(TORONTO, ON) -In today’s economy, unemployment is a painful reality for many Canadians. But it gets worse – as if to salt the wounds, the percentage of Canadians receiving employment insurance is at an all-time low, and people in Hamilton are feeling the sting.
Recent numbers released from the Broadbent Institute show that Hamilton has seen the biggest drop in unemployed workers receiving EI – from 40.1 per cent in 1997 to 21.6 per cent in 2014. And other Canadian cities aren’t faring much better:
Percentage of unemployed workers receiving Employment Insurance (by city)
|Moncton, New Brunswick||76.7%||59.4%||-17.1%|
|QuÃ©bec City, Quebec||53.3%||37.0%||-16.3%|
|National average||42% (1998)||36.6%||-5.4%|
The drops are related to a tightening of government restrictions, making it harder and harder for unemployed Canadians to receive EI benefits. In 1990, the majority (83 per cent) of job-seekers were eligible for EI. That number sank to 42 per cent in 1998, and the trend continued to an all-time low of 36.6 per cent in 2014. Currently, unemployed Canadians are required to accept any job the government deems suitable – even if it is unrelated to their career and includes a 30 per cent pay cut and an hour-long commute.
Jeff Schwartz, Executive Director of Consolidated Credit Counseling Services of Canada, warns that Hamiltonians must proactively protect themselves against the “double whammy” of joblessness and increasingly difficult EI requirements.
“People need to be financially prepared for unemployment – job security is unpredictable,” says Schwartz. “But now it’s clear that even their EI benefits are unpredictable as well, meaning Hamiltonians need to be extra diligent with their savings.”
Consolidated Credit offers the following tips to people who would like to brace themselves in the event of unexpected periods of unemployment:
- Rainy-day savings – Try to direct at least five per cent of your income to a savings account every month. You will want to build up an “emergency fund” equaling three to six months of living expenses to help you avoid building up debt during this time.
- Don’t live on the edge – Just because you are making money and feel like you can live large today, doesn’t mean you should. A sudden reduction in income is often outside of your control. Focusing on your long-term financial health means you won’t be hung out to dry in the event of sudden job-loss or income reduction.
- Take a look at your options – If you are laid off, it’s worth finding out whether or not you are entitled to EI regardless of tougher requirements. As well, find out what other sources of income you may be entitled to including severance, unpaid overtime and unpaid vacation.
- Re-tool the budget – Budgeting is tough in the best of circumstances and worse when money is tight. This is a time to seriously consider needs vs wants and you should also assess your ability to keep up with your bills.
- Make contingency plans – While it may be difficult to swallow, consider a back-up plan in case you can’t find a job soon at your old salary. Do you have assets you can sell (an extra car, for example)? Could you downsize your house? Seek professional advice to see how you can maximize your options without too much long-term damage.
“Don’t just live within your means; live well within your means,” says Schwartz. “Living frugally today is the best thing you can do for tomorrow.”
About Consolidated Credit Counseling Services of Canada, Inc.:
Consolidated Credit Counseling Services of Canada is a national non-profit credit counselling organization that teaches consumers about personal finance.
For more information or to request an interview with Jeffrey Schwartz, please contact:
Jacob MacDonald, Public Relations Coordinator, Consolidated Credit Counseling Services of Canada, Inc., T: 416-915-7283 ext.1079/1041, C: 647-390-5253, F: 416-915-5200, E: firstname.lastname@example.org