Updated with government statement at 1.25pm
Malta’s official jobless figures have been slashed over the past months as a result of nearly 600 long-term unemployed persons being put on the public payroll as part of a newly devised training scheme, The Sunday Times of Malta can reveal.
Through this move, carried out by the Jobsplus agency, formerly the Employment and Training Corporation, the government has managed to ‘solve’ a long term issue that was keeping its unemployment statistics almost stationary, even though the economy has been performing well and creating many new jobs.
“With nearly full employment and the economy performing well, there was a problem as the unemployment figure could not go down any further due to 600 people registering for work who were deemed unemployable,” one source explained.
“Through this new scheme, the government created a foundation and got round the problem by putting the long-term unemployed on its payroll.”
When contacted, a spokesman for the Education Ministry, responsible for the scheme, admitted that some 600 unemployed have been struck off the unemployment register in the past months as they were given employment with the Community Work Scheme Enterprise Foundation (CWSE) – a government financed entity.
“All those who are in employment are obviously struck off the unemployment register, including those partaking in this scheme,” the spokesman said. However, he insisted that the aim was not to artificially lower unemployment figures but “to provide experience and skill-building rather than fixed employment, while individuals are helped in the process of finding work in the private sector”.
To provide experience and skill-building
The spokesman pointed out that this scheme had been launched by the previous administration to help the long-term unemployed and was now being restructured.
However, The Sunday Times of Malta is informed that under the previous administration those in the community scheme were not employed on a full-time basis and were still kept on the unemployment register. Under the scheme they were obliged to do some community work.
The employees of the new government foundation, which until June totalled 567, are being paid the minimum wage and considered as full-time employees.
Most of them have been assigned duties with local councils, also doing maintenance jobs at schools and helping NGOs and other public entities.
A number of local councils who spoke to this newspaper complained that the foundation employees “are giving much less output than expected from full-time employees”.
Asked how long they would be retained on the public payroll, the spokesman said the scheme so far is for five years.
The unemployment rate is calculated as a percentage of the labour supply, which varies.
According to Eurostat figures, Malta’s unemployment stood at 5.1 per cent in July 2015 and remained at the same level every month after that. Until, that is, last February, when 4,511 persons were registered as unemployed.
As soon as the foundation started employing those previously considered to be unemployable, the figure saw a sudden drop. In March, according to the latest public figures, there were 4,033 registered unemployed, a rate of 4.7 per cent.
The unemployment rate has since fallen to 3.9 per cent in July, the lowest registered in the EU. The absolute number for that month is not yet available.
The downward shift was celebrated by Prime Minister Joseph Muscat and many Labour supporters, who said this achievement meant that Malta was becoming “the best in Europe”.
“For the first time in history, the unemployment rate in Malta dropped to under four per cent,” an official government statement issued by the Department of Information stated last week.
Unlike other government initiatives, the launch of the new CWSE Foundation was low key and was never given any publicity by the government.
Scheme gives dignity to vulnerable people - government
In a statement this morning, the government said the scheme, which was started by the previous administration, gave dignity and work to vulnerable people who had been claiming unemployment benefits for years without contributing back to society through their work.
It said unemployment was mainly down due to the country's strong economic growth and active labour market policies. The latter, the government said, had spurred growth in the size of the labour market as well as in private sector job creation.
A total 20,000 new jobs have been created in the private sector in three years.
The percentage of public sector employees in the economy decreased from 26.7 per cent in 2013 to 25.1 per cent in 2016. This was because the labour market increased in size and the growth was driven by the private sector, the government statement said.
Moreover, this administration was seriously tackling the abuse of unemployment benefits, the statement added. Social aid had increased since 2013, but the government was determined to prevent those who sought to abuse the system from doing so.
Unemployment, the government said, has been on a downward trend in a steady fashion since January 2014. This government reversed a trend left by the previous administration, with unemployment creeping to the 8,000 mark. It had halved the number of unemployed on the back of a strong growth rate which Malta had not experienced in years.