Parisa Mahboobi is a Senior Policy Analyst at the CD Howe Institute.
All COVID-related economic recovery measures in Canada are due to expire soon. Employers who are having trouble filling vacancies are hoping that this will bring an influx of people back into the work force, but unfortunately for business owners, the situation is not so simple.
In the early days of the pandemic, the federal government granted the Canada Emergency Response Benefit (Deer) to ensure that a wide range of Canadians affected by the pandemic remain. The government supports such and the Canada Emergency Wage Subsidy (which is set to run through October 23, 2021) sustained many people and businesses.
But the economy is in a different place now. The number of unemployed people in August 2021 was 1.4 million, which was about 420,000 less than in September 2020. During the same period, Canada added more than 850,000 jobs, approaching pre-pandemic employment levels.
Despite still high unemployment, job vacancies increased to more than 700,000 in the second quarter of 2021, up from about 560,000 in the last quarter of 2020. For example, the housing and food service industries – an industry still far from a full recovery – are closely ranked. Many of the remaining unemployed in terms of vacancies are not going back to work. Why?
Several factors can discourage unemployed people from returning to work. For example, the fear of catching COVID-19, economic uncertainty and the possibility of another lockdown. Many want to retrain in another industry.
Another possible factor may relate to the design of income-support programs and access to financial aid that may discourage people from seeking a job or opting for self-employment.
When CERB ended in September, 2020, the federal government temporarily changed the employment insurance (EI) program to expand access. it also launched canada recovery benefits (CRB) for those directly affected by the pandemic but who do not qualify for EI (eg, self-employed people). CERB, EI and CRB all, with varying degrees of severity, encourage people to return to work, even though the last two require recipients to seek employment (either as an employee or self-employed).
A temporary change to the EI introduced a profit floor of $400 per week, and the CRB initially included a fixed-benefit amount similar to the CERB ($500 per week) that was relatively generous to those with low incomes. First CD Howe Institute Publications has warned that higher weekly pay could discourage people from returning to the workforce.
In July, the government slashed CRB benefits $300 per week for new applicants, and the program will end on 23rd October. The current temporary EI change will end on September 25 and have a minimum profit of $300 per week, ending in November. While these changes will prompt some workers to re-enter the job market, they will not by themselves eliminate all the problems employers are having in finding workers.
Going forward, the federal government should boost the pool of available workers by reforming the EI system to encourage recipients to work. The federal government can reform work claims Rules by way of increasing the earning limit and reducing the income gap. This would balance government support for families and increase returns for them to go back to work. Many of our small businesses will return to the workforce.
We also need better support for the unemployed who have been unemployed for the longest time. NS for a long time Individuals are out of the labor market, the harder it is for them to reenter and find a high-paying job.
The number of unemployed people who were out of work for at least six months or more in August 2021 was more than double its pre-pandemic level. More than 62 percent of them (over 245,000 people) were unemployed for at least one year. Many long-time unemployed Canadians will not be able to successfully find jobs after COVID-related recovery measures end.
However, participation in education and training can help increase the chances of re-employmentLong-term unemployed less likely to participate employment program Either because of loss of skill, low educational attainment or high cost of re-skilling. These observations suggest the need for government intervention to improve the motivation, skills and employability of the long-term unemployed. Any support for long-term employment also needs to include mental-health support, as long-term unemployment can also be associated with poor mental health.
Programs to bring Canadians back into the workforce and provide income support until they do so must be designed to make programs more flexible, inclusive and easy to use; Improving work incentives and ensuring a smooth transition to permanent work by the end of the benefit period.
To match job seekers with job opportunities, governments should also provide targeted training support, career counseling, and mental-health programs. These measures will go a long way towards helping the long-term unemployed find jobs and helping employers fill the positions they need to get their business back in full swing.
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