The levels of employment and unemployment are of great interest not only at budget time. They are a main indicator of the well-being or otherwise of the economy, with great social ramifications. Unemployment breeds poverty and misery, especially in various categories. Youths who do not find early employment get frustrated. People in the prime of life are usually the most employable, if they have the right skills.

Those who do not are daunted by their circumstances. People who still have years of useful activity in them but find it hard to find alternative work and usually end up as the longest waiting registrants on the unemployment register lose much of their quality of life.

Employment, too, is not without its hurdles. Not everybody has a good, well-paying job. There is a chunk of employees who earn the minimum wage, or not much more that wage. They can barely make ends meet. Then there are those who work in the growth sector of the economy and who do very well.

Such labour market segmentation, inequality, tends to be masked by the labour averages, especially since this is an area of statistics which needs much further refinement to bring out with better purpose up-to-date data of income distribution.

But there is no doubt that substantial disparities exist, especially since the lowest-paid workers tend to be the least organised in trade unions. In this regard basic wages are still regulated with old-fashioned wage orders, and they do receive the annual statutory cost-of-living-allowance wage increase. But that is not enough.

It is in this area too that abuses take place by certain employers. Hence the call for specifications of minimum pay to be given in government calls for offers. This is relevant especially now that the practice is developing of employers hiring labour directly and assuming responsibility for leave, sick leave and absences, and then subcontracting these employees to whoever wants to trim responsibility of managing part of their labour force.

Surprisingly, even the Government started following this practice years ago, especially in the public hospitals where subcontracted employees work side-by-side with regular employees at much lower terms and conditions. To me this also qualifies as precarious employment and needs looking into.

At least the present Minister of Finance corrected an anomaly which grew in the last budget presented by the Nationalist government, and which led to its downfall, whereby minimum wage earners became subject to income tax because of the cost-of- living increase.

Registered unemployment in Malta has been going up and did so again in September

This anomaly was again referred to in Monday’s Budget Speech covering 2014. The Finance Minister specifically mentioned that the level of taxable income would henceforth be adjusted to allow for the effect of COLA on minimum wages, thus ensuring that minimum wage earners would not be taxed.

The Budget, which sought to reach out to workers who really want to work, to small and not so small employers, to the families as affected by welfare receipts and, in a more general sense, by education and health matters, placed a lot of focus on the work sector.

Scores of small or not so small measures were announced to make it more attractive for people, including married women whose husbands work to actually seek employment and benefit from advantageous changes in the tax system.

Work should be at the centre of any budget and it certainly was that on Monday. Among other things, the Finance Minister compared Malta’s level of employment in relative terms to that prevailing in the rest of the eurozone and European Union. He said that Malta compared well and that the level, so measured, has declined.

Strictly speaking the Minister, a seasoned economist, was right. But he should not have stopped there. International comparisons are indeed made on the basis of the proportion of the unemployed in relation to the working population. But proper analysis should go farther. Absolute figures are also of great relevance to the country concerned, though maybe not so much – for a small country – by international comparisons.

So measured, registered unemployment in Malta has been going up and did so again in September. The upward trend started well before the Nationalists were kicked out of office by the electorate, which is why the former Minister of Finance is hypocritical when he now talks of absolute unemployment as if the trend started under the Labour government. Such spin is no more than a boomerang which returns to thump its thrower in the head to try to make him see sense.

That is a political point. More important is the economic factor. Why is absolute unemployment rising? The Finance Minister and the broader government would do well to address that question. The fact the Bank of Valletta’s core activities dropped might offer a hint. I am sure that the composition of those becoming unemployed in this trend, which has lasted 15 months or more, and which should be available from the Employment and Training Corporation, can offer some explanation.

That should be addressed as a priority matter.

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