By Moira Baird
More young people in Atlantic Canada dropped off the employment insurance (EI) rolls thanks to the federal government’s “tightening” of the program’s rules in the 1990s, according to a Halifax-based think-tank.
As a result, fewer young Atlantic Canadians are choosing seasonal work in the construction, mining, fishing and forestry sectors. Increasing numbers are moving into long-term employment in the managerial, natural sciences and education sectors. And many are staying in high school or going on to post-secondary institutions.
The impact of the rule changes was most noticeable among people ages 18-29 because they were new entrants to the labour force, says a report released Thursday by the Atlantic Institute for Market Studies (AIMS).
Titled Beyond a Hard Place, the report was written by University of New Brunswick professors David Murrell and Rick Audas.
The authors caution these gains could be hurt by last month’s changes to the EI intensity rule and the clawback provisions. They refer to the “re-liberalization” of the rules as “regressive.
“It will also make seasonal, blue-collar occupations more attractive to young people entering the labour market. This could contribute to a new generation of young people being caught in a trap of working enough weeks to qualify for their EI benefits.”
It notes that the region’s young people still go into “highly seasonal occupations” at a significantly higher rate than the national average. It also points out that the proportion of Atlantic Canadians who earn more than $45,000 and receive employment insurance benefits remains more than twice the national average.
As for the reason more young people were affected by the EI rules, the report explains that many of them did not have strong attachments to the labour force in the first place.
“Generally, if you were not part of the labour force for the last five years, it was very hard to qualify — you needed more hours of qualification. Because of that, young people were disproportionately affected,” said Murrell, who teaches regional economic development and public finance at the Moncton university.
“Under the 1996 changes, new entrants to the workforce needed 900 hours of work to qualify for EI. … More experienced workers needed between 420 hours and 700 hours to qualify for employment insurance benefits.”
Although the report says the percentage of young Canadians receiving EI dropped right across the country, that decline was greatest in the Atlantic provinces — an 18 per cent decrease from 1987 to 1997.
For Newfoundland, the number of people ages 18-29 who were collecting EI was cut in half — to just 27 per cent from 53 per cent.
It’s a trend that has continued.
In 1999, there was a bigger decrease in the number of all employed people receiving EI during the year in the Atlantic Provinces than in the entire country.
A “more robust” economy also helps to explain the departure of young people from employment insurance rolls, said Murrell.
Changes to EI rules first began in 1994, and two years later the entire program was overhauled.
“The 1996 changes were actually quite far-reaching,” said Murrell.
But he doesn’t think four years is enough to keep moving young people away from EI and into higher education and long-term employment. Murrell figures 10-15 years of EI reform is necessary to achieve those goals.