Spending wisely on training and investment

One tangible piece of evidence that we have escaped the harshness of the recent global economic recession is the fact that our level of unemployment remained contained, both in absolute as well as in relative terms. There were dislocations, but redundant workers were absorbed in alternative jobs, as happened with many of those who lost their job at the shipyard.

Yet if unemployment is to continue to come down, in absolute terms and not just relatively, there has to be more than an increase in the demand for human resources. Such demand can come from changes and/or growth in existing economic units, and from new direct investment, if Maltese entrepreneurs identify encouraging opportunities and if we can also attract it from abroad.

Higher demand is a tall order in itself. If it does come about it is very likely to require a much altered and upgraded skills profile than that of those on the unemployment register.

That profile is far too skewed towards unemployed persons seeking work, but reporting lower grade skills to the Employment and Trading Corporation. If the situation is to be meaningfully changed in terms of profile the “training” aspect of the corporation has to become even more effective.

The ETC does not and cannot create jobs. Its employment function is to match demand with candidates from among those on its register. It does so to a considerable extent, all too often unnecessarily politicised and distorted from outside it.

Many of the job placements reflect the fact that as is the case in any economy there remains a demand for lower-skilled or un-skilled resources. Such vacancies do arise, notwithstanding the presence of an unquantified amount of underground labour, including underpaid irregular and illegal workers.

But the policy objective is to bring about, particularly through the promotional efforts of Malta Enterprise, job opportunities to meet the demands of the modern global economy. The domestic non-traded sector will absorb “labourers” and low skilled workers.

The foreign market continues to signal with grim intent that Malta stands no chance of competing with today’s low cost centres even if wages are rising in, say, China. Not even abolishing the whole entitlement of vacation leave and public and national holidays would change that fact.

This is why the whole spectrum of our education system must be far more intimately linked with the existing and projected human resource base. More immediately those on and joining the jobs register have to be encouraged and helped to acquire new skills more relevant to existing and anticipated demand.

The ETC has the authority to strike off from Part 1 of the register those who refuse job offers. They are transferred to Part 2. Those on that part are not included in the headline total of registered unemployed, and have decreased rights relative to those included in Part 1.

The ETC can also transfer to Part 2 of the register, job seekers who refuse training without sufficient reason, while it proactively offers a spectrum of job training programmes, including for registrants aged 40 years or over.

Training is important, but the programmes offered have to be suitable to the unemployed workers concerned. Individuals should not be unfairly struck off. Some still complain that the ETC appeals procedure is not fast enough and therefore can work to the detriment of appellants.

An underlying area of agreement between the government and the opposition over the way the ETC works and can improve is both important and possible. That can be framed in the overriding context that training has to be suited to the individual; otherwise resources would be wasted. The individual has to accept suitable training otherwise the chances of finding gainful employment would be lower.

The two interests combine to drive home the point that those seeking a job have to acquire a much broader base than they possess at present. That is a necessary condition. It still leaves attracting a sustained good level of investment to generate new jobs as a parallel top priority. That is the primary role which Malta Enterprise has to play in as focused a manner as possible, while undergoing a continuous critical review of the effectiveness of its policy and operations, both in Malta and abroad.

The 2011 Budget speech referred to the ETC and Malta Enterprise several times, laying emphasis on their respective roles and to the resources made available to them, notwithstanding the tight rein the Minister of Finance had to hold over public expenditure in order to target a fiscal deficit below the three per cent level in the coming year.

While understanding the constraints which bound the Minister, the resources made available to the two institutions, even when innovation is attempted, such as to enhance the skills of lower paid employees, can never be enough.

Along with effective spending in the education and health sectors, efficient spending on job training and investment promotion is at the top of the priorities public spending should follow.