Mar 24, 2009

BC leads country in rising EI claims


According to today’s Statscan release, unemployment insurance (EI) claims were up 47% in January 2009 compared to January 2008. This makes BC the leader in Canada when it comes to rising EI claims. I don’t think that was one of the Great Golden Goals.

There is a lag in the EI numbers, since the most recent data are for January. But we already know that in February, unemployment rates rose again, so the growth in the number of EI recipients is even greater.

The main point is that both EI and social assistance, the two key “automatic stabilizers” have been greatly weakened since the mid-1990s. Back in 1990-91, EI benefits were about $600 per week in today’s dollars; the current maximum EI benefit is $447. Inflation has also eroded the real value of social assistance benefits, which are already much smaller than what one could access on EI.

Even more troubling is that only 42% of BC’s unemployed workers qualified for EI benefits in December, and this percentage is even lower in Vancouver (33%) and Victoria (31%). This will put more pressure on provincial social assistance rolls, which were up 37% at last count. Social assistance also suffers from tremendous barriers for those in need to access the program.

Removing these barriers and increasing benefit levels would be a wise means of stimulating the economy, as almost all of that money would get spent, thereby supporting demand just at the time we need it.

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