Solved the EI problem?

I got an email from someone saying “at least we should be thankful we solved the Employment Insurance problem”. I assume he was refering to the lower unemployment rate.

So, I figure this may be a good time to remind you of the difference between the # of people collecting EI and the unemployment rate because this is a common confusion.

The latest data we have on annual EI users is from 2005. There may be some change since then but I think based on the trending it will be minimal. In 2005, 107,000 New Brunswickers received EI payments (laid off, seasonal EI, training EI benefits and maternity benefits) or as a ratio – about 30% of total employment (see the chart below). That is for everyone that worked in 2006, about 3 out of 10 received an EI cheque. In New Brunswick, we are well over double the national average for folks collecting EI. however, Newfoundland/Labrador takes the cake – by far on this measurement.

Now of course, this is not all seasonal unemployment. There is some maternity and traditional layoff data in there. However, that is similar across provinces. The main area of difference is the seasonal work.

Do not equate “low unemployment” with limited “seasonal unemployment”. New Brunswick still has a huge seasonal workforce that is being paid not to work with tax dollars for some portion of the year. At a policy level, there has been almost no real effort to try and reduce New Brunswick’s reliance on seasonal employment (for example, fishing, forestry, construction, tourims) by any government in recent years. In fact, the federal Conservatives relaxed the eligibility rules around EI when they took the helm.

This entry was posted in Uncategorized. Bookmark the permalink.

0 Responses to Solved the EI problem?

  1. mikel says:

    This is akin to ‘solving’ cancer by killing the patient. So you empty out a province, and then say ‘at least there is no more umemployment’.

    Yes, thats true, there’s also less crime, less pollution (aggregate) and less money needing to be spent on education-because there are no PEOPLE.

    And of course the places that are MOST emptied are those places that typically had the highest ‘seasonal’ rates. This will always be a bone of contention for me, because its pretty pompous for tie wearing southern New Brunswick to gripe that fishermen, loggers, farmers, and people who risk their lives will actually get maybe four months off a year. Especially when the money comes from the feds. I suspect its that ‘it doesn’t matter what you do, but if you aren’t doing it ALL the time then you’re a leech’ thinking.

    But to back up his claim, let’s look at the figures you omit. The unemployment rate in Moncton, Saint John and Fredericton increased from 2004 to 2006, increased from 7 to 7.4% (hardly a ‘solved’ problem I’d suggest).

    Meanwhile, in Madawaska-Charlotte, the rate DECREASED, from 11.9 to 10%. In Restigouche-Albert it also decreased from 16.2% to 14.4 %. So in the ‘seasonal’ markets the rate is going down, while in the south it is increasing.

    Those are from EI’s statistics. However, there are a couple of other things to keep in mind. For one thing, I know a lot of people who have ‘given up’ trying to find a career and simply joined the military. The military is increasing its numbers at an enormous rate. That, like the civil service, is all taxpayer subsidized. So its not actually ‘the economy’ that has changed.

    Nationally it is far different as well, since the maritimes have high unemployment, meaning fewer jobs, its easier to collect benefits. That’s a complaint in Toronto, that huge numbers can’t even collect EI. So even nationally those numbers are VERY misleading. Unemployment certainly hasn’t been ‘solved’, keep in mind also that if you work part time, and many people work more than one part time job, then benefits are very low, hardly worth collecting.

  2. David Campbell says:

    Mikel, I will never like the policy of paying people not to work. I am just finishing a bio of FDR – the architect of unemployment insurance and he was adamant that able bodied persons that get UI must work while collecting it. People have every right not to work if they don’t want to. But they shouldn’t get paid out of a government fund not to work.

    And you claim to be Mr. Social. What is that EI program doing to rural New Brunswick? You defend it but I know a dozen or so young rural New Brunswickers who left because they didn’t want a seasonal work lifestyle. That wasn’t good enough for them.

    50 years ago, the guys would work in the woods, fight fires, plow snow and be a fishing guide – all in the same year. As the seasons changed, they just changed the work they were doing.

    I think the EI culture is killing rural New Brunswick – slowly but surely and I will go on advocating for year round, good paying jobs for those communities currently based on seasonal industries.

    If you can’t see the correlation between seasonal economies and economic decline in Canada, than I don’t know what else to say. Blame it on public policy, on industry or on culture but the areas with the highest rates of seasonal EI are the ones being hardest hit.

    And as for your constant snide remarks about people who ‘wear ties’ or live in ‘southern New Brunswick’, I actually am seriously concerned about northern and rural New Brunswick and have spent much of my career trying to add some new thinking to this problem.

    I think guys like you are the problem. I think the main reason why no politician in New Brunswick is even raising the possibility that EI could be at least part of the problem is that mikel rants would pour into constituency offices and block roads with placards. Why bother? Keep the gravy train going, leave the problem for the next guy.

    And then you won’t get yelled at by mikel.

  3. Anonymous says:

    David – Thank you, you restored my faith in your blog. This north-good, south-evil theme is sickening and you hit the nail on the head with your remarks.

