More Unemployment = More EI
For the first time in eight months, the number of Employment Insurance (EI) recipients increased in May. We already knew from the Labour Force Survey that unemployment had increased by just over 8,000 in May. It is good news that EI expanded by the same amount because it implies that those who became unemployed that month received benefits.
However, it is worth emphasizing that this EI expansion reflects worsening unemployment in May as opposed to a policy decision to improve the program. Unfortunately, EI has dropped off the Canadian political agenda.
By contrast, the US Senate just allocated $34 billion for a further extension of unemployment benefits. In some states, jobless Americans can qualify for up to 99 weeks of benefits.
The Government of Canadaâ€™s five-week extension of EI benefits, introduced in January 2009, is set to expire in September 2010. Even while this temporary extension remains in effect and even in those regions of Canada with the longest benefits, the maximum duration is 50 weeks.
AlthoughÂ the Canadian economy restored 372,000 jobs over the past year (June 2009 – June 2010), 270,000 more people entered the labour force. As a result, unemployment fell by only 102,000 and 1.5 million Canadians remain officially unemployed.
Persistently high unemployment should prompt the federal government to at least renew the five-week extension of regular EI benefits. It should also reinstate the special EI training benefits that ended in May.
UPDATE (July 24): Quoted by The Hamilton Spectator