The National Statistics Office published the most recent data on employment. This data is based on the administrative records held by the Employment and Training Corporation. Employment will always remain a key indicator of the performance of the Maltese economy. It is such a key indicator, that among the social partners and society at large, there is the expectation that when faced with a choice between sustainability of an enterprise and employment, businesses would opt for employment, in the false hope that economic and financial sustainability would look after itself.

Business realities are today dictating something different. Globalisation and free trade has made the movement of capital that much easier than it used to be in the past. The stiff competition that there is worldwide for foreign direct investment across all economic activities, in the tourism sector and in the services sector is such that even when times are good, there is the general recognition within the business sector that times are still difficult.

The fact that times could be good but still difficult is a strong indicator that the days when jobs could be taken for granted are long gone.

In fact, when making investment decisions, businesses have for a number of years now, been giving a strong weighting to labour issues, such as the availability of skills, labour costs, labour productivity, etc. There is today less and less chance of having underemployment as jobs need to be fully justified from a profitability point of view and need to be sustainable in the long term. This requirement is now becoming paramount in the public sector as well.

As governments are hard pressed to balance their budgets and are now longer allowed to provide state aid to enterprises they control, lean operations will become the order of the day across the whole economy and will not be confined just to the private sector. Governments can no longer keep increasing public sector employment with complete disregard to what happens to public finances.

These considerations are critical when assessing our economy's performance in creating jobs. Any job creation in Malta today is not artificial and is strictly related to the economic and financial performance of the employer. Hence the net increase of 424 persons in the gainfully occupied population (that is the number of those holding a full-time job) between July 2005 and July 2006 is a strong sign of a very positive performance. The number of persons in part-time employment increased by close to 3,000 persons during the same period.

This data becomes even more significant when one considers that the number of persons retiring age is not much lower than the number of new entrants into the labour market (an indication of an aging working population), because people are staying in education for a longer period of time and because the birth rate has been decreasing. In this regard the raising of the retirement age is a very pertinent point. The raising of the retirement age has often been linked to making the pensions system more sustainable, which still remains a very critical objective. However, we also need to keep in mind that one way of stopping our labour force from shrinking is by keeping persons longer in employment, that is beyond the age of 61.

In fact, it is very significant that, whereas 10 years ago the labour force was increasing at the rate of around 1,500 persons per annum, now it is increasing by a third of that amount, and the increase in the working population is essentially due to a higher participation rate.

Moreover, it is equally worth noting that the demand for jobs within an aging population shall not be for low skilled manual work but for work that is normally done by white-collar workers. Hence, the nature of jobs that will be required in future are those associated with the services sector and light manufacturing - activities that cannot rely on back breaking labour intensive operations.

There is the added fact that the increase in female employment is much larger than the increase in male employment, while the average educational level of the labour force is significantly higher to what it was 20 years ago. This again implies that the economy will need to generate jobs that are more skills based, where brain matters much more than brawn.

All these considerations require a different approach to the employment issue. Although employment numbers will continue to be important, qualitative issues are coming to the forefront. The country cannot afford to create jobs in sectors where people are not willing to work.

Unless the social partners understand that they need to discuss the employment issue within today's scenario and not the scenario of a couple of decades ago, we run the serious risk of creating unemployment.