Ottawa’s proposal to modify employment insurance benefits has hit a nerve. The most ticked-off Canadians are the seasonal workers dependent on EI in the winter months. But their initial fears may be overblown: the proposed reforms should not greatly affect the most dependent seasonal workers in Canada’s eastern provinces, and instead will encourage only modest changes in regions with booming job growth.
It’s true that reliance on EI can breed dependence — EI rules can create incentives for people and industries to use it to supplement seasonal work. Despite the sensible reasons behind the proposed reforms, which come across as mean-spirited and administratively cumbersome, breaking the dependency cycle requires targeting the root causes of repeat EI use.
Ottawa’s proposed changes would distinguish among three different types of EI claimants: 1) those who have little to no history of receiving benefits; 2) those with a pattern of repeat use; and 3) everyone who doesn’t fall into the first two categories. All future EI recipients would be asked to demonstrate a more active job search when on EI. Plus, as time receiving EI benefits increases, claimants — particularly frequent ones — would have to be more flexible about accepting alternative, somewhat lower-paid work close to one’s home.
Since the early 1970s, Canada’s EI program has supported regional and seasonal industries, encouraging some pockets of long-term EI dependence. Frequent claimants, who make up about 20 per cent of all annual claims nationwide, tend to live in regions with limited job opportunities, have relatively less education than others, work construction and live in Eastern Canada.
Trouble is, all workers — even those with no history of EI claims — pay the same premiums into EI. So it is full-time, full-year workers who fund this pattern of part-year work.
Political pressures have prevented successive federal governments from undertaking major reforms to scrap support for seasonal industries within EI. Most recently, in 1996, two major changes were introduced to target repeat claimants. One was an “intensity” rule to reduce benefit levels based on a history of past claims. Another was to force some high-income EI claimants — particularly frequent users — to pay back some benefits.
In 2000, however, fishing communities, which represent only a small portion of total EI claims, flexed their electoral muscle and pushed the government to reverse these reforms.
Despite coming across as mean-spirited and heavy-handed, the current set of reforms does not target the bulk of frequent claimants. New job search requirements would only meaningfully impact EI recipients if there are other jobs available in one’s geographic area. Hence, where there is scarce off-seasonal work — as is the case in most rural communities with EI reliance — recipients will not be greatly affected.
The proposed reforms may only affect the frequent claimants in regions where winter employment is booming, such as Alberta, Saskatchewan and British Columbia. For the few frequent claimants in these regions — most of whom are likely already looking for full-year work — these reforms might provide a welcome push off EI.
But these benefits must be weighed against additional administrative and enforcement costs: more resources will be needed to check individual job searches, look up alternative jobs in a region, and assess an individual’s skill set and commute times.
A typical Canadian year revolves around a spell of milder weather that allows for certain tasks — such as construction, fishing, farming and logging, among others — to take place. Government support for seasonal industries, if desirable, would best be funded by a program separate from EI.
Another option to discourage repeat EI use would be to factor in experience to rate premiums — allowing individual and employer EI premiums to increase or decrease according to one’s claim history. This way, those with a history of frequent claims would pay more into EI than those who have never drawn on the program.
Technological change, shifting needs for certain skill sets, and changing global demand highlight the need for flexibility in our labour markets. The problem is not that lazy people draw on EI — it’s that the EI program’s rules encourage some workers and businesses to use EI to bridge income gaps over the course of a year.
Past use of EI benefits should be accounted for, and Ottawa’s current proposal tries to address this. But by maintaining the link between benefits and local labour market conditions, Ottawa appears willing to preserve supports to the largest groups of repeat EI users, while spreading the new strict EI rules onto all recipients.
Original Article
Source: the star
Author: Colin Busby
It’s true that reliance on EI can breed dependence — EI rules can create incentives for people and industries to use it to supplement seasonal work. Despite the sensible reasons behind the proposed reforms, which come across as mean-spirited and administratively cumbersome, breaking the dependency cycle requires targeting the root causes of repeat EI use.
Ottawa’s proposed changes would distinguish among three different types of EI claimants: 1) those who have little to no history of receiving benefits; 2) those with a pattern of repeat use; and 3) everyone who doesn’t fall into the first two categories. All future EI recipients would be asked to demonstrate a more active job search when on EI. Plus, as time receiving EI benefits increases, claimants — particularly frequent ones — would have to be more flexible about accepting alternative, somewhat lower-paid work close to one’s home.
Since the early 1970s, Canada’s EI program has supported regional and seasonal industries, encouraging some pockets of long-term EI dependence. Frequent claimants, who make up about 20 per cent of all annual claims nationwide, tend to live in regions with limited job opportunities, have relatively less education than others, work construction and live in Eastern Canada.
Trouble is, all workers — even those with no history of EI claims — pay the same premiums into EI. So it is full-time, full-year workers who fund this pattern of part-year work.
Political pressures have prevented successive federal governments from undertaking major reforms to scrap support for seasonal industries within EI. Most recently, in 1996, two major changes were introduced to target repeat claimants. One was an “intensity” rule to reduce benefit levels based on a history of past claims. Another was to force some high-income EI claimants — particularly frequent users — to pay back some benefits.
In 2000, however, fishing communities, which represent only a small portion of total EI claims, flexed their electoral muscle and pushed the government to reverse these reforms.
Despite coming across as mean-spirited and heavy-handed, the current set of reforms does not target the bulk of frequent claimants. New job search requirements would only meaningfully impact EI recipients if there are other jobs available in one’s geographic area. Hence, where there is scarce off-seasonal work — as is the case in most rural communities with EI reliance — recipients will not be greatly affected.
The proposed reforms may only affect the frequent claimants in regions where winter employment is booming, such as Alberta, Saskatchewan and British Columbia. For the few frequent claimants in these regions — most of whom are likely already looking for full-year work — these reforms might provide a welcome push off EI.
But these benefits must be weighed against additional administrative and enforcement costs: more resources will be needed to check individual job searches, look up alternative jobs in a region, and assess an individual’s skill set and commute times.
A typical Canadian year revolves around a spell of milder weather that allows for certain tasks — such as construction, fishing, farming and logging, among others — to take place. Government support for seasonal industries, if desirable, would best be funded by a program separate from EI.
Another option to discourage repeat EI use would be to factor in experience to rate premiums — allowing individual and employer EI premiums to increase or decrease according to one’s claim history. This way, those with a history of frequent claims would pay more into EI than those who have never drawn on the program.
Technological change, shifting needs for certain skill sets, and changing global demand highlight the need for flexibility in our labour markets. The problem is not that lazy people draw on EI — it’s that the EI program’s rules encourage some workers and businesses to use EI to bridge income gaps over the course of a year.
Past use of EI benefits should be accounted for, and Ottawa’s current proposal tries to address this. But by maintaining the link between benefits and local labour market conditions, Ottawa appears willing to preserve supports to the largest groups of repeat EI users, while spreading the new strict EI rules onto all recipients.
Original Article
Source: the star
Author: Colin Busby
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