Economic growth may have resumed, but the unemployment rate won’t be falling anytime soon.

Andrew Jackson

Chief Economist; National Director, Canadian Labour Congress.

While the situation is not quite as daunting as in the U.S., Canada’s job market is still mired in deep recession. Chances are that it will take a long time to climb out of the hole into which we have fallen, unless governments give job creation the priority it deserves in the upcoming round of budgets.

Economic growth has resumed, but the consensus of private sector economists recently canvassed by the Department of Finance is that the national unemployment rate will average 8.5 per cent this year, and fall only slowly next year.

Our economy has to grow at an annual rate of at least 2 per cent to put a dent in unemployment. This is because the labour force is growing by 1 per cent per year as echo baby boomers still enter the job market in large numbers, and because labour productivity – output per hour of work – usually rises by at least 1 per cent per year.

If we are to stop the unemployment rate from rising, the economy has to generate about 350,000 jobs per year. On top of that, if we want to return to the unemployment rate we had before the Great Recession began in October 2008, we have to create about 500,000 new jobs – and that would still leave over 1 million Canadians out of work.

In January, the economy added 43,000 new jobs, but they were all part time. The national unemployment rate stood at 8.3 per cent, a bit down from the recession high, but the “real” unemployment rate is much higher.

A Statistics Canada measure adds to the number of unemployed those people who have dropped out of the labour force because no jobs are available, and the lost hours of people who want to work full-time but can find only part-time jobs. The unemployment rate by this measure is still over 12 per cent, or one in eight workers.

A significant proportion of the lay-offs that occurred during the recession and even before, especially in manufacturing and forestry, are permanent. We face a severe social and poverty crisis as tens of thousands of workers who are unemployed through no fault of their own exhaust their Employment Insurance benefits, and find that few if any jobs are available in hard-hit communities across the country.

Our EI program leaves far too many of these unemployed Canadians, especially women and lower wage, insecure workers, out in the cold. Only half of all unemployed workers qualify for benefits, and the average weekly benefit for those who do qualify is just $343. The more than 800,000 unemployed workers now on EI qualify for an average of just 38 weeks of benefits, and tens of thousands of workers who lost their jobs in the early stages of the crisis have already exhausted their claims.

EI benefits have been temporarily extended for five weeks for all workers, and up to 20 weeks for a few older workers. But this is not enough in a jobless recovery. Provincial social assistance caseloads are starting to rise rapidly.

As experienced and skilled workers are forced to turn to insecure, part-time and lower paid jobs in order to survive, more and more of the burden of unemployment will fall upon young people and recent immigrants. We now run the risk of creating a lost generation of highly educated workers, workers we will need in a few years when the baby boomers start to retire in large numbers.

There is also a huge risk that wages will start to fall significantly as desperate workers compete for an insufficient number of jobs. Wages for part-timers have already started to fall when adjusted for inflation.

There will be no quick or easy return to the job market we had before the Great Recession. The U.S. economy is very weak and our dollar is far too high, meaning there will be only a very slow recovery of exports and business investment. The housing boom, which has maintained jobs over the last few months, will soon run out of steam, leaving working households to deal with very high levels of debt. There can be no lasting recovery of consumer spending until we get a recovery in the job market.

The priority for governments, then, must now be jobs and support for the unemployed, not deficit reduction. Our national debt is low, just half of what it was in the mid 1990s. Interest rates are and will remain low.

Governments must deal with the human impacts of the jobs crisis, and set the stage for shared progress in the next economy. Now is the time for a public investment-led growth to support job creation today and a stronger private sector recovery tomorrow. Now is the time for investment in good public infrastructure and good public services as key job-creators and key drivers of private sector productivity in the future. Now is the time to help rather than turn our backs on the unemployed.

Back to What happens when EI runs out?

The thing that amazes Laurell Ritchie is that the laid-off autoworkers she meets every day haven’t given up hope.

