Last Tuesday, and not for the first time, one of the constituted bodies – the Malta Employers’ Association – called on the government to reduce the number of workers in the public sector.

In its analysis of the government’s pre-budget document For a Better Quality of Life, the MEA suggests a six per cent reduction in public service employment over the next five years.

Although public service employment has dropped over the past year, the MEA says it still “a high and unsustainable segment”. The association said public service employment was “exaggeratedly elevated at 33 per cent of Malta’s total gainfully employed population”.

Moreover, it constitutes 65 per cent of the government’s total wage bill. The MEA is proposing that the level of employment is reduced to 27 per cent over five years, a figure that is in line with most other European Union member states.

This is a valid argument but implementing this proposal will not prove to be an easy task.

A reduction in public service employment per se would be beneficial to Malta’s economy. As the MEA said, the government’s wage bill would drastically decrease and its yearly deficit would drop, or the money would be put to better use elsewhere.

But what will happen to the six per cent who would be asked to “leave” the public sector? Would some of them be enticed to take early retirement; at the same time adding to the country’s pension bill and therefore another “wage” burden on the government?

The MEA is suggesting that they be re-employed in the private sector but, one must ask, are there enough jobs to go around? Industry complains the economy has slowed down and companies are struggling to make ends meet these days. Many are trying to cut costs and not spend more; and cutting costs often means laying off workers.

The MEA is correct in proposing a reduction in the number of government workers, but is the private

sector ready to add more expenses to its wage bill by

taking on these workers? Can the country – in its present situation – sustain such a shift from the public sector to private industry?

The latest figures available – April 2005 – show that there are 137,142 gainfully employed. With 33 per cent of these working with the government, this would mean that there are just over 45,200 workers in the public sector. To bring the figure down to 27 per cent of the total gainfully employed would mean a reduction of some 8,000 workers from the public sector, or some 1,600 a year if the cuts are made over a five-year period.

To find alternative employment for 1,600 workers in the private sector every year for five years is no mean feat, especially if, as the MEA said, such a shift must be done “provided that the economy is competitive enough to absorb such labour in private enterprises”. At this point in time, there are doubts that this can be achieved.

The MEA makes another point in its analysis. It says this is a realistic target but it can be reached only if there is the support of all the social partners.

This would be another major hurdle to overcome. We all know how talks on the social pact held earlier this year collapsed because there was no agreement. Therefore, even if the right economic conditions existed for such a proposal to be implemented – and, again, it is believed that the principle per se is valid – reaching an accord among all the social partners would be a tough goal to attain.