Thoughts on the labour market - employment

Last week's contribution focused on developments on the labour market with particular reference to unemployment aspects, as evidenced through a range of data published by the National Statistics Office. This week's contribution focuses on employment aspects.

Obviously, they are the two sides of the same coin - unemployment being the negative aspect and employment (job creation) being the positive aspect. From the perspective of unemployment, one is noting a fall in those actively seeking gainful employment; but there are pockets in the population that are likely to experience unemployment to a greater extent than the rest.

The latest Labour Force Survey immediately shows some interesting developments.

The number of persons aged over 15 years increased by over 1,000 between the first quarter of 2004 and the first quarter of this year. This mirrors the drop in unemployment. However, whereas the number of males in employment decreased by just under 1,300, the number of females in employment increased by over 2,300.

Again, this is consistent with the trend that has been noticeable for the last few years. The participation of women in the labour force continues to increase, with 2,500 more females in the space of one year. The employment rate among females (that is the number of females in employment as a percentage of the total number of females aged 15 to 64 years) has increased from 32.8 to 34.5 per cent.

However, the number of males in the labour force is decreasing, probably as a result of voluntary redundancy schemes in public sector organisations. This possible development is corroborated by the fact that the drop in the number of employed males was more pronounced among those aged 45 to 54 years. The employment rate among males decreased over a 12- month period from 75.7 to 74.5 per cent.

The Labour Force Survey also evidences the fact that the increase in employment has essentially been in the area of part-time employment, while the number of persons in full-time employment dropped marginally. The Labour Force Survey is based on a sample, while the statistics sourced from the Employment and Training Corporation is based on administrative data on full-time gainfully occupied persons.

According to the ETC, the number of gainfully occupied persons increased by just over 350 persons during the 12 months ending in December 2004. The number of males in full-time employment remained fairly static while the number of females in full-time employment increased.

Data is also provided by the NSO on developments in employment in various segments of the economy. This is provided either in the form of indices or in the form of number of persons employed.

These developments provide essentially an insight into short-term trends in the economy. In fact, the short-term monthly indicators published for the month of April this year show that the employment index for what the NSO terms as the Main Industrial Groupings increased marginally over March 2005, but increased by 3.4 per cent over April 2004.

The wholesale and retail trade and other services indicators show that the employment index in the transport and telecommunication segments registered a drop in the first quarter of this year compared to the first quarter of last year. The same happened in the wholesale trade and in the segment covering computer and related activities.

The employment index in the retail trade, hotels and restaurants, the motor trade and other business activities registered an increase. Looking at the manufacturing sector, one notes a marginal drop in employment at the end of March 2005 when compared to the end of March 2004. However, most segments maintained a fairly static position during these 12 months and it is only in the food and beverages segment that there was a noticeable drop that impacted on the total figure.

Another piece of information about employment that could be derived from NSO data was about temporary contracts. Of those that were in employment in December 2004, 3.6 per cent held a temporary work contract. This compares to 3.9 per cent in 2002 and 3.2 per cent in 2003.

Temporary contracts are more likely to be available in the services sector, are more likely to be related to part time jobs and are more likely to be found among single persons and females. In terms of age, 32 per cent of persons in employment are aged less than 30, 60 per cent are aged 30 to 55 and the remaining eight per cent are aged over 55. There has not been much of a change compared to a year earlier.

What is significant is that females are present in the labour market to a greater extent among persons aged less than 30. Moreover, persons aged less than 30 are more likely to be employed in the manufacturing sector, in the wholesale and retail sector and in the hotels and restaurants sector. Altogether these three sectors make up 54 per cent of employed persons aged less than 30 compared to just 38 per cent of employed persons aged 30 to 55.

What does this brief assessment say about the developments in the labour market? It is very evident that overall the economy is still very capable at creating jobs, irrespective of talk about the recession or otherwise. And, as a former Prime Minister once said, the critical objective for our economy is to keep on creating jobs.

It is also evident that the economic restructuring has now got in gear and therefore certain segments of the economy, although remaining in existence, shall not create new jobs.

There is also an evident gender disparity which is closing, even if not as fast some would wish. What is important is that the younger, fresh resources now joining the labour market, are diverted to more productive sectors of the economy. And this seems to be happening.

So overall assessment is definitely very positive and it is no mean feat that Malta has managed to continue creating jobs in the private sector at a time when we experienced an international economic slowdown. It is proof once more, as if further proof was ever needed, of the resilience of the Maltese economy.