According to Stats Can, as of May 2010, 37,680 people in Newfoundland are on EI. Population of Newfoundland as of April 2010 is 510,901. So 7.4% of the provincial population is on EI. If every one of those people were making minimum wage before going on EI, they would be making perhaps $17,000 a year on EI? If they spent about 5 years of their entire work life on EI, that is $85,000 per person. I am assuming a lot of things here of course, first of all, not everyone works minimum wage, not everyone spends 5 years on EI over the span of some 30 years they work. Some spend more, some spend less. But with those numbers, the government would be spending $3,202,800,000 every year on EI! That’s a huge chunk of the budget. Where does all this come from? Granted, when people are working, they pay into it. So it’s like giving them their money back when they need it. I love the system. But I wonder how efficient it is.
Imagine if the government did the exact same thing it is doing now but it tells the people on EI that they need to earn the EI. They need to do something to seek employment, either go back to school, do a training program or seek help of an employment agency. The government is already spending money on these people, why not pay them to ensure a better future for themselves? Imagine if the government paid a person on EI to take a 4 month technical training program. This person’s lifetime EI time might be cut down. Imagine if they went back to school and upgraded their education. Imagine if they went into a field that the province really needs and thus never needs to go on EI again. That’s $85,000 that does not need to be given to them for nothing. Imagine if the government said, the less time you spend on EI, the more money will be given to you once you retire. If, of those 37,680 people, even 680 people managed to get jobs and hold on to their jobs, that’s $57,800,000 that can go towards pensions.
It is not just a money game. Unemployment begets unemployment I think. The amount of stress someone goes through during unemployment is immense. It can affect their personal life and throw them into depression. If they have families to support, they can also suffer the negative impacts of unemployment in the family. These may have long term and permanent consequences on everyone involved. When someone is depressed, they usually don’t have the energy or the will to go look for a job, and they don’t have the mental state to hold on to one either. The lack of money and constant moving around can make depression worse, making this a catch 22. They are depressed because they don’t have a job, they don’t have a job because they are depressed. It goes on and on.
Being an active and productive member of the family and community is a great protector from many such mental stresses. I think the government can do better with the unfortunate ones who lose their job, either due to a downturn of economy, lack of need of their skills or for those who have no skills. The government can help ensure that everyone is doing something or is attempting to do something rather than playing the waiting game of who will hire them next. It is undoubtedly a better financial strategy and one that will keep the population healthier and happier.
Sources:
http://www40.statcan.gc.ca/l01/cst01/labor02a-eng.htm
http://www.stats.gov.nl.ca/Statistics/Population/PDF/Quarterly_Pop_Prov.pdf
"So 7.4% of the provincial population is on EI."
ReplyDeleteA more useful statistic would be the unemployment rate, which would be significantly higher.
"they would be making perhaps $17,000 a year on EI?"
If everyone was makign minimum wage, they would make about $11,000 per year on EI, assuming EI is 55% of your normal salary and earning $10 per hour would result in an annual salary of $20,000. Therefore, 17000 is inaccurate.
"the government would be spending $3,202,800,000 every year on EI!"
This is also inaccurate. If there are 37,680 people unemployed in the province, and the government pays out $11,000 each, the total will be: $414,480,000 per year.
Having cleared those up, your points are still well taken.
First of all, the government does require that people on EI are ready, willing, and able to work. This is not well enforced though and someone could theoretically do nothing while unemployed.
Ironically, if someone does training or education, it can affect their EI negatively. In other words, they are penalized for seeking to further their education and ultimately employability.