The Alice in Wonderland world of Employment Insurance
One of the interesting things about the EI program is that it gets is own unemployment rate. Specifically it organizes regions in New Brunswick differently than the normal Labour Force Survey essentially to group areas with higher seasonal unemployment in the same regions. There are three in New Brunswick:
Fredericton-Moncton-Saint John
Madawaska-Charlotte
Restigouche-Albert
The Fredericton-Moncton-Saint John EI zone is pretty self-explanatory. The Madawaska-Charlotte includes all the counties along the U.S. border from Madawaska to Charlotte and the Restigouche-Albert EI zone is essentially a gerrymandered region including everywhere else.
Restigouche-Albert EI Zone
Long time readers will know that I have argued that the ‘unemployment rate’ in these areas should actually be lower, not higher. Because seasonal workers are included in the unemployment statistics but they are not working and waiting for their seasonal job to start again next time, the unemployment rate is significantly distorted - if you define the unemployed as folks in the workforce and actually looking for work.
Now, you can define the unemployment rate any way you please but normally a high unemployment rate is signaling a lot of unemployment. But in the Alice in Wonderland world of EI, this is not necessarily the case.
I have recommended at the very least that anyone that uses the EI program seasonally should be removed from the calculation, period. Statistics Canada could publish a new statistic showing the unemployment rate in each area of the province with and without seasonal workers included.
I just want to know roughly how many people are actively looking for work at any given time around the province.
If we look at how many people declare EI income on their tax forms, relative to the number with employment income we get a broader view of the issue by region. Now these numbers include parental leave and folks that are not seasonal workers but the variance between, say, Fredericton and Campbellton is increasingly related to seasonal work and not unemployed folks who are actively looking for work. Essentially, with the exception of the big three and Edmundston, one out of every three people with employment income also reports EI income.
To the caller into the Maritime Noon show recently who told me I should be ashamed of myself for perpetrating the myth of the lazy seasonal worker in New Brunswick, I will reiterate that I’m actually not - in this instance - criticizing seasonal work or the EI program at all.
I’m just asking for a better view of the unemployment situation to aid in economic development and population growth planning. When potential investors see an ultra high unemployment rate they might avoid the area thinking it is a chronically weak economy.
When government officials are fielding requests from local businesses to bring in foreign workers, they may be reluctant because there are so many ‘unemployed’ in the area.
In general, people may be reluctant to take a job/move into an area with a very high unemployment rate worrying there may be no jobs for other family members.
We need to pretend the unemployment rate in much of New Brunswick is much lower than it really is. And that’s not particularly good for effective policy making.
Oh, and by the way, for those businesses in the large urban centres grumbling about it being hard to recruit staff this year? As those cutesy scamps told us in the original High School Musical, now “we’re all this together”.
Here is the unemployment rate under the Enhanced EI program for New Brunswick in May of this year (compared to previous).
And here is the actual unemployment rate (seasonally adjusted). In the Moncton CMA 8.8% and in the Saint John CMA 8.5%. Still high, of course, by pre-Covid-19 standards, but substantially lower than the rate used now by the EI program.