Thursday, 15 July 2010

US Unemployed Get 26 Weeks of Insurance While Canadians Get up to 50: One Part of the Stimulus Package That Makes a Difference

Nothing like visitors from the US for serious conversations about what's happening economically: Lee and my cousin's husband spent a lot of time thrashing out the problems during their visit here. I, however, didn't have much time to think about things other than having fun, so this morning's story in Le Devoir about the problems facing the US economy hit me full in the face. (The dispatch is from Agence France Presse, and I haven't been able to find it in an English paper which is a shame.)

In short, the story says the stagnating US economy is making Ben Bernacke and others consider advising more stimulus money. Unemployment was down slightly in June to 9.5 per cent, due to the "discouraged worker" effect. That is, there were 125,000 fewer jobs than the month previously, but there also were fewer people looking for work so, largely because they've given up.

Two weeks ago Nobel Laureat Paul Krugman called for continued stimulus in order to forestall the Third Depression. He commented last week as Americans were celebrating Independence Day on the criminal way US legislators decided to "punish the unemployed" by not agreeing to extend the period of unemployment insurance eligibility before they went on summer vacation. The average length of unemployment in the US is now 35 weeks, but benefits run out after 26 weeks. Can you imagine what that means for the families involved--and also for the families working produce the goods and services consumed by their fellow citizens.

By way of contrast, consider the Canadian case: our June unemployment rate was down to 7.9 per cent, below 8 per cent for the first time since January 2009. This is all the more striking because over the last three decades Canada's unemployment rate has been consistently higher than that of the US, for reasons that are unclear. What is clear that when Stephen Harper's feet were held to the fire, a stimulus package was passed in March 2009 which worked better than the one in the US. This included an extension of the length of employment insurance eligibility from 45 to 50 weeks, among other things.

I'd like to think the APF story is right, that Krugman's words and the bad news about what is happening has gotten through to Bernacke at the Fed and others who call the shots in the US. We'll be watching closely in the next few days. The take home lesson: people can't buy things when they don't have money.


lagatta à montréal said...

Only problem here is that the percentage of workers eligible for Unemployment Benefits (or so-called "EI") has fallen dramatically with respect to decades past, both due to cuts in the programme and in the number of "atypical" workers.

Mary Soderstrom said...

It's true that self-employed workers are frequently not covered (you have to opt in and deduct etc.) and their number has grown as companies downsized and out-sourced, but EI still is considerably more generous here than in the US.

And it's also important to remember that unemployment figures are determined through surveys independent of the numbers of people receiving EI. This method picks up people who are looking for work but who arent' covered by IF.

By the way, Maria, I caught your intervention on Radio Noon about Pamela Anderson and PETA. Good points: I agree that PETA's concerns are frequently valid, but there are a bunch of showboats involved.

lagatta à montréal said...

A google search for "offensive" or "obnoxious" PETA campaigns is a minefield, because the first hits are rightwing "consumer freedom" groups and fratboy types who think torturing non-human animals is a hoot. I did turn up by a vegan who can’t abide their exploitation of women and other victims of discrimination. And féministe blog :

There is quite a bit about PETA’s exploitative tactics on progressive Canadian boards such as rabble/babble and breadnroses. PETA has handed out trading cards to children about the evils of milk. These cards depicted supposedly milk-drinking children with conditions such as acne, obesity, flatulence and excess phlegm – the kind of problems children are cruelly mocked for on playgrounds.

Yes, I know workers in the US have less unemployment protection still, but very few freelancers can afford to incorporate and pay employer and employee benefit shares, and those who can prefer to invest their take elsewhere.