By Brian Lee Crowley
Halifax Chronicle Herald, Moncton Times and Transcript
Yes, you read that right. Employment insurance causes unemployment.
How can that be? Don’t you have to be unemployed to claim EI?
Yes, but that’s not the issue. The issue is whether or not people choose to become unemployed because generous EI benefits are available. And around here EI has traditionally been a powerful enticement to many people not to work.
The next time a local politician puffs themselves up in indignation and denies that anybody takes EI when there is work available, ask them about these little examples of the EI system at work.
In Petit Rocher several years ago, when the fish plant closed for lack of fish the local workers demanded a provincial make work project to keep them working until they were fully stamped up. When the fish plant in the next town offered them work, and a free shuttle bus service to get them there, the workers angrily rejected the work until the province told them if there was work available there would be no make work projects.
A friend of mine moved from Vancouver to Nova Scotia’s South Shore and got a job in a restaurant. She was shocked when she was told that the restaurant, located in a good-sized community with few local restaurants, closed outside the tourist season. When asked, the owner said it wasn’t because she didn’t want to keep open all year long, but that she’d given up trying to get people to work in the winter once everyone was stamped up. My friend said that she was willing to work all year long. Once word of this got out, she got calls from employers all over town fighting to hire an employee willing to work over the winter.
My friends in the fish processing industry in Iceland tell me that they have given up trying to recruit workers from Newfoundland to go and work there at the height of the season, even though wages are good, and all their expenses would be paid.
Throughout the region, many seasonal employers keep people on just long enough to get them stamped up, and then lay them off to cycle more people through the system. The social pressure to do so is enormous, because a few months’ work guarantees each person a year’s income.
The last time I spoke at a service club, every single employer in the room had horror stories to tell about losing employees who preferred to go on EI to staying in work that was available for them. Typical was the story one small business owner who told me about one excellent worker who would only agree to be hired if the boss would promise to lay her off when she had qualified for EI. She explained that she liked to do her crafts during the autumn and sell them (under the table of course!) at the Christmas craft fairs. Now you know why there are so many bad crafts for sale in this region: it is your tax dollars at work.
In every one of these cases, it is not lack of work that has sidelined these workers, but rather a settled habit of expecting to be paid not to work for part of the year.
In fact, Human Resource Development Canada has tried in the past to place repeat EI recipients in full time work and top up their wages to ensure no loss of income compared to EI. They had to cancel those experiments because no one would participate. The reason? Many do not consider themselves “unemployed” when they’re on EI. Benefits are just part of their annual income.
Paying people not to work when this region faces shortages of workers in field after field is the height of folly. Yet every day for a week this past summer, the front page of the business section in the Halifax Herald was devoted to articles about labour shortages in the region. And we’re not just talking about engineers and nuclear physicists. We’re talking about unskilled, semi-skilled and skilled blue-collar work. It may not be in every local community, but it is here in the region, in Moncton, Halifax, St. John’s and elsewhere.
Atlantic Canada’s cities are growing, while our rural populations are shrinking. That’s because we no longer have to go to Calgary, Toronto and Vancouver to find work. But many of our local opportunities are being strangled for lack of workers, at a time when we still pay thousands of people to stay in seasonal work with little future prospects, and to spend many months of the year idle.
Anyone genuinely concerned with the welfare of workers should remember a line from a lovely song of Félix Leclerc’s: “The best way to kill a man is to pay him to do nothing.”
Brian Lee Crowley is president of the Atlantic Institute for Market Studies E-mail: email@example.com.