The annual Employment Insurance Coverage Survey is out, here. The rate of eligibility for regular benefits from Employment Insurance is the lowest since 2003, the earliest year that there is comparable data.
To qualify, a person must have worked in the past 12 months and contributed to Employment Insurance, they must have left their job for a valid reason (layoff is valid, quitting usually is not), and they must have worked between 420 & 700 hours depending on the unemployment rate in their region.
The reason for the lower eligibility rate in 2011 was an increase in the number of workers without sufficient qualifying hours. In 2011, 150,000 otherwise qualified unemployed workers did not work sufficient hours to qualify for E.I. benefits. The reason for this, Statistics Canada says, is an increase in the proportion of unemployed workers who last worked a temporary, non-seasonal job.
Hardest hit were people aged 25-44, and women of all ages. In 2010 and 2011 54% of new jobs for persons aged 25-44 were temporary, and 57% of new jobs for women were temporary – a whopping 95% of new jobs for women aged 25-44 were temporary.
In 2011 we saw increases in temporary employment in construction, trade, transportation and warehousing. In 2008, before the recession, there were 875,200 temporary jobs. In 2011 there were 1,017,200 temporary jobs, equal to an additional 142,000 temporary workers. This is equivalent to a 1 percentage point increase in temporary employment as a proportion of all jobs.
The increase in temporary work that we saw in 2011 is partly due to a sluggish and uncertain recovery and a winding down of government infrastructure projects that were in place during the recession (i.e. temporary jobs ended).
Government austerity policies were put in place before the economy was able to absorb those cuts. The PBO estimates that federal cuts will lead to slower GDP growth of 1% per year over 2014 – 2016, and 125,000 fewer jobs created over that period.
Changes made to EI in the federal 2012 budget will make this situation worse. Some of these changes have been implemented, such as the new “Working While on Claim” pilot, and eliminating the extra 5 weeks in high unemployment areas.
More changes are expected to become effective in early 2013 – such as the changes to suitable work.
These changes will work to lower wages and working conditions for all workers, employed as well as the unemployed. They will require unemployed workers to take jobs at below their skill level far too quickly, resulting in bad matches for both workers and employers. This will actually increase skills shortages.
Beyond requiring workers to take jobs at lower wages, the new rules will require workers to accept jobs which are different from their previous job in terms of working conditions and work schedule. For example, a worker may be obliged to shift from day work to shift work, or from permanent work to temporary contracts.
A Pan-Canadian affordable childcare program is an example of labour-intensive public infrastructure that more than pays for itself in the long run. With continued low borrowing costs, the federal government should be investing for the future in public infrastructure that improves labour productivity, rather than making cuts that are counter-productive.
- Banks and Balanced Budgets (January 22nd, 2015)
- Louis-Philippe Rochon’s Top 10 Economic Predictions for 2015 (January 11th, 2015)
- Minimum Wages and Employment Outcomes (October 30th, 2014)
- Should Welfare Recipients Try Harder to Find Work? (September 11th, 2014)
- Terrible, Horrible, No Good, Very Bad Job Numbers (September 5th, 2014)