Jack Layton on Employment Insurance
Some pundits have blasted the NDP for voting with the Conservatives in exchange for “a bone,” “crumbs” or “a peanut” on Employment Insurance (EI).Â Others have convincingly countered that forcing an election right now would not advance EI reform or other progressive causes. Nevertheless, the decision to temporarily support the government deserves further analysis in terms of the EI proposal itself.
On the one hand, as I and other union representatives have been quoted as observing, extending benefits for some long-tenured workers falls well short of the full EI package proposed by us and by the NDP itself. On the other hand, this benefit extension is a clear improvement over the status quo. As several commentators have noted, it is difficult to determine how much improvement is enough to justify propping up the Conservatives.
The base of comparison is critical. Relative to the plan put forward by the labour movement and NDP, any reforms negotiated with the Conservatives or Liberals would be inadequate. If progressives hope to make any deals to enhance EI during this recession, we need a different comparator.
Budget 2009 Comparison
Over at Macleanâ€™s, Paul Wells suggests that the bar should be previous EI improvements. He argues that Budget 2009 included $6 billion of EI-related measures, far more than todayâ€™s proposed $1 billion. But his first numberÂ combinesÂ expenditures from the general revenue fund to the EI account for extended benefits, work-sharing and training with revenues temporarily forgone through the premium freeze, but billed to the EI account.
While the premium freeze makes sense, it is not a fiscal contribution to EI and is certainly not the same as enhanced benefits for the jobless. If the latter is our concern, then the relevant figure from Budget 2009 was under $2 billion. (If Wells were to check a more recent press release, he would find that worsening unemployment has since increased this cost to nearly $3 billion and raised his hybrid tally far more.)
Still, how can the NDP vote against $2 billion for EI months ago but in favour of $1 billion for EI today? This question is misconceived because the first round of EI improvements did not come from supporting the government. It was the threat of being replaced by a progressive coalition that made the governmentâ€™s survival conditional upon putting forward some EI improvements and other stimulus measures.
The NDPâ€™s current support for the government is conditional on it enacting a second round of EI improvements. No progress was made on EI (or other issues) in the interim because of unconditional Liberal support for the government.
360 Hours Comparison
Rather than a backward-looking comparator, I would suggest a forward-looking one. A key benchmark is the Liberal EI plan. If it had been significantly better than the Conservative proposal, then there would have been a case for rolling the dice. In theory, but contrary to all the polls, an election might have producedÂ a Parliament in which the Liberals could haveÂ reformed EI with NDP support.
The Liberals have been proposing to temporarily lower the entrance requirement for benefits to 360 paid hours for most workers. But they would keep it at 910 hours for new entrants and re-entrants to the labour force. The Parliamentary Budget Officer confirms that this initiative would cost $1 billion.
About 10% of unemployed workers are disqualified from EI benefits for having worked fewer hours than required in their region of residence. With 1.6 million Canadians unemployed, we might infer that roughly 160,000 do not have enough hours but would otherwise be eligible for benefits.
Because many of these people either have worked less than 360 hours or are new entrants,Â one must conclude that the Liberal plan would help fewer than 100,000 unemployed workers. (By comparison, the government estimates that its benefit extension would help 190,000 unemployed workers.)
In important ways, the Conservative and Liberal EI proposals are very similar. Both would be temporary and provide $1 billion of additional assistance. Both would arbitrarily exclude some unemployed workers and help only a small fraction of the 1.6-million total.
The main difference is which workers would receive the additional benefits. The Conservative plan targets mostly older workers laid off from steady jobs without having drawn heavily on EI in recent years. The Liberal plan would mostly aid unemployed workers who had previously been scrapping by on contract or part-time work.
It is difficult toÂ decide which group is more deserving of EI benefits. It is even more difficult to contend that the NDP should have voted down assistance for one group in order to possibly have a chance of instead providing the same amount of assistance to the other group. The NDP was right to temporarily support the government based on its EI proposal.
Progressives initially rallied around a lower national entrance requirement because it seemed like an achievable improvement, given concerns across the political spectrum about regional variation in entrance requirements. If even the watered-down Liberal version of the 360-hour standard were enacted, we would hail it as a victory. Now that public debate and Parliamentary pressure on EI have prompted the Conservatives to offer a similarly compromised extension of benefits, why would we call it a defeat?
Of course, EI benefits should have both a lower entrance requirement and a longer duration. Other needed reforms include a shorter waiting period, no clawback of severance or vacation pay, and a higher level of benefits. Passing the governmentâ€™s benefit extension should not, and will not, end the struggle for all of these improvements.