Saturday, January 12, 2008

The Great Employment Insurance Rip-Off

EI surplus stands at $54 billion while most workers can’t collect from program they paid for.

by J.D. Benjamin

The history and purpose of Employment Insurance is pretty straight forward. After decades of struggle and frequently violent opposition by the government, workers won a major concession - a federal insurance program that would support workers when they were out of work.

Over the last 40 years, the EI program has been gradually clawed back. Starting in 1994 with the Liberals and continuing with the Conservatives, the government turned EI into a scam to rip workers off for $2 billion on average per year. Last year, the government collected $16.8 billion in contributions but only handed out $14.1 billion to jobless workers. Overall, the EI surplus has ballooned to $54 billion.

The government uses two main tactics to keep the money pouring in:

The first is to make sure most workers can not use the program in the first place. 78 percent of workers in Toronto who lose their jobs do not qualify for EI. Temp workers, part timers, anyone who worked less than 665 hours in the previous year can not collect, no matter how much they may have paid into the program. This comes down hardest on the workers who need the program the most - single moms, new immigrants, youth, or other workers who can’t find stable, full time jobs.

The second tactic is to make the program as useless as possible for those few workers that do qualify. The program only covers 55% of previous wages - starvation levels for workers who were low waged to begin with - with an maximum payment of $423 a week.

The first EI payment also takes six weeks to be issued - potentially two rent payments missed, eviction and homelessness. Anyone who access Ontario Works while they wait for EI to kick in will find the money taken off their next EI cheque, usually leaving them with only $30. This puts them right back where they started - having to choose between paying the rent or feeding the kids.

The program does not actually cover workers until they find a new job - once your time limit is up, you’re cut off, even if they have paid more into the system than they have taken out.
So were has all this extra money gone? The additional outrage is that there is no government account with $54 billion dollars in it, just waiting to be used for the benefit of the working class. Instead, the money has been dumped into the federal government’s general revenue, to be spent on whatever the feds want. Chretien and Martin spent it on debt repayment, while Harper spent it on the military and occupying Afghanistan.

In other words, when (not if) the economy goes bust and large numbers of workers get laid off, the money will not be there to keep them from falling into poverty. The money will be sitting in the accounts of the big banks, arms manufacturers, and the corrupt puppet government of Hamid Karzai and his cronies.

With a federal election coming, the politicians are forced to pretend to care about the plight of working people. Liberal Leader Stéphane Dion called poverty in Canada “an immense human tragedy” - ignoring the fact that it was his party’s EI policies that helped increase the poverty level. The Conservatives railed against the surplus while in opposition but did nothing once in power. The NDP has complained, but done nothing to mobilise working people to fight back. All parties need to have their feet held to the fire until workers get an EI that works for them!