They know their jobs are gone forever. They’ve exhausted their employment insurance benefits. They’ve maxed out their credit cards. They’ve written off the possibility of a comfortable retirement. But they still believe – somehow – they’ll get back on their feet.

“They, in fact, do see green shoots,” Ritchie, national representative for the Canadian Auto Workers, told a roomful of downcast anti-poverty activists in Toronto last week.

But she added a warning.

Half a million other jobless workers will exhaust their EI benefits this year. But, unlike the autoworkers, they won’t have a large severance settlement to fall back on. They won’t have a union to support them as they battle the self-doubt, depression and family tensions that come with long-term unemployment. And they’ll discover – as many autoworkers already have – that welfare isn’t as easy to get as they thought. To qualify for a monthly allowance of $585, applicants must deplete their savings and sell off their assets.

Ninety per cent will reject that option.

Beyond that, little is known about EI exhaustees. The federal government tracks the number, but won’t release it, claiming it is unreliable. The provinces and municipalities track welfare caseloads, but their statistics provide little information about the long-term unemployed. (The labour movement came up with its figures by piecing together information from various sources.)

These recession victims were largely ignored in Ottawa’s stimulus package. The 2009 federal budget extended EI benefits for a mere five weeks. Last September, to alleviate public pressure, the government added a 5-to-20-week top-up for older workers.

To put this in perspective, Washington increased its maximum entitlement to two years (double Canada’s) in hard-hit states. In most European countries, workers who exhaust their jobless benefits move into follow-up programs that offer training, counselling and modest, but not penurious, income support.

The governing Conservatives boycotted last week’s Recession Relief forum. So Ritchie tried to pin down the three opposition politicians who attended the town hall on what parties would do.

Liberal MP Derek Lee was circumspect. “It’s going to require a reworking of the EI program,” he said. “My party supports a thorough review to rework the program.” He estimated this review would take a year.

New Democrat Tony Martin was encouraging, but vague. He assured the audience that pressure is building in Ottawa to rethink the underpinnings of the Canadian economy. The combined voices of the provinces, unions, church groups, community activists and the opposition parties cannot be ignored, he said. “I’m hopeful, within the not-too-distant future, we, as a society, will take responsibility for each other.”

Green candidate Rebecca Harrison said her party would reduce EI premiums by one-third – the Conservatives intend to raise them next year – and provide generous support for the long-term unemployed. She didn’t explain how it would pay for this scheme.

Ritchie, determined to exact a tangible commitment, asked the Liberal and NDP representatives whether their parties would form a coalition to press for meaningful EI reform, with the support of the Bloc Québécois.

Lee displayed little enthusiasm for the idea. “We probably don’t need a coalition to do it. The three opposition parties have the votes. We may work more closely together than we originally thought.”

Martin dodged the question entirely, promising that he and his NDP colleagues would table private member’s bills on poverty eradication, housing, pensions and social assistance.

EI exhaustees are by no means the worst-off victims of the recession. But their plight provides an early glimpse of what Canadians can expect from Ottawa, as they face as a long, debilitating job drought.

Carol Goar’s column appears Monday, Wednesday and Friday.

Please sign the EI petition online here at this link….  EI Petition

From the Toronto Star

February 03, 2010

Carol Goar

The Prime Minister was half-right about employment insurance.

Stephen Harper assured Canadians a year ago that the glaring regional inequities in the system would sort themselves out as the recession widened and deepened.

The adjustment was painfully slow, but it happened.

A year ago, a laid-off worker living in Toronto needed 630 hours of paid employment to qualify for jobless benefits. He or she was entitled to 17 weeks of payments.

Today, a Torontonian who loses his or her job needs 560 hours of paid work to qualify for employment insurance. He or she gets 25 weeks of benefits.

Last February, there was an 11-week difference in jobless benefits between Toronto and Charlottetown. This February, it is down to three weeks.

