The skills deficit

Since 2001 4,583 persons have lost their jobs in manufacturing in Malta and Gozo. By the end of this year the 850 Denim workers will join them and so their number will go up to 5,433. Apologists for the government have said that the news of more factories closing down should no longer come as a surprise. The Nationalist Party has been talking for years about the need to change our economy from one based on manufacturing to one based on services. After years of talking, government apologists are telling us that Government and the trade unions should be talking about a long-term strategy to adjust and attune our labour supply to the realities of today.

So the solution is more talk. By the time the talking starts and something gets done, today would have long turned into yesterday. The Economist (October 1-7) had an interesting article about manufacturing employment in the advanced economies of countries like the United States, Britain, Japan and Germany. The article concluded: "Factory jobs are becoming scarce. It's nothing to worry about." Deindustrialisation does not mean economic decline, it is another stage of economic development. When a country gets richer a smaller proportion of workers are needed in manufacturing. Most laid-off factory workers find new jobs.

We have nothing to worry about only if our workers find new jobs in other new parts of the economy. It is worrying that while our manufacturing continues to decline, our services sector is growing very slowly. In some services we are losing jobs. Since 2001 we have lost 723 jobs in hotels and restaurants. A total of 3,914 jobs were created in the services sector since 2001: mostly in retail and wholesale (1,224) and real estate (2,573).

Unemployment, for those who really want to work and have to work for a living, is already full of human suffering. Unemployability is much worse; 75% of our unemployed are unemployable. What is to be done with the thousands of persons with hardly any skills at all or with skills that are of little value in today's job market in Malta and Gozo?

Years ago, our unemployed used to migrate to look for jobs in other countries. Today factories migrate to other countries with similar skills found here, but where wages and costs are lower. New investment looking for higher skills will not come here if our people do not have these higher skills. We are in the lose-lose situation of being high cost with low or mismatched skills!

According to the last annual report of the Employment and Training Corporation, in September 4,658 unemployed were looking for a manual job, more than half of them in manufacturing. No new factories will open needing the low and very basic skills that most of these unemployed have.

In September 2,642 unemployed were looking for a non-manual job. In one year the number of unemployed with technical and professional qualifications nearly doubled, from 465 to 870. In September 2004 there were 2,083 persons (25 per cent of the total unemployed) looking for a non-manual job. By September this year the proportion of unemployed looking for non-manual jobs had shot up by 11% to 36% (2,642). So even those who have spent more years in schools and obtained the required qualifications are finding it harder to get a job.

More schooling and education is not enough. We need better schooling and education, as academic qualifications are no guarantee of empowering the individual with the skills and competences required by today's economy. We have a huge skills deficit in our country and it is not being addressed properly.

The Nationalist Party in government is to blame for this huge skills deficit. Long years of neglecting primary and secondary schools, long years of denigrating the linkages between education and the economy, long years of destroying vocational education have left their terrible toll.

Status instead of skills

These are some shocking statistics carried in the National Reform Programme (NRP): Malta has the highest percentage of early school leavers, at 42.6%. The number of persons aged 15 and over attending education or training reached 9.3%. Participation in lifelong learning is still low at 3.2%.

The NRP document admits: "One of the key weaknesses in Malta's Vocational Education and Training (VET) is the strong segmentation and fragmentation between formal, informal and non-formal training." There is no legal framework for Vocational Education that outlines the setting up of National Standards on VET provisions. Strategies have to be developed to ensure flexible pathways between VET and non-VET streams.

We are in the ridiculous and tragic situation that a young person graduating from the Malta College of Arts, Science and Technology (MCAST) will find it easier to be accepted in a British University but impossible to get into the University of Malta!

For many years the Nationalist government has looked on education primarily as the socialising process by which persons attain status in a closed and traditional society rather than a process through which people learn but also to know what to do in an open and modern economy competing with the rest of the world. The services sector of the economy was glorified not because it had more value added but mainly because of its status, it left you with clean hands untouched by dirty manual labour!

Despite all the frenzied initiatives launched in the education sector, the Nationalist government still lacks an overall strategic plan of action from kindergarten to MCAST, University and beyond that gives our people the skills and competencies to be creative citizens in the society and economy of the first decade of the 21st century. The skills deficit still has to be addressed seriously if we are to have economic growth and be able to create wealth.

The Economist's October article about manufacturing employment ends on this note: "The division between manufacturing and services has become redundant. A more sensible split now is between low-skilled and high-skilled jobs. Neither manufacturing nor services is inherently better than the other; they are interdependent. Computers are worthless without software writers; a television has no value without programmes.

The issue is not whether people work in factories or not, but whether they are creating wealth... Before long no one will much care whether firms are classified under manufacturing or services. Future prosperity will depend not on how economic activity is labelled, but on economies' ability to innovate and their capacity to adjust."

evaristbartolo@hotmail.com