The unemployment figures issued by Eurostat in September showed Malta as the country with the third lowest unemployment rate across the European Union’s 28 member states. This rating is worked out according to the definition of ‘unemployment rate’ given by the International Labour Organisation (ILO), and is calculated by the number of unemployed persons aged 15 to 74 as a percentage of the labour force made up of the total number of employed and unemployed people.
Malta excludes certain categories of persons from its employment statistics by considering them as economically inactive when, at the same time, persons in these categories are included as unemployed or potentially active persons by an EU country with generous social legislation.
These people include working-age students, pensioners, and woman whose social responsibilities do not permit them to work. Thus, unemployment statistics across the EU member states are not worked out on a like-for-like basis. It is therefore quite possible that these statistics do not provide consistent, reliable, complete, and accurate indicators of the actual employment situation in each respective country.
Maltese legislation establishes a statutory age of retirement consisting of a chronological age arbitrarily decided by the State when the individual is obliged to leave work while at the same time his right from unfair dismissal from work is extinguished. This is generally not considered to infringe the EU’s Employment Equality Framework Directive that expressly excludes national provisions laying down retirement from its scope.
In this respect, the European Commission concedes that there may be legitimate labour market reasons to permit employers in certain circumstances to regulate the timing of the retirement of older workers, such as the need for workforce planning and the possibility of opening up vacancies for young people.
Currently a quarter of the Maltese population is aged 60 years and over, which clearly testifies to the country’s demographic shift towards older ages. Consequently, a substantial number of retired persons aged 60 to 74 who are potentially employable by ILO standards have been excluded from the country’s employment statistics. This is a clear form of disguised unemployment.
According to the latest Labour Force Survey estimates released by the National Statistics Office (NSO) in September, during the second quarter of this year, total employment stood at 191,384 accounting for more than half the population aged 15 and over. Unemployed persons stood at 9,822 (2.7 per cent) while inactive persons totalled 163,750 (44.9 per cent).
The government seems to prefer to give available local jobs to foreign workers than to qualified and capable older Maltese adults of whom many are facing poverty
Only 3,084 persons aged 65 years and over were in employment making up a mere 1.6 per cent of the total labour work force. These include workers in a few selected occupations who are allowed by law to maintain their employment beyond retirement age and individuals who were given a position of trust with a government ministry or parliamentary secretariat.
Malta has an exceptionally high unemployment rate for women making it the EU state with the widest gender employment gap from among all the 28 states. According to the Labour Force Survey, 61.2 per cent of the labour work force in Malta is made up of men. There is in fact 63.9 per cent of the male population in employment compared to 40.9 per cent of the female population. This brings to mind the pre-electoral promise made by Joseph Muscat that never materialised, that a Labour government would break through the glass ceiling that many women were facing to make it the most feminist government in Maltese history.
The employment strategy adopted by the government of excluding older persons from employment statistics does not take due consideration of the economic burden in the form of increased requirement for pensions and health care resulting from demographic ageing.
In fact, there has been a 3.5 per cent rise in the contributory benefits outlet in Malta in 2015 over the previous year, mainly due to a €20.4 million increase in pensions with respect to retirement. During 2016, two-thirds pension beneficiaries increased by 2,109 according to NSO statistics.
Three years ago, when President Marie Louise Coleiro Preca was minister for the family and social solidarity, she recognised that the main challenge in economic terms faced by the government in the future of ageing policy remains that of how to pay for people’s retirement in view of the smaller working population that Malta is experiencing, which implies lower returns.
Furthermore, former parliamentary secretary for the elderly Franco Mercieca considered it both absurd and immoral to alienate and exclude one-quarter of the population aged 60 years and over on the basis of chronological birthdays.
The reply of the Prime Minister to this was that for elderly people to remain working there has first to be an innovation, which drives economic growth so that youth unemployment does not increase. However, despite the significant economic growth that has since been registered by the country, the government discarded recommendations for the abolition of mandatory retirement age and age equality based legislation that were made last year by the Pensions Strategy Group (PSG) set up in June 2013 by the Ministry for the Family and Social Solidarity and the Ministry of Finance.
The government did not even honour a promise announced in the 2016 budget, that it would implement a recommendation made by the PSG for the introduction of a scheme that would provide workers who reach the age of retirement with the option to continue in employment for longer before going out on a pension. The government failed to lead by example when it is denied its own employees in the public sector who reach pensionable age the right to make such option.
The government seems to prefer to give available local jobs to foreign workers than to qualified and capable older Maltese adults of whom many are facing poverty. This situation has been recognised by the PSG that has unequivocally declared that the State pension cannot serve as the sole source of income on retirement. It is simply unacceptable that the government brushes off its responsibility of ensuring that all older persons experience financial safety.
All in all the unemployment situation in Malta is not as rosy as it is being depicted by government protagonists.
Denis Tanti is a former assistant director (industrial and employment relations) in the Ministry of Health.