(The following article is from the February 15-28, 2009, issue of People's Voice, Canada's leading communist newspaper. Articles can be reprinted free if the source is credited. Subscription rates in Canada: $25/year, or $12 low income rate; for U.S. readers - $25 US per year; other overseas readers - $25 US or $35 CDN per year. Send to: People's Voice, c/o PV Business Manager, 133 Herkimer St., Unit 502, Hamilton, ON, L8P 2H3.)

By Kimball Cariou

     As working people face a deep economic crisis, demands are growing for major improvements to the EI system. For many years, right-wing media and politicians have spread the idea that employment insurance is an "easy ride" for jobless workers, a "gift" from "tax and spend governments," a taxpayer-funded program which encourages "laziness" instead of faithful obedience to employers. Unfortunately, there have also been arguments from some on the Left that unemployment insurance should be understood primarily as a ruling class measure to dampen popular struggles.

     The truth is far different, but we need to recall the history of the working class movement to refute these ideas.

     Almost all major capitalist countries adopted jobless insurance plans in the early 20th century. The details vary from country to country, but such plans reflect the reality that capitalism can never provide full employment. Employers actually need a large "reserve army of the unemployed" to depress wages and to limit the ability of workers to organize into a powerful trade union movement.

     In fact, capitalism itself actually generates unemployment. In a nutshell, each competing capitalist (or corporation) strives to maximize profits by reducing labour costs per unit. This can be done by driving down wages, busting unions, lengthening the work day, speeding up production, or investing in new labour-saving technologies. The latter tactic reduces the workforce, driving workers into unemployment. Capitalists who reap relatively larger profits take advantage of their upper hand to keep increasing capital investments, further reducing labour costs. Those who fail to keep up with the competition are driven out of business, throwing more workers into the "reserve army."

     In other words, unemployment is not the result of "imperfections" - it is a permanent, built-in feature of our economic system.

     Unfortunately for the bosses, jobless workers refuse to simply lay down and quietly die of hunger. Using a wide range of tactics - mass demonstrations, strikes, elections - workers have always pressed for a shorter working day, better wages, the right to organize, unemployment insurance, and job creation plans, among other measures.

     This fightback during the 1930s was the most critical such struggle in Canadian working class history. As the Great Depression worsened, unemployment in Canada hit an estimated one-fifth of the workforce. The response of the Conservative government of R.B. "Iron Heel" Bennett was to force thousands of single jobless men into isolated work camps. Paid just twenty cents a day in these "slave camps," the workers formed the Relief Camp Workers' Union, affiliated to the Communist-led Workers' Unity League. Their movement took inspiration from the Soviet Union, where capitalist exploitation had been abolished, and far-reaching social advances were being achieved by workers.

     In the spring of 1935, RCWU members gathered in Vancouver, where residents responded with generous support and huge solidarity rallies. The workers decided to take their struggle for "work and wages" - jobs and a living income - directly to the federal government. On June 3, hundreds climbed onto freight trains to begin the famous "On to Ottawa Trek." The Trekkers gained in numbers and support as they headed east, terrifying the Bennett Tories and the entire ruling class, which feared a socialist revolution in Canada. The Trek was crushed by a brutal police attack in Regina on July 1, 1935, although unemployed workers in Ontario did carry on to Ottawa.

     "Iron Heel" Bennett was defeated later that year, and the Liberal government of Mackenzie King was finally compelled by working class pressure to introduce unemployment insurance in 1940; Canada was the last major Western country to adopt a UI system.

     Since then, the terms of UI have been the subject of a constant battle between the labour movement and the bosses, fought in Parliament and in the extra-parliamentary arena. For many years, workers needed 10 weeks of employment to be eligible for 42 weeks of UI. After changes adopted in 1971, over 80 percent of jobless Canadians were eligible for benefits. Maternity and sickness benefits lasting 15 weeks were also won that year.

     But the demands of employers gained increasing strength throughout the 1970s and '80s, as the agenda of "neoliberal" attacks on the working class took hold. The federal government reduced and then eliminated its financial contribution to UI by 1990. The Mulroney Tories slashed the program, followed by further cuts under the Chretien Liberals and Finance Minister Paul Martin in 1994 and 1996, when it was renamed Employment Insurance. Amendments increased the working time needed to qualify, and benefit rates were reduced to the present miserable 55% of former earnings. Today, only about one-third of jobless workers qualify for EI benefits, and much less in many areas.

     The decline of expenditures resulted in a growing surplus in the EI fund after 1994. The cumulative surplus stood at $54 billion by 2007, while hundreds of thousands of workers are unable to receive benefits.

     By rejecting the demand of the labour movement for improved EI access and benefits, PM Harper takes the same position as "Iron Heel" Bennett over seventy years ago. As always, the Conservative Party stands with the bosses, who use hunger and poverty as a lash to whip the working class into submission during a time of economic crisis. We need to fight back by mobilizing a new and powerful mass movement, demanding jobs and adequate incomes for all, including Employment Insurance at 90% of previous earnings for the full duration of unemployment.