System of employment insurance contains dis-incentives
In our current system of employment insurance, we have at least two dis- incentives I am aware of that keep people on unemployment longer than they likely should. The first is the well- known seasonal nature of a number of jobs involving a specific skill- set that is not very transferable to other jobs in other seasons.
Employment insurance becomes a well-established and even dependent year-round program, or a section of highway followed by an equally long bridge, then highway, bridge, and highway, in a never-ending and expensive loop going nowhere.
The second dis- incentive is the circumstance of a well-paying job of a second wage earner in a family with children and childcare expens- es. I recently talked to a woman who makes $45,000 a year at her job, but because of the child care expenses associated with having to work, actually nets $200 a month more if and when she gets laid off and is at home caring for the children herself and collecting employment. Why would she even try to go back to work until her unemployment ran out?
There are more jobs available in the province now than there has been in a long time, and employers are hearing potential employees turn down jobs until “their” unemployment runs out. While that is a logical choice, it is also a large statement that the EI system is more broken than ever. We can’t just shrug aside the notion that it’s easier, and more cost effective for people to stay on unemployment.
The idea of being employed more often than not must include the incentives that go along with that goal, otherwise, we’re going to find ourselves driving off that bridge into a long, dark, subterranean tunnel, and no turnaround at the end. All of a sudden, submarine monitoring is looking pretty good again.
Alex Harrold writes from Westport. He can be reached at