Pogie dependency rising in New Brunswick

The latest figures from Statistics Canada reveal that the number of New Brunswickers claiming employment insurance (EI) benefits in September was up 2.3% compared to last year while nationally the number is down 7.4%. But these numbers don’t begin to tell the whole tale of EI in New Brunswick. The following chart shows the number of people claiming EI relative to the employed population among Canadian provinces. As you can see, the poorest provinces have the highest rate of EI usage.

But even that doesn’t accurately describe the full picture as it only looks at one specific month during the year. The best indicator of the prevalence of EI usage in New Brunswick is the number of people that at sometime during the year collect EI. The latest figures I have are for 2000. In that year, over 107,000 people recieved some income from the EI program. That same year, 394,000 people claimed employment income. Therefore, 27% of employed New Brunswickers in 2000 collected EI at some point during the year. That is over 1 out of every four New Brunswickers.

And now we hear rumours that the program is going to be expanded requiring less weeks worked and other changes to make the EI system more attractive. Once again, our government is favoring the easy way out – putting Atlantic Canadians on pogie while propping up the stronger economies with real economic development.

Don’t get me wrong. I am not for wholesale cuts to the EI system. Most of the people that work seasonally and collect EI in the offseason depend on it as a vital source of income – in many cases up to 40%-50% of their total annual income. Cutting them off would be akin to cutting your salary by 40%. These people depend on this money. In many rural areas in Atlantic Canada, the income from the EI system is the only thing keeping these communities from abject poverty.

However, the system as it is currently structured is deeply flawed. I recently had the occassion to interview over a dozen rural business people in Atlantic Canada and they all said that the EI system provides a major disincentive to work and, worse, drives a large portion of the economy underground. If as an employer, you are prepared to pay cash, you can find workers. This won’t effect their EI benefits. If you want some construction work on your house there are two prices – one if you need a receipt and a lower one if not. We are now in the most bizarre environments of all – rural communities with 20% unemployment or higher and businesses are unable to find workers. All across the region, employers are having to import workers from Mexico and other locales to work.

No, I think there must be a better way. How about, for starters, investing just a small portion of the amount of EI paid out in Atlantic Canada each year into economic development? There was close to $1.9 billion (with a B) paid out in EI claims in 2000 in Atlantic Canada – money paid to people not to work. A small portion of that amount could be invested in real jobs, paying real salaries and providing decent work in this region.

I don’t subscribe to the viewpoint of a 1980s alternative band, The Rainmakers, who took a very militant stand against all forms of welfare in their song, Government Cheese:

They’ll turn us all into beggars ’cause they’re easier to please

They’re feeding our people that Government Cheese

But I do feel sometimes that it is easier for governments to beef up EI and welfare than to try and tackle the real economic issues facing our region. But is it the best way?