Robert Silver

# A simpleton tries to tackle EI Add to ...

Two assertions from this helpful primer on EI reform seem to a simpleton like me to be contradictory:

On the one hand, this is a really, really expensive policy proposal ("They peg the total cost of the change at around \$1.5-billion"), on the other hand, standardizing and lowering the eligibility threshold for EI won't really help many people ( "I really don't see who is supposed to benefit from [lowering the eligibility requirements].. there just aren't that many people right now who got hired a few months ago-December and January were horrible in the labour market-and who've lost their jobs").

If the average EI recipient receives about \$340 per week then \$1.5-billion represent 4,411,764 person/weeks of payments.

The Macleans' piece makes the following statement:

"The longest period of time for which a person can receive benefits after working the minimum number of hours is 37 weeks-and even then, they would have to live in an area with an unemployment rate over 16 per cent. Someone who worked the minimum number of hours in a place like Ottawa would get a comparably meagre 19 weeks' worth of benefits."

Let's split the difference and presume that the average person affected by this policy change receives 28 weeks of benefits. That means, based on the 4,411,764 person/week math above, that 157,563 people would need to collect the average amount for the average length of time for the overall cost of the change to come in at \$1.5-billion.

If the number of people collecting goes down, so does the cost of the program.

On the other hand, if there are 157,563 people who end up benefiting from the change (because they qualify in every other way under the current EI rules other than the number of hours worked in the last 52 weeks) then doesn't that prove the "need" for this change?

In other words, if there really aren't "that many people" who will benefit from this change then the cost should be relatively low, little damage done to consolidated revenue. If on the other hand, the cost is high, that demonstrates that there is the demand for the change.

Or maybe I'm missing something.

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