Back to work
We need to adjust to new economic realities quickly. Until covid hit, our public employment services were focused on processing immigrant labour as fast as the rising demand from local businesses needed it. That had problems of its own, some of which persist. Parking for the moment the social and environmental consequences of an over-heated economy, they were nice problems to have.
Things are a little bit darker now. At 4.4%, unemployment is nowhere near critical but the trends are not great. The unemployment rate has increased by almost a percentile since last year, that’s almost a quarter over the numbers for 2020. What’s more worrying is that more than 1 in 10 people aged 25 of younger is struggling to find work. We can’t ignore that.
Youth unemployment is an indicator of a number of structural failures and a canary in the mine of future concerns. It suggests that our education system is not as sharply tuned as it needs to be to market needs. It suggests sluggish turnover of skills and people and therefore, to an extent at least, an indicator that Maltese businesses are shy of innovation and expansion.
It is fair to point fingers at the covid pandemic. The pandemic is not a policy failure. Certainly not a failure of the Maltese authorities. But failing to pivot in the face of this challenge and be prepared to bounce back would be self-inflicted and likely devastating pain.
Again, the signs are not terribly encouraging. The government has little to show in the way of policy initiatives. The education department, the most strategic front in this battle, has had three ministers in the space of 11 months. Like all departments, it’s been firefighting the covid threat. But there doesn’t seem to be anyone thinking about the economy’s needs for when we emerge from the cold.
One of the three education ministers that lasted less than 10 months in the job has been assigned an ad hoc department to prepare for post-covid readiness. After the announcement of the creation of the department, we heard nothing. Surely, innovation and policy initiative at times of such crisis requires stakeholder engagement. Business leaders and social partners should be co-architects of such a program. And yet, as far as can be ascertained, no one knows what the government is planning. If anything at all.
The government’s jobs agency is also in disarray and its focus does not appear to have shifted away from the familiar pre-covid economy to the hard to predict post-covid one.
The country needs a plan and that plan should take lessons from what the pandemic has thought us. We have had to adapt to work from home and to shift the fulcrum of the balance between work and private life. Perhaps that should teach us new ways of bringing in back into the economy parents with children, even single parents. We need the right structures of incentives and aid to bring bright and experienced thirty-somethings back into the labour force.
It is clear that we need to prioritise helping twenty-somethings get on their feet. Part of that effort is conventional: reserving job placements for those new in the working world, paying higher salary subsidies to incentives businesses to take up new recruits, that sort of thing.
But the more important meeting of minds that we need right now is the imagining of our new economy. Think about it. What use are recruitment incentives and job placements if there are no new jobs?
This isn’t doomsday preaching. Tighter tax policies of other countries will challenge our financial services model. A lower demand for world-wide logistics will challenge our manufacturing supply lines. Fear of contagion will threaten tourism. Environmental imperatives will limit construction. Reputational weaknesses will cap the igaming and fintech as well as blockchain industry.
Our first job then is to think what the next generation of workers will be doing next. And then get busy building it.