The War on EI reform Commeth

Conservative economists are up in arms that anyone could suggest lowering the qualification requirements for workers wanting to access an insurance program they are obliged to contribute but for which they do not necessarily have access.

Case in point, Stephen Gordon an economist at Laval was interviewed on CBC and he had the temerity to assert that the opposition parties were purporting to return Canadians to the dark days of UI dependency where workers worked 10 weeks and then took a “vacation” (10-42 which he admits was a small group of “users”).   An honest look at the previous programme would conclude that although there was a small user base of “bilkers” the other group was more a victim of a defunct east coast growth paradigm, entrenched rural local business interests and governments bereft of vision (with some irony what we might call an “industrial policy” the very thing conservative economists hate).  It would in fact take the complete collapse of the fishery to provoke a fundamental rethink of the structural dependence by design aspect of the old UI system. Apparently this is wrong.  They still have not yet arrived at areal solution for the structural dependence on the EI program.

But all of this is beside the point.  No one in the opposition is suggesting a return to UI as a guaranteed income scheme.  Although I do not know why this should disturb a conservative economist?  Conservative economists tend to love programs which enforce some requirement to work.  Let us call this their Victorian vice.  Indeed the reason conservative economists like the WITB is because it gives an incentive to welfare recipients an incentive to work.  It is therefore somewhat perverse that they should prefer to exclude formally employed workers from the EI system so that they can go on welfare and then be incentivised to work through programs like the WITB.  In a bizarre twist during the interview Gordon suggested that while access to the program (which all workers are forced to contribute) should remain restricted those who do qualify should have their benefits increased!  A new moral milestone: not only a distinction between the deserving poor but a distinction of merit between deserving and undeserving workers:  All enough to make a good Victorian blush at the recognition of their Dickensonian sentiments.

But I digress.  Gordon even went further and conceded that relaxing the qualifying criteria would only benefit 2% more of the unemployed.  He went further to say that there were other ways to help the poor: such as beef up the GST rebate.  For a man who does not receive the GST rebate and is woefully ignorant of how much income replacement it would represent it was not only callous it was disingenuous.  It was disingenuous because Mr. Gordon knows full well the EI system should be well funded requiring no draws on general revenue. It was only a fleecing of the program which moved billions from the program to general revenue that voila the program needed extra funding.  As an aside, this is why the finance minister’s suggestion the increased EI payments are partly to blame for the increased deficit ring hollow.  It was that minister who raided EI to make room for his silly tax cuts.

But the point is this, there is no choice between increasing benefits or increasing eligibility if we make an honest accounting of how large the surplus was in the EI fund.  Similarly it is a false choice between beefing up the GST credit or the WITB program or extending eligibility.  The EI fund should be fat; it was raided to pay for silly tax cuts that even the economist in question wrote a long blog post against.  It is therefore disingenuous to turn around and make it a question of where money is best spent.  EI is paid for by employers and employees, the fund was fat, and it was depleted by a raid on what appeared to be its fat in good times.  In short, the trade off can only be posed if one accepts the hanky panky involved in the raiding of the EI fund.

2 thoughts on “The War on EI reform Commeth

  1. I think you’re awfully hung up on the process.

    Dr. Gordon is suggesting ways to best spend the money we have. Best use of resources and all that jazz.

    You’re complaining that EI should have more money. That’s interesting in a political sense, but completely unhelpful in terms of information for making a spending decision.

    Perhaps you can suggest some constructive alternatives instead of whinging about the past?

  2. “Dr. Gordon is suggesting ways to best spend the money we have”

    Uhm if you are talking about deficit spending then you are talking about money we do not have.

    My point is simply that EI would have plenty of money had it not been raided. And well I applaud the idea of looking forward it does ring a little churlish to my ears to suggest that: oh well that is all in the past and now after having ripped off both employees and employers by raiding the money from the EI fund that we should be lectured by the good Doctor about “tough choices.”

    Perhaps I would have more sympathy if the good Doctor had gotten out of bed to complain on his blog about the raiding of the EI fund. Unfortunately all we got from him was a deafening silence. Yes I am afraid that in this life in certain circumstance we must make judgements not simply about what was said at the time but also what was not said.

    Then, after the fact when it came to, by his own admission, spending a trivial extra amount of money on a trivial extra number of unemployed he spent the better part of SIX blog posts railing against the idea because…wait for it…it ***might***, in the future, distort the incentives of the labour market for a minuscule (by his own admission) amount of unemployed.

    So, no I do not think the doctor is credible, and I do not think he is an honest broker, and I further do not think that he just trying to be realistic, helpful or otherwise. I do think he has a political agenda to promote (as do I) as is his right! But there is a certain choosing of sides in this life and he has chosen his side (or compound angle) and I have chosen mine.

    So you are welcome to comment here any time you like (I will even give you a full blog post of your own if you like). But on one condition. You admit life is political and that Doctors, whether they touch the dirt, or the heavens, or prescribe pills have their political preferences and that colours their judgement because even if we agree on the facts there is no objective way to discern what is the CORRECT interpretation of the social origins and the consequences of those facts.

    Far more intelligent people then myself understand this basic existential fact of human existence…so ought you and the good doctor.

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