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by workincanada

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"Working-age adults fall through safety net"
(Globe and Mail, Sep 9, 2005)



Working-age adults fall through safety net
By KAREN HOWLETT
Friday, September 9, 2005 Page A5

Canada's social safety net is failing to protect its most vulnerable working-age adults, a legacy of deep cuts to provincial welfare programs and a federal employment insurance system that is out of sync with the labour market, a report concludes.

The report by economists at Toronto-Dominion Bank says income-support programs have eroded steadily in recent years, and those on welfare face significant barriers getting back into the work force -- one of the surest routes out of poverty.

The costs of not bringing all eligible working-age adults into the work force as soon as possible are high and rising, warns the report. This is particularly the case in Ontario, where municipal governments will face a serious financial crunch during the next economic downturn. The pain will be most acute in Toronto, where the number of unemployed receiving jobless benefits is below the national average.

The report, which was prepared for the Task Force on Modernizing Income Security for Working Age Adults, a group comprising civic leaders from many sectors, raises major policy questions for federal and provincial governments.

"We don't have anything in the safety net other than welfare, which is why there's nothing else to catch them on the way down, so they end up on the welfare rolls -- which is inappropriate," said Don Drummond, chief economist at TD Bank and co-author of the report.

While Canada's wealthiest individuals have seen their incomes rise steadily in recent years, lower-income earners have seen theirs stagnate, said David Pecaut, co-chair of the task force.

"I think all Canadians would like to feel if someone's working full time, they ought to be able to lift their family out of poverty," he said. "That is a serious social issue for the country."

The report identifies problems with the unemployment benefit program administered by the federal government and provincial welfare programs.

Fewer and fewer Canadians are eligible for employment insurance benefits when they lose their jobs because the system has not kept pace with changes in the labour market, the report says.

The EI system was developed back in the 1960s, an era when most workers typically had full-time jobs with employers that provided benefits. Workers who became unemployed would qualify for EI benefits after a certain waiting period.

Since then, however, the labour market has gone through dramatic change, with the addition of many self-employed workers or immigrants who have no work experience in Canada. Both groups are not eligible for EI benefits in the event they lose their jobs. As a result, many have no recourse but to go on welfare.

Many provinces responded to the added pressure on their welfare systems by raising the entry barrier and cutting benefits. Those who manage to go on welfare become caught in a low-income trap, the report says. They have little financial incentive to get off social assistance, because they lose non-cash benefits that their employment earnings are not sufficient to cover.

Even though the welfare payment has been reduced, remaining on assistance is still a better deal than working in a minimum-wage service-industry job with no dental or extended health-care benefits, Mr. Drummond said. "The harsh reality is in many instances they're actually better off on welfare."

By way of example, the report singles out the aggressive welfare changes introduced in Ontario in 1995 by the Progressive Conservatives under former premier Mike Harris. The government slashed benefits by 22 per cent and introduced workfare, a program designed to nudge individuals off welfare and back into the work force.

Benefit rates for a single parent with one child under 12 fell to $957 a month from $1,221 and the welfare rolls declined by nearly 60 per cent over the past decade.

But where the program failed utterly was in getting people back to work, the report says. The number of welfare cases declined after 1995 -- to 198,000 in June this year from 450,000 in 1995. But that was because fewer people qualified for benefits under the new rules rather than an exodus of welfare recipients into the work force, the report says.

Elizabeth Pigott, president of St. Christopher House in Toronto, which provides a wide range of services to the working poor and those on social assistance, sees first hand just how much these people are struggling. Many of those on welfare can't afford to get off, she said. And those who are working full time for minimum wage, have to go to food banks to make ends meet.

"There's a constant treadmill," she said. "There's not a sense of being able to actually get up enough traction to move off welfare."
[PR]
by workincanada | 2005-09-11 09:46 | 移住後の暮らしを考える