Question

Income Gap Growing In 2009, people in the highest quintile had 24.6 times as much market income as those in the lowest quintile, but after taxes and transfers the people in the highest quintile had 9.1 times as much income as those in the lowest quintile. In 1989, the people in the highest quintile had 7.2 times more income after taxes and transfers than those in the lowest quintile. In 1990, 82.9 percent of the unemployed received unemployment benefits. In 2009, 47.8 percent of the unemployed received unemployment benefits. Source: Conference Board of Canada, July 13, 2011

How have changes in employment insurance changed the income gap between the richest and the poorest Canadians?

Answer 1

The problem of growing inequality continues to fly beneath the radar of Canada's elected governments.How ever the governments have always played an active role in dealing with this issue.

Studies suggest that economic inquality is driven by the rising concentration of wealth at the top.ln 2012,top 10 percentof Canadians accounted for almost half of all wealth while bottom 30 percent of Canadians accounted for less than 1 percent of wealth.certain segments of the Canadian society encounter persistent disadvantages when it comes to opportunities which causes hindrance in the economic growth of the country.

Governments over the decades have tried to tamper with inequality with the introduction of several support programs.Starting in the early 1990s till now Canada's major income support programs underwent substantial reform.Employment insurance was one of them because it was supposed to have great distributive effects. Main changes brought to the employment insurance sector are as follows

*Government has committed new investments to better connect unemployed Canadians with available jobs in their local area.

* The government updated employment insurance regulations to clarify responsibilities of claimants to undertake a reasonable job search for suitable employment while receiving EI (employment insurance) regular or fishing benefits.

*A New permanent Law was introduced to determine the way EI benefits are calculated.

* New working while on pilot project reduces a claimant's benefit by 50% of his or her earnings while on claim, starting with the first dollar earned.

* It is ensured that claimants always benefit from accepting more work and supporting their search for permanent employment.

*New security tribunal was established to ensure a more streamlined, responsive and efficient administrative system.

Consequence of these changes were as follows

*Average weekly benefit rate increased in every province and territory.

*The number of claims established by women saw a radical and substantial increase.

*There was larger increase in claim volume among older workers attributable to the lingering effects of the recession.

*Regular benefits accounted for around 70% of total income benefits paid.

*Due to the family supplement program,low income families with children got additional benefits.

We can conclude that changes in Employment insurance scheme helped to reduce the rich-poor income gap by a very slight margin as many studies proved that low-income families have a higher benefits-recieved-to-contribution ratio than high income families do.