The Malta Independent 17 May 2022, Tuesday

That Bogdanovic feeling

Rachel Borg Saturday, 15 January 2022, 08:33 Last update: about 5 months ago

Why is it, that so many important reports published by government departments and ministries give you that “Bogdanovic” feeling?  That is, you get a sense that the document is not an original policy but one which is re-created from external sources, delegated to a senior civil servant to re-hash and then launched as a pillar for policy.

One such example is the new National Employment Policy for 2021-2030, marking out the government's holistic vision for employment in Malta for the next nine years. 

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Immediately one gets the sense of disconnect between the aims and content of the report and the reality of the job market in Malta.  Maybe in the course of studying for a degree in economics the subject matter would have come up and been part of the course requirements on an academic level.  Producing the right policy though is a different matter and demands honest analysis and qualified authors.

To give an impression that things are getting ahead whether in education, employment, industry and so on, these kind of professional policy documents are issued from time to time to be on record and to satisfy the need for budget expenditure which then hardly actually results. 

Reality is found more in the kind of jobs where Chris Fearne puts his campaign manager on €163,000 ‘irregular’ contract.  Or down at Transport Malta where promotions are dished out like a marijuana high and jobs are pulled out of the sack like lotto numbers. 

The report on the National Employment Policy is politely saying that government is not going to collect enough taxes if we continue to pay peanuts to employees and they continue to rely on government jobs.  Inadvertently it puts the problem of employability onto the private sector whilst continuing to swell the public sector employment with more and more bogus jobs.

Latest statistics show that 15% of the workforce is employed in the public sector, 12% are self-employed (listed with private sector) and that 67% are employees. 

7% are employed in construction; 17% with professional, scientific, technical, administration and support services;  6% with accommodation and food services; 21% with wholesale and retail trade;  transportation and storage;  information and communication; a further 24% fall under public administration, defence; education;  human health and social work activities; and a miscellaneous number with arts, entertainment and recreation - 5%;  financial, insurance and real estate activities - 6%;  manufacturing, quarrying and utilities - 11%;  1% in agriculture, forestry and fisheries; and 2% in other services (massage parlours?).

Shop-keepers, salespersons, drivers and warehouse staff make up quite a bulk of the employed and self-employed at 21%.  The highest percentage of 24% would seem to be employed by the public sector.  However, they do not reflect in the public sector employment figure of 15% so there must be a substantial number employed under a GWU scheme or by a private-public sector agency such as Stewards Health Care. 

So how employable is the Maltese workforce expected to remain once the public sector is saturated?  The future of work is changing incredibly.  The lockdown and work from home experienced in the past 2 years precipitated a digital economy much on the same way as online shopping was driven up.  The digital economy can launch many individual entrepreneurs and does not need bank loans or offices in the most part.  It is based on creativity and converting a talent or skill into an online commodity.

Quoting from the employment policy document: 

“The policy is aimed towards a better quality of life, higher standards of living facilitated by higher incomes, and improved well-being, whilst equipping workers with the needed tools and skills for the future. The policy is fundamentally based on the premise that work gives not just dignity, but personal enrichment and life satisfaction.

“Malta is at a turning point. The policy document professes change in both the way we look at work and productivity in Malta. We have already achieved a lot over the past few years in relation to employment. As local figures verge close to full employment, it is time we raise the bar and raise the value of what we produce. It is no easy task. Innovation demands that we continue to upskill and change our businesses and workforce. Failure to do so has consequences. Just as we have beaten difficult odds in the past, we must continue to do so today and tomorrow."

In other words, demand for staff will exceed supply so pay up.  Something similar to what Boris Johnson has laid on for the UK with Brexit.  The cheaper foreign workers are gone so re-train and pay higher wages for national workers.   The truth, however, is that the private sector are not able to find the right workers and cannot afford the kind of wages being driven up in addition to the higher export or import costs.

Malta imports much of its goods and the increase in costs is already being felt.  Having to increase wages is going to make goods and services unaffordable.  Even though other EU countries face cost increases, price comparisons between Malta and these countries will show the higher cost of living that we are facing.

So it is not enough to coat the pill in fancy jargon about skills and continue to rely on foreign workers.  Foreign workers, themselves, are not a fixed entity which does not experience its own upward mobility.  The increased demand at home and better prospects makes moving to an expensive country with low wages rather unattractive.  Malta is now in the bottom 10 for attractiveness for foreigners where before it was in the top group.

Unless the government begins to release public sector workers into the private sector and change the mentality to understanding that work is something you earn and produce, rather than a right for a vote, that gap that the Minister is talking about will become wider and the government earnings lower.  GDP will fall.

With tourism, our main industry, still struggling to establish itself meaningfully again after Covid, self-employed will also suffer. 

How employable are the Maltese?  In the past we boasted about having a skilled workforce and attracted investment to the country. With all the negatives around us and the skilled workforce becoming more and scarcer, the chances of making it to the Best in Europe are fading rapidly.  Those holes in the ground that you see all around you?  Not quite what they meant by swimming pool. 

 

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