For all its shortcomings, the EI system does respond – gradually – to regional changes in unemployment. The huge discrepancies the premiers were howling about last winter have largely disappeared.

But Harper was wrong when he told Canadians: “The system we have in place meets the needs of the market.”

It fails that test miserably.

It was built for an era of full-time jobs that provided a decent income and came with health and retirement benefits. It was designed to tide over laid-off workers while they found a new job or the factory reopened.

That Canada is long gone. Most of the jobs on offer now are part-time, short-term or casual. They come with no benefits. They seldom last long enough to allow a worker to accumulate the hours needed to qualify for EI benefits. In some cases, they don’t pay enough to live on.

These jobs vanish when demand slumps. They don’t lead to permanent positions. They leave millions of workers with no financial security and no safety net.

It’s true the current EI system serves parts of the market – the manufacturing sector, the mining, forestry and fishery sectors and the public sector – relatively well. The trouble is, those sectors are either declining or shedding their permanent employees in favour of cheaper, more dispensable contract workers.

Going into the recession, 37 per cent of Canadian employment was “non-standard” (part-time, temporary or short-term). Coming out, the percentage will be much higher. Many young people will spend their working lives stringing together contracts.

There is a second problem. Most of the blue collar jobs lost in this recession are gone forever. Many smokestack industries will never recover. The economic base of the country’s manufacturing heartland will have to be rebuilt.

The EI system doesn’t provide much support for workers caught in long-term structural shifts. They are entitled to roughly a year of jobless benefits. They can apply for retraining, but the terms are stringent and funds are limited.

The early victims of the recession have reached the end of their EI allowance. Many haven’t found work and didn’t apply – or weren’t accepted – for training programs that meet Ottawa’s specifications. Their last resort is welfare.

Yet Harper claims the EI system “meets the needs of the market.”

He owes Canadians an explanation of what “market” he means and why so many of them are excluded from it.

Regrettably, the opposition parties aren’t pressing him on the issue.

The Liberals seemed willing to fight for EI reform, until they checked the polls and found it wasn’t a popular cause. They backed off. New Democrats insisted on substantive EI improvements, until Harper proposed a modest extension of benefits. They voted for it, saying it would help “the people who elected us.”

Canada’s hole-ridden EI system still isn’t fixed. Nor is it fit for the 21st century.

It has merely slipped off the political agenda.

Carol Goar’s column appears Monday, Wednesday and Friday.

February 5, 2010

(Toronto) – The growth in part-time work is absolutely no cause for celebration,” says CAW President Ken Lewenza, in response to today’s unemployment numbers released by Statistics Canada Labour Force Survey.

“Instead it means that more Canadians are ending up in precarious employment – characterized by irregular hours, little job security, low wages and few benefits – this is really nothing to cheer about.”

The figures released this morning showed a surge in part-time employment of 43,000 new jobs, but no real growth in full-time work. Lewenza called the exclusive growth in part-time employment alarming and warned that it gives Canadians and more importantly, the government, a false sense of security that the economy is improving.

In the manufacturing sector for example, the country lost another 15,000 jobs this last month, while the professional, scientific and technical services category has lost more than 22,000 jobs.

“Workers need full-time, sustainable jobs that they can survive on, instead of having to string together part-time jobs to make ends meet,” said Lewenza. “I believe that’s what these new statistics show. We cannot jump start the economy with only part-time or temporary employment opportunities.”

The latest growth in part-time work coincides with the long-term labour market trend which has seen the number of people in part-time work, but actively looking for full-time employment, skyrocket by a whopping 184 per cent since 1997, according to Statistics Canada’s own data.*

“Today, approximately 900,000 Canadians fall into this category of people who work part-time, but are looking for full-time jobs,” said Lewenza. “This is a trend that won’t be reversed without serious government attention and intervention.  The country cannot sustain itself on a labour market of part-time jobs.”

*Labour Force Survey R8 Tables.