COLUMN: Gunter – The government doesn’t owe you the job you want

- May 17th, 2012

EI isn’t entitlement insurance

by Lorne Gunter

If you lose your job, you shouldn’t have to take work that is beneath you. You shouldn’t have to accept a job that offers you less pay or worse working conditions.

If you find yourself unemployed in your home region, you shouldn’t have to move away to find work.

You should be free to make all of those choices. But the rest of us — we taxpayers and Employment Insurance (EI) premium payers — should be under no obligation to subsidize your decisions through our taxes and payroll deductions.

If you don’t want to take just any old job that comes along, if you don’t want to demean yourself with a position that doesn’t match your training or if you don’t want to move, fine. That’s your choice. Just don’t expect the rest of us to pay to keep you in your preferred lifestyle.

In the budget bill currently before Parliament, the Conservative government is seeking to change EI rules so claimants will be forced to accept work more readily and get off EI sooner.

It’s about time.

Employment Insurance is a lot of things, but an insurance plan to encourage employment it is not.

For one thing, the premiums aren’t based on the risk of making a claim.

Young drivers pay higher auto insurance premiums because they are much more likely to get in an accident. Yet Canadians in high-unemployment industries and high-unemployment regions make no higher EI contributions than those who live where they are never likely to be without work.

Indeed, those most likely to make EI claims will make far lower lifetime contributions than those who are unlikely ever to claim. That makes EI a welfare program underwritten by a tax on employment, rather than an insurance plan.

In the 1990s, I interviewed a Statistics Canada researcher who had made the study of EI his life’s work. He told me that he had discovered one New Brunswick town of 3,000 people where every adult had made at least one EI claim. Most had claimed three or more times.

In some areas, EI is an accepted part of the culture. It’s that entitlement mentality the Tories’ changes are aimed at breaking.

In the CBC’s fawning 1994 biography of Pierre Trudeau, St. Pierre admitted that one of the goals of his government’s ’70s-era reforms to Unemployment Insurance (as it was more accurately known then) was to enable Canadians to stay in their home regions if they wanted to, even if they were never likely to find steady work there.

So the scheme is also an interregional transfer of wealth — from have to have-not provinces.

Of course, every year thousands of Canadians move from have-not regions to more prosperous areas in search of better jobs and higher pay. So it is not as though everyone who could collects EI to stay put.

But the question is why should hard-working Canadians be compelled to subsidize anyone who refuses to move or turns down locally available work?

In 2009, Toronto’s C.D. Howe Institute released a long-term study of EI that showed the generosity of the program had doomed regions such as Quebec and Atlantic Canada to perpetual underperformance, economically.

Because benefits were rich enough to live on (and lasted up to 40 weeks a year!), too many workers were unwilling to put in overtime or work extra weeks, thus reducing industrial productivity in regions with high EI use.

So it is hardly mean of the Tories to try to force more EI claimants to get to work.

It’s only fair to taxpayers. And in the long run, it will be better for have-not regions, too.

Categories: Contributor Columns

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6 comments

  1. Stephen Smith says:

    EI pays 55% of the total of the job you just lost. So what if you now have to take a job flipping burgers that would pay you less the that 55% would have while you look for another job. That’s a race to the bottom.

    Perhaps we should just carve off the ‘doomed regions’ as you put and be done with them and Canada. That seems to end goal here.

  2. Ken says:

    I have no problem with looking at making changes to EI. After all, there have been many changes made over the years.

    Why not make it more like a real insurance program. Frequent users pay higher premiums. Higher salaried people pay higher premiums (maybe they already do).

    But I have been working for almost thirty years without ever collecting it, paying in the entire time. I don’t begrudge that because it is my safety net. During this time I have also advanced my career and been rewarded with increasing salary. If the worst happens and I lose my job, why am I not entitled to collect on this insurance? Why should I be forced right away to take a minimum wage job that pays less that the EI payments, or sell my house right away to take a job in a different region. These could be the ultimate outcomes as my EI payments come to an end but they shouldn’t be the first option.

    I find it interesting that the government is looking to make these changes at the same time that they are making thousands of people unemployed.

  3. Thomas_L...... says:

    Ken, how is it that the government is “making thousands of people unemployed”? By reducing a bloated public sector? So you favour replacing one racket with another? Apparently, you are a perfect Tru-Dopian.

  4. Kim says:

    Many of the people who I know who have taken advantage of EI feel entitled to it since they paid into it – irregardless of how long they worked or how little they actually paid. I’m actually for making people plan for their own future and taking responsibility for their own life and doing away with mandatory EI contributions. I find that if people pay into an “insurance” program, as this one is called, they feel entitled to the benefits – period. I find it interesting that Ken says that the government is directly at fault for thousands of people being unemployed.

  5. Arron says:

    This article hints on something which has bugged me for years. The higher risk users should be treated like high risk drivers and pay a bit more. People who never make a claim should eventually have a point where they do not have to pay anymore because they will never use it.

  6. Constantin says:

    While most would agree that stapling a one way ticket to Alberta to any pink slip might be very high handed, particularly where the program was, at least teoretically, run like a genuine insurance plan and people paid into it, its long term sustainability and ensuring that it does not import consequences that are contrary to our national interests are also critical. Study after study indicated that in its current form EI is a barier to development and prevents the flexibility required for a healthy economy. No one who cares about the future of this country should accept a federal program that provides uneven benefits accross regions. Particularly when one alternates well paid seasonal employment with regular collection of EI benefits, the requirement to accept lesser paid jobs off-season would not strike anyone as a “race to the bottom” but rather as a restoration of human dignity. EI was designed to address the catastrophic effects of loss of employment, but was never intended to be a cow to be milked regularly by large groups in the population.

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