TORONTO—Canada’s Employment Insurance (EI) program is failing to support low-wage and precariously-employed workers, who have considerably less access to benefits than workers with higher wages, according to a new Canadian Centre for Policy Alternatives (CCPA) report.
The study finds that lower-wage workers make substantial EI contributions in relation to their earnings, but are much less likely to benefit from the program, which was originally created to assist the very low-wage workers it now fails to protect. More than half of low-wage workers are employed in industries characterized by the highest rates of part-time work, shortest job tenure averages and lowest union density—all attributes that make EI more inaccessible for workers.
“There is a mismatch between EI eligibility rules and the realities of low-wage work,” says report author Ricardo Tranjan, senior researcher in the CCPA’s Ontario office. “Low-wage workers are making significant contributions to the EI program and the economy, but are largely on their own when hardship strikes.”
Among the study’s findings:
While 42 per cent of all unemployed workers qualified for EI in 2017, just 28 per cent of workers earning $15 or less per hour were eligible for benefits;
Lower-income workers contributed 1.8 per cent of their employment income to EI (in 2015, most recent data available), while higher-income earners contributed 1.1 per cent;
Gender equality is an important consideration: women make up 59 per cent of low-wage workers. Sixteen per cent of low-wage mothers who contributed to the EI program in the past two years didn’t quality for maternity or parental benefits, a rate 10 percentage points higher than mothers earning more than $15/hour.
The report recommends several changes to EI eligibility rules that would improve coverage for low-wage workers: replacing the variable entrance requirement to a universal 420 hours threshold; changing eligibility requirements to include voluntary job leavers; and implementing an earnings-based eligibility requirement for low-wage workers, similar to the program for fishing industry workers.
“A reformed EI program could play a crucial role in building an inclusive economy, where all workers and families are shielded from extreme economic hardship,” adds Tranjan. “It’s time to move beyond the narrow insurance logic that informs eligibility for most EI benefits.”
Towards an Inclusive Economy: Syncing EI to the reality of low-wage work will be available for download on the CCPA’s website. For more information, please contact Alyssa O’Dell, CCPA Media and Public Relations Officer, at [email protected], 613-563-1341 x307 or cell 343-998-7575
The Canadian Centre for Policy Alternatives is an independent, non-profit charitable research institute founded in 1980.