The employment landscape in Gozo offers a fascinating glimpse into the island’s economic dynamics and challenges. Gozo has a unique economic structure heavily influenced by its public sector, the influx of foreign workers, and significant gaps in employee training. These factors have a profound impact on the Gozo’s Gross Domestic Product (GDP) and its long-term economic prospects. The island’s demographic shifts and the struggles of the tourism industry to find trained employees add further complexity to the employment situation.
The public sector in Gozo is a dominant constraint. According to the latest figures published by the National Statistics Office - NSO, the public sector directly employed one out of every three gainfully occupied workers in Gozo, or 35.5%, (5974 employees) in particular by the Gozo Ministry and its satellite offices. This high percentage shows a significant reliance on government jobs for economic stability. However, many critics perceive the public sector in Gozo as having an inflated workforce, with a significant number of workers doing minimal work. Gozo’s Bishop insisted productive work should accompany that remuneration and that anything else is tantamount to theft. Political patronage creates this situation, using jobs to secure votes.
Instead of recruiting the required public administration employees through the proper channels, the government also requests additional staff, such as security, clerical, and even managerial employees, through tenders or direct orders.
Several employment agencies, which flourished during the past years, provide the personnel requested by the Gozo Ministry and take a commission for each employee that is ‘found’. But the future of these employees is not secure. All that matters is that the Gozo Ministry trumpets its hollow achievement in cutting down unemployment.
The presence of foreign workers is another critical aspect of Gozo’s employment scenario. Gozo Tourism Association (GTA) survey in 2023 says over 77% of tourism businesses in Gozo employ foreigners but have problems keeping staff. Foreign workers fill crucial gaps in both skilled and unskilled labour markets, supporting sectors such as tourism, construction, and healthcare. While they contribute substantially to the economy, their integration into the local workforce poses challenges. Language barriers, cultural differences, and social integration issues can affect workplace harmony and productivity. The influx of foreign labour can create wage pressures, particularly in low-skilled jobs, leading to discontent among local workers including exploitation of these foreign workers.
A significant issue in Gozo is the skills gap and lack of adequate training among employees. This problem affects both the public and private sectors, leading to reduced productivity and inefficiencies. In the public sector, the lack of proper training and motivation among employees results in substandard service delivery in essential areas, such as healthcare, education, and municipal services. This inefficiency affects the overall economic performance and standard of living of Gozo residents.
In the private sector, the skills gap hampers competitiveness and innovation. Businesses struggle to find adequately trained staff, which affects their ability to improve productivity and contribute to added value GDP growth. The tourism industry, a vital component of Gozo’s economy, is particularly affected. The seasonal nature of tourism, which leads to temporary employment and a lack of continuity in staff training and development, worsens this issue.
According to GRDA’s discussion paper ‘Employment and Skills in Gozo’. by Economist Ivan Ebejer, the upskilling and reskilling of employees will suffer since most of the Gozitan micro enterprises face higher hurdles in terms of financial resources and lack of time to train their workforce.
Various indicators show Gozo is underperforming relative to mainland Malta, including in terms of productivity and pay performance. Gozo also shows suboptimal job density, an indicator of skills demand, which measures the proportion of jobs to the resident working population in a region. Over a six-year period, to 2021, Gozo’s GDP per capita, though still lagging that of Malta, increased by 27% to €18,290 compared to that of Malta at 20% to €29,468.
The demographic situation in Gozo is also changing, with implications for the labour market and economic development. The island’s population is aging, and there is a notable outmigration of young people seeking better opportunities in mainland Malta and elsewhere. This demographic shift reduces the workforce and increases the dependency ratio, additionally pressuring public services and social support systems. An aging population also means a higher demand for healthcare and social services, further straining government resources. In Gozo, old age dependancy is 33.5% compared to mainland Malta at 27.6%.
The tourism industry’s struggle to find trained employees affects the quality of services offered to tourists, affecting the sector’s revenue and contribution to the GDP. Given that tourism is a significant economic driver for Gozo, any decline in service quality can have a substantial impact on the Gozo’s overall economic performance. Quality, not quantity, is the aim which is always promoted but never focused on seriously by the Government.
Addressing these issues requires a varied approach. First, there needs to be a concerted effort to streamline and downsize the public sector. This could involve reducing the number of unnecessary positions and focusing on improving efficiency and productivity. Implementing performance-based incentives and investing in training for public sector employees can enhance service delivery and reduce the fiscal burden on the government.
Second, there should be initiatives to integrate foreign workers more effectively into the local workforce. Language and cultural integration programs can help bridge the gap between local and foreign workers, improving workplace harmony and productivity. Measures to ensure fair wages and working conditions can prevent social tensions and ensure that foreign workers contribute positively to the economy.
Third, addressing the skills gap is crucial. Achieving this requires investing in education and vocational training programs tailored to the needs of the local economy. Partnerships between educational institutions and businesses can ensure that training programs align with industry requirements, providing a skilled workforce that can drive economic growth and innovation.
Fourth, supporting the tourism sector in finding and keeping trained employees is essential. This could involve providing incentives for businesses to invest in staff training and development, as well as creating career pathways within the tourism sector to attract and keep talent. Improving the quality of services offered to tourists can enhance the sector’s contribution towards sustainable economic growth.
Finally, addressing the demographic challenges requires policies that encourage young people to stay and work in Gozo. Creating attractive job opportunities, investing in infrastructure, and improving the quality of life can help keep young talent and reduce the dependency ratio. Supporting older adults population through efficient healthcare and social services can relieve the economic impact of an aging population. In Gozo, old age dependancy is 33.5% compared to Malta at 27.6%.
In conclusion, a high reliance on the public sector, foreign workers, significant skills gaps characterise the employment situation in Gozo, and shifting demographics. These factors have a complex impact on the Gozo’s GDP and economic development. Addressing these challenges requires a strategic approach from the Government that focuses on improving public sector efficiency, integrating foreign workers, closing the skills gap, supporting the tourism industry, and addressing demographic changes. By implementing these measures, Gozo can enhance its economic performance, drive sustainable growth, and improve the quality of life for its residents.