rise to cover that? How many jobs might that cost?
2) Increasing the duration of benefits. By how much?… and all the same Q’s as above. The cons. & NDP agreed that was temporarily needed while the recession was shedding and not replacing jobs… is that still the case now?
3) Lowering the min. eligibility threshold to 360 hrs, from 420 (i.e., by 15%). And is that low threshold (of just a little over 9 wks or 2 months FTE employment in prev. yr.) to be across the board, i.e., in all regions, and forever? Even though currently the min. threshold in lower unemployment regions (>6%) is almost double that, at 700 (18+wks/4+mos FTE)? Permanently? Again, this is a tremendously expensive undertaking that could kill more jobs than its worth to fund, just to subsidize seasonal workers like tree planters or snow clearers who can pick vocations where they can work 2 months, and what, collect for 6, every year, then repeat the pattern? This helps the rest of the jobless and the economy how?

http://www.servicecanada.gc.ca/eng/ei/types/regular.shtml

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