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Malta’s New Employment Policy Revealed: How The Island Plans To Raise Wages By Improving Skills

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Malta’s employment sector is set for a radical rethink with the government looking to drastically reduce the skills gap in the country’s gap and hopefully improve wages in the process

The employment policy, which outlines a strategy until 2030, was unveiled by Finance Minister Clyde Caruana earlier this morning and includes a 352-page document that also takes an honest look at worrying problems facing Malta’s workers. 

The report, which can be read here, covers the root causes of the issues to in-depth sector-by-sector analysis of the entire employment market, whether that’s gender, types of work, or foreign employment. It is a vital read for anyone interested in the current state of the county, particularly ahead of the upcoming budget, due to be presented a week from now.

Low education levels and fertility rates are leaving Maltese poorer: Why is the policy needed?

Malta’s unemployment rate remains one of the lowest in the EU while the employment ratio has undoubtedly grown over the last decade and currently stands at 77%, just one per cent shy of targets set for 2030 in the previous policy. 

However, current successes mask growing issues, like an ageing workforce due to drops in fertility rates, and even more importantly, the country’s skill gap. 

The country has indeed made strides in improving the number of individuals with qualifications above secondary school.

In 2010, around 50% of the workforce did not receive any formal education beyond mandatory schooling till the age of 16. That number is now around 35%, while the number of people who have completed tertiary education has climbed up to roughly the same figure.

Still, Malta continues to be plagued by a high number of early school leavers, with the country ranking in third-bottom in the EU in terms of expected school leaving age, which stands at 16. 

Figures also show that Malta has one of the highest rates of workers with a low level of education, with around 34% of workers having at best a lower secondary school level of education. 

The major skill gap is having a significant effect on people’s earnings. Which, while improving, remain dwarfed by those occupying high-paying roles, most of which are in the foreign-dominated gaming industry. 

At present, almost two-thirds of the gaming industry, which is one of the most lucrative in the country, is occupied by foreign workers, who typically have a much more dynamic skill set for the positions than their Maltese counterparts.

This raises major questions over the country’s educational policy over the last few decades, with Maltese workers failing to penetrate the vital industry despite having a presence in the country for over a decade. 

In fact, Maltese people who complete tertiary education earn significantly more than those who do not.

The average wage of a person who completes tertiary education is €25,631 compared to an average of €14,817 for those who do not go further than secondary school. That average income disparity increased to €10,814 by 2019 from the €7,593 figure recorded in 2010.

People with degrees or equivalent have also seen a greater increase in their salaries over the last ten years, earning on average around €7,000 more than they would have in 2010, about €3,000 more than those who stopped at O-levels. 

“Education will give you a better future, that is clear,” Caruana repeatedly stressed during a press conference. 

Still, this does not mean that those with university degrees or equivalent live in bliss – with around 22% of tertiary-educated respondents in a survey commissioned for the policy saying that they feel their skill set does not apply to their current employment. 

More details touching on a wide variety of specific sectors of society can be found here.

How does the government plan to address this?

It should be made clear that while the document sheds some harsh realities for the country, it is geared towards addressing those issues and building a stronger Malta that each portion of the workforce can enjoy. 

The employment policy sets out many vital initiatives and recommendations that will help the country prepare tomorrow’s workforce – from improving our digital know-how, skill sets and addressing emerging industries like platform economies, which have been the subject of intense criticism, and new employment set-ups, like working from home and shift work.

It focuses on three key pillars: equipping workers with the required skills, enabling employers to be powerful drivers of equity and sustainability for the workforce, and supporting and building responsive institutions of work to help both employers and employees. 

Without the proper investment in skills, people will only grow more and more unemployable – damning Malta’s competitiveness on the global economic stage. 

First, a National Skill Consensus will be set up to get a proper insight into the current situation. Then, a revamped Skills Policy Council will be set up, which will be tasked with bringer together educators and training providers to help businesses effectively respond to the glaring shortages in the industry. It will also help the government better plan for the future – especially for the younger generations.

The Skills Policy Council will also work to provide better reskilling programmes and training for workers.

Incentives for retired workers to offer training or mentorship programmes at their place of employment or in trade schools should also be set up – making use of talented workers either nearing or in retirement to develop the new generation. 

Retired people, particularly in vocational employment, should also work with vulnerable groups and long-term unemployed people to help them in new industries. 

Benefits should be provided to people who continue working after retirement – these initiatives, the government hopes, will help increase Malta’s current working life – which will help address concerns over an ageing workforce.

Meanwhile, a transversal skillset certification, which looks at developing a diverse skillset that can prepare people for several different jobs, should be developed and implemented. An industry skills framework, which defines critical information in career paths and salary projects, should also be set up. 

With COVID-19 firmly on people and the government’s minds, a job disruption forecast should also be set lifelong up, particularly with digitalisation and automation on the horizon. The policy says that it should be critical that students and workers are informed on what changes are expected to occur and what their future jobs could look like. 

Lifelong learning and upskilling should also be encouraged since it is clear that people should constantly be educating themselves well beyond leaving whatever educational establishment they attended. This, the Minister and document concede, will require a radical shift in mindset for Maltese people.

Apprenticeships and traineeship programmes should also be a much more viable and valuable form of education to accommodate the many different types of ways people absorb information. Workplace learning and revamped skill cards system is also needed.

Flexible working solutions must be encouraged to better reflect modern realities.

Gender gaps are also an area that needs to be addressed – through an increased focus on STEM careers, entrepreneurship schemes. 

In terms of employers – the policy seeks to help businesses grow through quality employment by establishing an effective internship and placement agency for skilled talent available in the country. 

This, coupled with retention schemes and increasing access to funding for research, innovation, new technologies, will sustain growth and job creation. Unfortunately, the green economy, usually touted to be the future, will only get tax credits for new jobs. 

The policy also suggests improving incentives to employ highly educated persons.

Crucially, the government will develop a National Economic Migration Policy to ensure a sustainable flow of workers into the country. Retention schemes will also be introduced to ensure that people who move here stay and build long-term relationships with employers in the country. 

When it comes to temporary work, an agency would also be set up – with migrants currently paying significant fees related to permits in the country, even though many of these are prohibited under international and domestic laws due to poor enforcement. An agency would help ensure transparency and better p[rotection. 

Ultimately, the policy is more than just about jobs. It is also about people and will help design a future that will help employees employ more Maltese in better-paying jobs.

Skills will be the determining factor in that – this policy hopes to address all that. 

More in-depth articles on the contents of the policy document will be published throughout the day.

What do you think of the policy?

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Julian is the Editor at Lovin Malta with a particular interest in politics, the environment, social issues, and human interest stories.

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