An Employment Insurance system for the 21st century: Lesson 2, The future of work calls for better income insurance

The COVID pandemic has fast-forwarded many changes in the way employers manage, monitor, and motivate their employees. The future of work is here and will involve more insecurity for many workers. The Canadian federal government can offer better and more appropriate income insurance by responding with both quick and easy, and with more fundamental changes to the Employment Insurance program.

 

The 2020 Speech from the Throne boldly claims that “This pandemic has shown that Canada needs an [Employment Insurance] system for the 21st century, including for the self-employed and those in the gig economy.” That is a tall order, a major overhaul of a complicated program in the span of the next couple of months, with little or virtually no consultation of stakeholders or engagement of experts outside of the government.

Will Minister Qualtrough, her cabinet colleagues, and of course the Prime Minister, get it right?

After all the need for EI reform has long been recognized, with lessons learned well before the onset of COVID19, but always politically convenient to put off. What does the 21st century hold for us?

Well, we’ve seen a good deal during its first 20 years, and some big lessons are pretty clear.

I draw three lessons, and these should be used to judge what the government has in store. You can read about the first here: Big shocks matter and need a response in real time.  This post discusses the second and the reforms it calls for: Lesson 2 is “The future of work has arrived and needs better income insurance for all.”

 

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Three enhancements to Employment Insurance to reduce income inequality, promote income security, and support families

Social policy in Canada faces three challenges having to do with income inequality, income insecurity, and the imbalance between work and family life. My presentation at the Queen’s University conference, “Social Canada Revisited,” begins by outlining three facts that illustrate these challenges:

  1. The share of total market income going to bottom-income Canadians has fallen
  2. Workers with steady employment suffer significant and long-lasting income losses after a layoff
  3. Families have changed to help cushion and support middle incomes, but the family-work balance is titled

I suggest that there are precedents in the existing Employment Insurance program that can be enhanced and built upon to more fully offer Canadians the social insurance they need and want, and put forward three enhancements that will move social policy in this direction.

  1. Enhance Working While on Claim and integrate it seamlessly with the Working Income Tax Benefit to offer steady and increased income support to lower-income Canadians in a way that mimics some versions of a Basic Income
  2. Introduce wage insurance that would top up weekly earnings for workers with a steady employment history who have suffered a permanent layoff
  3. Expand so-called “Special Benefits” by creating individual accounts over which individuals have complete sovereignty

Download a copy of my presentation for the details.

Why Canada should foster a ‘second-chance’ society

[This is the unabridged version of an article published in the Globe and Mail on February 22nd, 2016.]

Canadians should be thumping their chests, after all many others are patting us on the back. When it comes to social mobility we are among the world leaders. Even U.S. President Obama acknowledged that a poor child is more likely to move up in life in Canada than in the United States.

This kind of mobility, the capacity for children to become all that they can be without regard to their starting point in life, is the bedrock of fairness.

For sure this distinct Canadian accomplishment of making the American Dream more of a reality north of the border was never without its imperfections, ringing rather hollow for many native communities, some immigrant groups, and certain visible minorities. Great accomplishments on average never reveal the full diversity of experience.

But just as importantly winning the social mobility sweepstakes is something for the record books, not a guarantee for the future. The foundations of fairness are shifting; luck will matter more, meritocracy will be perverted by growing inequality, and our public policies haven’t really changed to prepare for the new reality that is already pressing on young people.

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Families need insurance for wages and for family responsibilities

[ This post is a summary of a presentation called “Public insurance to promote social mobility” that I made to the “Social Mobility Summit” held at the Brookings Institution in Washington DC on January 13th, 2014. It is intended for an American readership, and is also posted in an abridged form on the Brookings website. ]

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