Vagueness and opportunism

Addressing the European Convention in Brussels last week, Dr Alfred Sant mentioned his desired special relationship with the European Union. He was as vague as ever, but there were subtle though significant differences from the version he dishes out to the party faithful and to domestic audiences.

In Brussels Dr Sant said the "best relationship is a partnership between Malta and the EU. Partnership would be based on free trade and co-operation protocols covering agriculture and social matters, security issues and political co-ordination".

He made no mention of Malta as the `Switzerland of the Mediterranean`. That would have left his audience at a loss. Dr Sant talked about a partnership based on free trade. Not free industrial trade, as he and his party machine are wont to tell Maltese audiences.

He added that there should be what he loosely termed `co-operation protocols` covering among other things agriculture. Since co-operation is a two-way street, Dr Sant may want to elaborate on what he is already prepared to proffer to the EU. His commitment to leave agriculture out of a free trade compact looks even shakier.

Debating the numbers

Ever since the first Labour Force Survey (LFS) came out in 2000, there has been no shortage of opportunists willing to make political capital out of its findings. The LFS is just one manifestation of the upgrade of Malta`s statistical services to EU standards. In fact EU pre-accession funds and expertise contribute greatly to this process. But the contribution of EU programmes hasn`t stopped certain EU-phobes from milking selected numbers for all they`re worth. They unashamedly now level the charge of political interference at those who prefer to use LFS results appropriately.

The traditional measure of unemployment is the long-standing headcount of registrants by the Employment and Training Corporation (ETC). In fact, the ETC has two sources of information. The first is the enumeration of unemployed persons who register with the Corporation. The second is the information that employers are obliged to send in on new hires and terminations. ETC statistics depend for their accuracy on the timeliness of employers, and the ETC`s task is made harder by the need to incorporate tardy information into its statistics.

Like every other tool, the relatively new Labour Force Survey has to be used in a manner that recognises the survey`s strengths as well as its limits. The LFS samples a number of randomly chosen households, which are questioned on the employment, unemployment or inactivity of their members. This allows the LFS to collect information even from those who may be looking for work without registering with the ETC.

While the ETC`s jobless are registered as such, the LFS`s jobless are self-declared. In addition, the LFS provides a wealth of data on inactive persons, who are not working and are not looking for work. These data are beyond the reach of the ETC count of registrants.

Unlike a headcount, the LFS`s sampling method collects information from a relatively small number of respondents and from the results it infers traits of the entire population. In common with all sampling methods, the final results are subject to a margin of error that can be estimated.

Perforce, the results differ between the two systems, just as they differ in every country where the two methods coexist. But in Malta certain opportunists directly compare ETC numbers with LFS results without taking into account the different methodologies. They do so on the assumption that the general public can be duped into concluding that if the recent LFS numbers are higher than the old ETC numbers, then unemployment must have risen dramatically. There is also a crude suggestion that since the ETC numbers are below the LFS`s, then the ETC`s figures must be less than legitimate.

The two sources of information diverge not just in method of collecting information but also in their definition of unemployment and employment. As I have already mentioned, one tracks registered unemployment, while the other includes all self-declared unemployed. Another definitional difference is in the sectoral detail, where the LFS makes no distinction between full-timers and part-timers while the ETC numbers count only full-timers.

The LFS is an excellent tool of statistical measurement, but users should be aware of its definitions and method. In any case, data should always be evaluated in their totality. In fact, there is more to Malta`s employment data banks than just the ETC numbers and the LFS. For its Business Register, the NSO itself gathers additional employment data from a large sample of manufacturing firms that account for some two-thirds of all employment in the sector.

Selective critics

What was the impact on employment of last year`s international slowdown, particularly as it hit our exports of manufactured goods and tourist services? One can start with the aggregate results. The LFS reported that the number of unemployed was practically unchanged, rising by 13 from 10,151 in December 2000 to 10,164 a year later. The ETC tally of unemployed registrants was up by 245 from 7,188 to 7,433. While the ETC`s unemployment rate edged up from 5 per cent to 5.1 per cent of the labour force, the LFS`s was unchanged at 6.5 per cent.

What about employment, specifically the number of full-timers? The ETC reported an increase of 668 during 2001, while the LFS reported a rise of 591. Certain critics were very picky in their selection of LFS results. They ignored the stability of the number of unemployed during a year when the international environment was less than helpful, and they could not be bothered with sectoral detail other than manufacturing.

In the disaggregated data, the differences between the two sources are more substantial, at least in part because the ETC reports only on full-timers, while the LFS`s sectoral data includes both full- and part-timers. Certain critics pounced on the drop of 2,317 in the number of manufacturing jobs reported in the LFS. They failed to tell their audience that the LFS also indicated that hotel employment had risen by 1,808, in a year when the industry was shaken by the events of September 11 and by the resulting drop in tourist travel.

The LFS reported an increase of 1,837 jobs in transportation, 643 in agriculture and fisheries, and 1,206 in construction. According to the LFS, total private sector employment rose by 1,836, only partly offset by shrinkage of 1,452 in public sector jobs.

The ETC reported more moderate changes. Public sector jobs were up by 425 over the 12 months. This number is explained by the switch of impressed government drivers from a self-employed status to public sector full-timers.

Although private sector jobs in 2001 are shown to have increased by a net 311, one must keep in mind that the switch of 466 impressed drivers during the year means that this category was still included in the private sector figures of 2000. If one isolates this definitional change, overall private sector jobs increased by a respectable 777 jobs in the 2001.

According to the ETC, jobs in wholesale and retail businesses fell by 299. The explanation is the closure of a retail chain earlier in 2001, and in fact the last quarter of the year saw employment in this sector rise by 207.

Over 2001, employment in the construction and quarrying sector was up by 204. In the last three months of the year alone, jobs in this sector increased by 181. Hotels and catering establishments reduced their employment by 178, while manufacturing employment was up by 173 between December 2000 and December 2001.

Business Register data provides additional evidence of a stable employment situation in manufacturing, despite the drop in international demand for key exports. The large sample of manufacturers reported employment at 22,004 in December 2001, up marginally from 21,913 a year earlier, certainly a far cry from what Labour commentators seem eager to blindly conclude!

Frankly, Labour seems so paranoid in trying to get its doom and gloom scenario across that quite often all sense of proper and informed assessment is thrown out of the window. The question is: Isn`t this the same trait as shown in 1997 when through some rushed calculations, Labour went ahead with unwarranted increases in water and electricity tariffs, which plunged the whole industrial and consumer sectors in crisis? Clearly, after three and a half years in Opposition, Dr Sant`s Labour party is still suffering from acute attacks of unreasonableness and ill-judgment!