The employment market in Malta is often discussed very superficially with politicians extracting those bits of data that suit their purposes.
Admittedly, Malta has one of the lowest unemployment rates in the EU. At the same time, it also has one of the lowest employment rates. For instance, few attempts, if any, seem to have been made to gauge the extent of employment in the shadow economy and the working conditions of the ‘unofficially’ employed.
Another enigma of the local labour market is that the Maltese are working the longest hours in the EU for low pay. Ten years after joining the EU, the aspiration of many Maltese workers to soon be earning the kind of salaries earned by workers in the UK or Germany remains a dream.
Recent Eurostat statistics confirm that “in Malta in 2012 labour costs stood at €11.80 an hour, slightly more than a third of the euro area’s average of €29.30 an hour”.
Average statistics hide some very sobering realities. Workers in certain professions in Malta earn much higher rates than the average hourly rates quoted by Eurostat, even if similar workers in certain EU member states earn even more. The divergence in salaries for local professional workers and those in the EU is much lower than that of low-skilled workers.
One conclusion that could be drawn is that the income of skilled and professional workers in Malta is converging at a faster rate with those of workers in similar employment in the better paying EU countries.
On the other hand, low-skilled workers are having to work longer hours to supplement their pay packet and may be finding it more difficult to see their income converge at a faster rate with that of other EU workers.
While there will always be a public debate on the need to supplement the income of low-paid workers by increasing the minimum wage or by introducing the concept of a living wage, the long-term solution to low wages and long working hours among low-skilled workers must be found in the reforms that are needed to improve the dynamics of the labour market.
There needs to be a combination of measures that make it worthwhile for younger workers to enter the labour market with higher skill levels even if they are aiming for jobs where no formal qualifications were demanded in the past. The tourism industry, for instance, needs to employ better skilled workers with formal trade qualifications even for receptionists, cashiers and waiters.
The same concept should apply to those working in the healthcare industry. Caring of the sick and the elderly requires formal training not just for nurses and paramedics but also for other employees who look after these people on a regular basis.
Malta may have lost most of its manufacturing base because of low-cost competition from far eastern countries like China and Vietnam. But with service industries, especially those relating to tourism, growing at a fast rate, employers will be adopting short-sighted strategies if they resort to employing low-paid foreign workers from countries where wages are even much lower than in Malta.
Educators, employers and industry regulators must put high quality standards at the top of their labour market strategy. Young people aspiring to enter the labour market need to take their education and training more seriously if they want to land the kind of jobs that will guarantee them a good standard of living.