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The deterrent effect of the PCU is found to be more grand than it seems

by magictr
July 25, 2020
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L’effet dissuasif de la PCU se révèle plus grand qu’il n’y paraît

Photo: Valérian Mazataud The Duty
This deterrent effect on the return to work is likely to be even more pronounced for part-time workers, for which the PCU is equivalent to 142% of the average wage.

The emergency financial assistance provided to workers has a deterrent effect on the return to work of young people and women stronger than it looks, according to a study. Delivery canadian emergency (PCU) currently offered by Ottawa compensates almost completely, and sometimes more, the average salary of full-time workers of the sectors most affected by the pandemic of sars coronavirus and the policies of the containment of governments, notes the National Bank, in an analysis released on Friday. The replacement rate is even higher for part-time workers, with average benefits equivalent to one and a half times the average wage in all sectors of the economy and the double for the sectors most affected by the crisis.

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Thus, the near $ 500 per week ($2000 per month) offered by the PCU equivalent to one-half (49 %) of the average weekly pay for all industries in Canada, but to four fifths of wages paid in the sectors particularly affected by the crisis in the retail trade (81 %) and arts, entertainment and recreation (80 %). This replacement rate even reached 119 % in services, and accommodation and food that have also been hit. In the latter case, we may “think that a worker at the average income of this sector would have an incentive to stay unemployed until the end of the programme,” note the authors of the study.

This deterrent effect on the return to work is likely to be even more pronounced for part-time workers, for which the PCU is equivalent to 142 % of the average wage in all industries, but at double of what we touch in the agriculture sector (190 %), information, culture and recreation (193 %), retail trade (194 %) and accommodation services and catering (197 %).

This is an important factor, because the proportion of part-time workers in the retail trade (28 %), information, culture and recreation (29 %) and accommodation and food services (43 %) is just higher than the average of canadian industries (19 %).

Young people and women

Young people, women and, to a lesser extent, older people appear more vulnerable than others to this phenomenon, is suing the National Bank. In fact, half (49 %) of workers aged 15 to 24 years employed part-time, while the proportion is two times higher for women overall (26 %) than for men (13 %) and that it is also double for workers aged 55 to 69 years (20 %) compared to those aged 25 to 54 year olds (11 %).

These data provide new arguments to the companies, politicians and experts who blame the PCU to halt the return to work of Canadians, while the déconfinement of the economy is underway.

In its analysis, the National Bank does not question the need, during the crisis, to put in place such emergency assistance. She also admits that if the unemployment of young people and women is still high compared to that of other workers, it is probably because some were over-represented in the economic sectors most affected and that the others have, in addition, surely assumed more than their share of the effects of the closure of schools and childcare services.

As the PCU in its current form should stop at the end of the month of August and as it is a question, in Ottawa, that it is followed by another version, more targeted, the coming months may help to see more clearly on the real dissuasive effect she could have on the return to work of its providers.

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