What happens when CERB runs out?

That’s a question that is on many people’s minds these days. CERB has been a godsend for people who lost employment or were unemployed at the start of this pandemic. According to some employers as we reopen our economy, it is the bane of their existence. It is scheduled to expire at in the fall, however there is some debate on whether or not to extend it or make it permanent. The fact is that reality is not keeping pace with the government’s plans.

The reopening is clearly not the same as flicking an on switch. It is taking time for jobs to return to Canada. Of the jobs that have been recovered, it appears that the majority of them are in the retail and restaurant industries. And even still those industries are not back to full capacity. As the economy reopens, businesses are re-evaluating their structures and how best to operate in a COVID-19 world. This has lead to some economists to look and say that major changes to the workplace are coming. As businesses look to restructure themselves to be more efficient, some jobs may become redundant and unnecessary.

Which brings us to the argument we are hearing against CERB. The claim that it’s prohibiting companies from hiring as people are not willing to return to work for less or the same as what CERB provides. It’s a sound argument. If someone’s labour is that necessary, then you’ll have to compete for it. However, I don’t think that’s entirely the story. Based on the above information, it’s clear the economy is undergoing a fundamental change. As businesses move to embrace working from home, companies are able to cast their nets wider on rehiring. The competitive edge someone had in say living close to the company they applied to, isn’t there any more. Coupled with some jobs not returned as companies cut out redundancies, employees may find themselves unemployed for factors outside of their control.

All of this leads to a situation that works against the labour force. As millions of people compete on a global scale for jobs, it brings down their competitive advantage. Working from home means not necessarily having to pay you more. As well as being able to have applicants compete for lower wages and salaries in order to be more viable for a position. All of this leads to a situation that in my opinion is bad for the economy. Greater wealth inequality, as well as lower tax revenues to governments now trying to figure out how to pay off massive debts.

All of which, leads to the idea of implementing a Universal Basic Income or UBI. As suggested by some Senators, it could provide a stabilizing force as our economy works to rebuild itself. Giving Canadians some leverage in returning to work. It would help to maintain standards of living and ease of mind. Change is going to be a word we are going to hear a lot of in the coming months. It is inevitable and unpredictable. A UBI would be a solid economic tool to ensure people are not left behind.

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