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Is some form of intervention required in order to address the issue of long-term joblessness?

I read an interesting article that was quite discouraging. Unfortunately, it has been found that more Canadians are remaining jobless for longer periods of time. We are not just talking about workers in the manufacturing sector here; apparently, significant numbers of Canadians have lost their jobs and are experiencing long-term unemployment in areas such as accounting, executive work and education. Also, employment of factory workers is at a 30-year low.

unemployment in Canada

What’s more, the average number of weeks of unemployment rose to a decade-high of 21.4 weeks, and the number of workers that have been jobless for at least 12 months has increased by 33 percent in the past year. Furthermore, 300,000 of Canada’s 1.5 million jobless workers have now been out of a job for 27 weeks or longer; this is double the amount compared to before the recession.

Some neo-classicist economists may argue that the economy will work itself out eventually.

But for a person who has been out of work for almost a year, this strategy of relying solely on market forces to rectify the situation might seem weak.

What are the consequences of this kind of finding? The longer unemployment continues, the following things can happen:

  • The more likely workers will lose the skills required to work in their industry. As their skills and job experience atrophy, they experience more difficulty in securing a new position. This is especially the case in rapid-paced industries such as technology.
  • The more psychological and physical consequences can arise. Unemployment negatively affects confidence, self-esteem, motivation and physical health as a result of the triggering of stress hormones.
  • The joblessness persists beyond Employment Insurance benefit periods, causing financial difficulties for workers who must tap into long-term savings or accumulate debt to make ends meet.
  • The economy suffers since workers are not re-entering the market but are instead seeking social assistance.
  • Many older workers become displaced and decide to give up looking for jobs.
  • The more workers turn to minimum wage or temporary jobs.

Clearly, there is a human cost involved with longer periods of unemployment. Since many employers are not yet willing to take on additional employees during this period of slow economic recovery, something else must be done. Surely, Canadians want to do more than simply rely on market forces to fix this situation. But what can it be?

Should the government increase the benefit period for workers who qualify for Employment Insurance?

Should Employment Insurance include a mandatory training requirement so workers can remain relevant in their field or become trained in another field that is in demand?

Should insurance companies offer “wage insurance” that provides benefits for people who remain unemployed after the Employment Insurance benefit period?

What do you think? Should there be some type of intervention to support workers who cannot find a job? Does society have a responsibility to provide assistance for new training? What might work?

Christina Catenacci
First Reference Human Resources and Compliance Editor

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Christina Catenacci

Christina Catenacci, BA, LLB, LLM, was called to the Ontario Bar in 2002 and has since been a member of the Ontario Bar Association. Christina worked as an editor with First Reference between February 2005 and August 2015, working on publications including The Human Resources Advisor (Ontario, Western and Atlantic editions), HRinfodesk discussing topics in Labour and Employment Law. Christina has decided to pursue a PhD at the University of Western Ontario beginning in the fall of 2015. Read more
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