The National Employment Policy is an important document and comes at a time when unemployment is gradually increasing. The document sets a number of initiatives to attract the highest number of workers to the labour market, throws light on labour market deficiencies and proposes a wide range of corrective measures. Finding the right balance between economic and social players is always tight rope walking, adopting and implementing the best policies and strategies to improve a labour market which is constantly changing is the bigger challenge. In this process competitiveness has to be preserved. Sudden economic changes to the business community, large or small, may tilt towards higher unemployment levels. In a very volatile labour market environment changes have to be studied, planned, measured, owned by the key stake holders and gradually implemented.
Rightly so the Document goes back to 1987, when a newly elected government led to a shift in economic philosophy that promoted liberalisation, expansionary fiscal policy and a transition towards a service oriented economy. The Document takes also a snap shot of various important indicators.
I will briefly look at some proposals. Making work pay is an economic and social concept which has the support of all stake holders. It is the methodology which may be different.
The proposal to give an ex-gratia/additional payment to all minimum wage earners contradicts the make work pay concept. This proposal will have counter-productive labour market repercussions if implemented as is proposed.
Similarly, the tapering of the social benefits, at face value may be seen as a pragmatic solution to attract unemployed workers to the labour market. The tapering of the social benefits to new entrants in the labour market will disturb the take home income relativity.
The proposal that unemployed workers entering the labour market will receive their rightful wage and a portion of the social benefits for the following three years while his/her work colleagues will continue to receive the same wage will result in a very unfair situation. Furthermore, the limited inspectorate resources available may encourage beneficiaries to utilise this benefit loosely.
While every effort should be made to support low income earners a clear demarcation line should be made between wages/salaries and social benefits.
Pushing upwards the national minimum wage may be an attractive political instrument but great care has to be taken into account as the effects of the increase will impact broadly across the national wage structure and competitiveness. Any additional wage increases apart from the yearly statutory cost-of-living-adjustment on the national minimum wage will push upwards all wages and salaries of all workers whether in the private and public sector. Workers’ wages and salaries commensurate with their respective duties and responsibilities thus wages and salaries relativity between workers’ doing different duties has to be maintained. The national wage structure should not be severely disturbed. Human nature being what it is workers in any grade may feel they are being unfairly treated. Workers may mount pressure on their representatives to get a better deal.
Salaries and conditions of work will improve if unemployment is kept under constant check. The supply and demand principle applies also in the labour market. If unemployment gets higher workers’ wages and conditions of work will deteriorate. Low unemployment rates will push wages and conditions of work upwards. This has been clearly demonstrated in the past years.
Attracting foreign direct investment and encouraging local entrepreneurs to further increase their business activity are essential levers to address higher unemployment rates. If these efforts are successful workers will have an opportunity to improve their present take home pay and enjoy better conditions of work.
The public sector should not be piled with unproductive workers to smoke screen higher unemployment figures. The 1,400 workers engaged in the public sector in the past thirteen months are sending the wrong signals to the tax payers and business community.
The cheery on the cake comes from the conflicting messages which are constantly being conveyed from various Administrative Quarters. A clear demonstration of the confused messages was made during the Conference organised by the Forum Unions Maltin. While addressing the assembly Prime Minister, Dr Joseph Muscat was reported to have accepted a claim wherein all hospital cleaners employed with various service providers will be receiving a salary equal to those in the same grade in the public sector. Taking into account the current collective agreement for employees in the public sector this is yet another bounty wage increase. I would be surprised if other workers will not follow in the same direction.
Though The National Employment Policy has made valid suggestions and proposals the Document fails to address precarious employment, immigrants’ employment opportunities and is rather on slippery ground with the additional costs in the social security contributions to the business community. The increase should not be taken lightly and in isolation as the second pillar in the pension’s reform is as yet not being serviced. This will be another additional cost to the business community. Treading carefully is recommended.
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