    And, to take your comments one step further, one could look at the entire Atlantic region as the north of NB; we accept crumbs that may allow for short-lived bliss but they are sustaining long term doom. We need, and want, meaningful, sustainable initiatives.

    You had a post about tough decisions recently. One of the tough decisions that must be made is to stop assuming the loudest and most emotional people represent the majority.

  4. richard says:

    Is EI for the seasonally-employed just for the benefit of the unemployed worker, or is it more of a subsidy for industries that emply seasonal workers?

    How do other countries handle this problem of seasonal employment?

  5. David Campbell says:

    I am not sure about Europe but there is no ‘seasonal’ unemployment insurance in the U.S. at all.

  6. mikel says:

    Dude, a little too touchy. Tie wearing means POLITICIANS and bureaucrats. YOU have zero political effect, not much more than me.

    However, to be fair, there has often been a pretty Moncton centric focus to this blog and I suspect if somebody mentioned moving a research centre from Moncton to Campbellton you’d be blogging about it.

    First, of course, is an ideological difference, and a BIG one. You see EI as ‘getting paid not to work’. Fair enough, thats how YOU see it. Like I said, there is a BIG difference between what these people do and what other workers do. These guys risk their life. Not only do they risk their life but they also live in communities that are bypassed as far as economic development goes. They pay income taxes that goes to research in Moncton or Saint John, meanwhile their villages are ignored even when developing business ideas that would perhaps lead to full year employment.

    To me, they are paid what they deserve. WHen you risk your life, you are entitled to far more, and this is usually a bare minimum. This is just an example of a government policy that for once attempts to rectify a problem in the capitalist system. So thats a different way of looking at things, that’s all. The english had a hell of time with the irish and the natives because they had no tradition of private property. They called them theives and villains but its just a different way of looking at things.

    Cutting off EI means emptying out those areas. You are absolutely right to argue for fair economic development so that those regions could be more diverse, and perhaps with more jobs and income in those areas then there wouldn’t be so much to complain about because some very few are collecting EI.

    Keep in mind that EI essentially is the fallback before welfare. Get rid of EI, then the PROVINCE ends up paying more for welfare. At least this way it is the feds that pay (well, the workers but you know what I mean).

    And of course I mean as little to the argument as you do, even less. Its not me that puts the torch to a MP’s riding office if threats are made to make cutbacks-these northerners and easterners aren’t looking online for provocation.

    They aren’t stupid, they know how politics works and god bless them. Ottawa completely unregulates fisheries and gives tax credits to foreign corporations to overfish, wiping out the product, then people start griping at the guys trying to make a living at what little is left.

    Like they say, if you enjoy eating, thank a farmer. All the bureaucrats, teachers, industrialists, and politicians in the world don’t put food on the table.

    It’s not EI that has made rural New Brunswick dependant, its the fact that there is no investment there. When there are lots of good jobs in a diverse economy in Edmunston or Bathurst, THEN we can talk about dismantling EI.

    As has been mentioned before, just as problematic as seasonal workers is seasonal employers. So punishing the people at the bottom of the food chain seems a pretty odd way of developing an economy. Making people poorer never improves an economy.

    There is also the very unfortunate view that just because somebody doesn’t get PAID, that they do no ‘work’. Much of the most essential work done in the country is volunteer work. People assume that when people aren’t working they are lazying around watching TV. Thats an ideological view. If you’ve lived in a rural area then you know that most of what gets done is done by volunteers, even things that city folk take for granted because their municipality takes care of it.

    I know many fishermen and loggers. The work they do in a week would put you or I in the grave. But again, the assumption is that ‘they are doing nothing’. To posit a suggestion, thats usually because its people like us who work all the time and IF we had that time off we know what we’d do-nothing. So we ASSUME that these people don’t do any work.

    I’m not sure we are talking about the same thing. If there were a system where a fisherman was paid what he was WORTH, meaning a fair wage that let him live the whole year on what he earned, then there would be no need of EI. Problem solved. Or, if there were another local industry that let him work the rest of the season at something else he was qualified for, then that also solves the problem.

    However, it always comes down to the same ideological difference-whether you believe people exist to serve the economy, or whether the economy exists to serve people. These people, even on EI, don’t take NEARLY what Irving and other industrialists pull out of the system. There are no millionaires on EI, and like I said, they don’t sit on their asses all winter. Its too bad that VIEW is so rampant.

  7. Anonymous says:

    “There is also the very unfortunate view that just because somebody doesn’t get PAID, that they do no ‘work’.”

    You are bang on here. More than half the people I know who have been on EI also worked a job for cash. EI promotes an underground economy and it is in deed dangerous; the loggers, truck drivers, day care workers, mechanics etc that are working ‘under the table’ are not covered with worker’s compenation, disability etc.

    EI should not be so easily accessible that is more attractive than going after a job (which may involve training, commuting, arrange child care and all the other inconveniences of work).

    Figuring EI into career prospects is not positive in the long run. It is designed as a short term ‘insurance’ and should be treated that way.