I know I have been writing quite a bit about this lately but after having a few more interesting conversations in the past few days, I have decided that I am now firmly in favour of completely overhauling the EI program. We should go back to an unemployment insurance scheme that is only used for persons who have lost their job and are robustly looking for a new one. In my recommended system, unemployment insurance officers are aggressively helping people find jobs.
I’ll give you an example.
A few years ago I was waiting to present to a city council on something and a staff person was making the case that council would need to hire several snowplow operators because it was getting extremely difficult to find them. Council was told that in the past heavy equipment operators would work construction jobs in the summer and plow snow in the winter but increasingly they wanted to take the winters off and collect EI.
In my proposed unepmloyment insurance system, the heavy equipment operator would get laid off in October and start collecting EI but then their job counsellor would call them and say “Hey, good news. I have a job for you as a snowplow operator. You will be able to work and make a full salary after all.”
The same would be the case for the Kings Landing carpenter that was all over the news a couple of years ago. Instead of twiddling his thumbs all winter while waiting for his work at Kings Landing to start in the spring, his job counsellor would be out there helping him to find other carpenter jobs.
Of course, in my proposed model, no one is forced to work. That is an individual decision. But if a person doesn’t want to work and there is a job matching their skills at roughly a similar level of pay, they wouldn’t be able to access the unemployment insurance program.
A simple but robust unemployment insurance system would not leave anyone out - it could be made widely available - no # of weeks or hours to qualify - no exclusions based on part time or full time, nothing - if you lose your job and are eagerly looking for a new one, the program would kick in with financial help, help finding a new job and job training if helpful. At the current funding levels I bet you could even pay 80-90% of their salaries for the short time they were unemployed.
Now, if government wants to provide income support for certain groups of the population - new parents, construction workers, seasonal manufacturing workers, Christmas wreath producers, agricultural workers, PSE students, etc. they could easily do that through other programs. Provincial governments through social development schemes or the federal government through its vast OAS/supplement income support infrastructure could do this easily.
This would remove the fiction that thousands and thousands of New Brunswickers (and Canadians in general) are unemployed and available for work when they are not. It would drop the workforce participation rate in a place like the Miramichi-Bathurst economic region by probably 5-10 percentage points or more but it would lead to a much lower unemployment rate and a clearer picture of who is and isn’t available for work. It’s not just a rural and smaller community issue, of course, but the rates of EI usage are lower in cities (in general).
It would make it harder for people who are not waiting for a seasonal job to begin to just collect EI for months and months until they decide to seriously look for a job because there would be an army of public servants connecting them to jobs (p.s. remember we now have record levels of job vacancies).
I know those of you who think about this issue will find my proposal unworkable. You will say the public would never allow a ‘construction worker income support program’ funded through the OAS system and eligible to certain construction workers who don’t want to work during the winter and not available to the thousands of construction workers that do work year round.
But you have that exact system right now. All I am saying is we need to remove it from the unemployment insurance system because it is creating labour market dysfunction - dysfunction we can’t afford these days.
There are billboards popping up all around the Moncton region advertising jobs. I tried to eat at two restaurants yesterday that had temporary signs posted on the door saying their opening hours were curtailed. No mention of why but I think we can all guess. The restaurant we ended up patronizing had a very large poster in the entry way announcing it was hiring “for all positions” and listing the various schemes it was using to lure workers.
We need to have an all hands on deck approach to solving this issue and the current EI system is just making things worse.
Hi David. I’m a recent university graduate living in PEI. Two months ago, I was looking for a government job, for I had specialized in public policy. However, I found many postings for remote jobs (ex: electronic assistants, customer service, and various administrative roles) with attractive descriptions and competitive pay. Increasingly, I have more friends working remotely for companies outside Atlantic Canada, instead of working locally. It seems as though these jobs appeal to those looking to transition from minimum wage to office administration jobs. Do you have any insights of how this pattern negatively affects the local job market, and how it might progress?
The current flat rate insurance premium is the key issue with this program. With a flat rate there's no accountability. Premiums paid by individual entities need to better reflect that of an actual "insurance" program.
Higher individual premiums paid by those entities who are seasonal in nature or use the program as a buffer to drive their own profits would encourage entities to find ways of keeping personnel employed year round. Therefore allowing individual premiums to be lowered accordingly.
Employees who have a similar history of misusing the EI program should be treated similarly.
This is easily handled on the employee end as there's already a need to indicate a reason for the change of employment on the slip that gets sent to the EI program.
This is how our personal auto insurance premiums are derived. If we have a poor driving record, we pay a higher premium. Therefore making us - hopefully - more responsible drivers as we seek out a lower yearly premium.
This change would also likely make entities more efficient, as well as encourage innovation.