Seasonal EI wasteful, stunts economic growth

Worth A Look, Poverty, Brian Lee Crowley

Who knew that Eugene O’Neill was talking about EI in Atlantic Canada when he wrote, in A Moon for the Misbegotten that, “There is no present or future — only the past happening over and over again.”?

The past began over 30 years ago when the EI system (UI as it then was) was “liberalized”. Seasonal workers were suddenly eligible for months’ worth of benefits following a short bout of employment, at a time when rising productivity meant that fewer and fewer people were needed in natural resource industries.

In the rest of the world, people were slowly moved off the farm, out of the forest, the fishing boat and the mine, as their labour became less and less needed. But they moved on, got training, acquired new skills and entered expanding industries where workers were in demand.

Not in much of rural Atlantic Canada. As the amount of work declined, we increasingly called it “seasonal”. Workers, employers and provincial governments began to collaborate to split up work among people so as to maximize the flow of EI to each person, making up for the declining income that actually working produced. People who used to work several seasonal jobs in succession — fishing, lumbering, truck farming, etc.– began to change their behaviour. Working for more than 10 or 12 or 14 weeks (depending on EI rules at the time) began to be seen as anti-social because it might mean that someone else didn’t get fully stamped up.

Powerful rationalizations began to be widely repeated and believed about the system and how it worked. We all recognize them.

“I paid my EI premium, so I’m entitled.” In the real world, of course, if you built your house on a river’s flood plain and every year, regular as clockwork, your house were flooded, no one would insure you. Nor should they.

Unemployment does not come as an unpleasant surprise to seasonal workers, but as a totally predictable fact of life. But then having chosen seasonal work as a way of life, real “insurance” wouldn’t allow you to pass the costs of those choices on to others. It is only because EI for seasonal workers is a barely disguised taxpayer-financed welfare scheme that it can function at all. It is certainly not an “insurance” scheme, and paying your EI premium should not entitle you to take the premiums of workers who pay in expecting never to claim, except perhaps a handful of times in their working life when an unforeseen and uncontrollable bout of unemployment strikes them and their family.

Another rationalization is the famous, “Without EI no one would do seasonal work”. What nonsense. No one anywhere else in the world pays generous EI like we do for seasonal work, and yet seasonal work still seems to get done. You can’t get EI for tourism work in Florida, or for fishing in Maine, but somehow those industries manage to thrive.

My favourite EI rationalization, of course, is that, “There is no alternative”. There are no jobs in Atlantic Canada, runs this refrain, so curbing EI for seasonal workers is a heartless attack on the vulnerable. Now it is either true or not true that there are no jobs, and which it is will determine whether EI for seasonal work is even partially justified.

The construction industry says it isn’t correct. The Canadian Home Builders Association says that 44 percent of its members in this region cite trade and labour shortages as their most critical issues — double the national average. The aerospace industry doesn’t agree. It, along with a number of other industries, is begging provincial governments around the region to get their act together to encourage immigration of skilled workers. Even the fishing industry doesn’t agree. The head of the Nova Scotia fish processors’ association sees a looming labour shortage. The aging of the population plus outmigration means that that we’re rapidly running out of workers.

So paying people not to work for the majority of the year isn’t just stupid and wasteful. It has actually become a major bottleneck constraining our ability to grow. We could easily absorb more workers, while restoring their self-respect, by easing them out of seasonal work and into the full-time, full-year labour force.

This, by the way, is a highly successful left-wing policy. Bill Clinton did it when he ended “welfare as we have known it”. It is also the stated policy, for instance, of Tony Blair’s UK Labour government and of Sweden’s Social Democrats, all of whom push people vigorously off the dole and back into the workforce at the earliest opportunity.

Yet here the past keeps repeating itself, most recently in New Brunswick Liberal MP Dominique Leblanc’s shameful announcement on behalf of the election-bound federal government that taxpayers will reward seasonal workers even more richly in the future for not working.

As if O’Neill’s plays weren’t depressing enough.