Editorial

It really was not that long ago that Malta was worried about rising unemployment and the need to create new jobs to replace the waning demands from manufacturing. What a difference a decade makes!

Economist Gordon Cordina, writing on behalf of the Federation of Industry in The Times Business raised the possibility that Malta is over full employment.

He defined full employment as the point at which everyone who can be productively employed has a job and over full employment when there are workers who are unproductively employed, which leads to higher inflation. Malta lies in the latter category because of insufficiently productive jobs in the public sector, he argued.

He also commented that only 55 per cent of the Maltese population works, compared to the EU average of 65 per cent.

Other constituted bodies like the Malta Employers' Association and the Malta Chamber of Commerce and Enterprise commented on the dire shortage of workers in certain sectors. Over the past months, an IT company called for the government to make it easier for Indian software personnel to work in Malta, manufacturing firms warned that production would grind to a halt if technicians could not be replaced, financial services companies sucked up all the accountants and clamoured for more and pharma companies warned that the only way to get technicians was to poach from each other - driving up salaries and making them less and less competitive. The construction sector and hotels and restaurants are increasingly having to rely on foreigners to fill jobs that the Maltese are not willing to do for the wages on offer.

The question now is whether there are enough people to take up the jobs being generated.

The Employment and Training Corporation recorded a total of 6,172 people being on the unemployment register last December, down by almost 1,000 on the previous year. In 2004, it had stood at 8,254. Where have these people gone? Have they been struck off the register for working illegally? Hardly. The number of people employed, according to the Labour Force Survey, stood at 156,930 in September 2007, up from, 153,740 in the same month a year earlier.

So where can we find the people to fill the jobs of the future? Women are the obvious answer, with the number of females working increasing by almost 2,000 between September 2006 and September 2007. But the overall activity rate is still just 40.6 per cent.

A longer working life will also help.

But this will still not be enough. There must be people able to take up jobs in the areas where there is demand. In 2000, legislators, senior officials and managers and professionals made up just 15.3 per cent of the workforce. In September 2007, they made up 19.2 per cent.

In 2000, plant workers, machine operators and assemblers and elementary occupations made up 24.7 of the workforce. In September 2007, they made up just 21.6 per cent.

This is what development is all about: Moving to better jobs and better wages.

However, the danger is that rising demand for higher skills will drive up wages and make the island less competitive, in the process discouraging investors who will not want to face an uphill struggle to staff their factories or offices. In this regard, there needs to be a good balance between the availability of the necessary skills, productivity and the right wages.

It is also dangerous to glamourise too few sectors. The country needs to ensure that aviation engineering and ICT, to mention just two areas, do not suck up all the resources. Students at the crossroads need to see clear signs pointing to the various roads and know how far they will have to go and what awaits them at the end in terms of career possibilities.

It is thrilling for Malta to come this far. What it must ensure is that it can go even further.