Malta: Working conditions of young entrants to the labour market

  • Observatory: EurWORK
  • Topic:
  • Job quality,
  • Published on: 19 December 2013



About
Country:
Malta
Author:
Institution:

Disclaimer: This information is made available as a service to the public but has not been edited by the European Foundation for the Improvement of Living and Working Conditions. The content is the responsibility of the authors.

Contrary to European mainland experience, the Maltese labour market is still buoyant with a rising employment ratio while unemployment remains subdued. As long as this trend persists, the working conditions of the Maltese labour market will keep on improving. Nevertheless, following a decade of external shocks (Malta’s restructuring due to EU membership in 2004 and the 2008 crisis), working conditions – especially for new entrants – started to deteriorate recently. This deterioration mainly concerns specific sectors which do not require high skilled labour. Despite this setback, working conditions in Malta especially where youths are concerned still continue to outperform European trends.

Introduction

This EWCO CAR is specifically focused on the group of “young entrants to the labour market”. This group includes all young people (between 15 and 30 years old) who have recently entered into the labour market (i.e., people with a work experience shorter than 1-2 years in the labour market), with relative independence of their age and for whom work is their main and core activity. This definition excludes young people for whom studies are their main activity but who combine their studies with some remunerated activity as part of their training programmes (e.g. apprenticeships in dual systems), as well as unemployed young people, even if they are actively looking for a job (see Background note for more detailed information on the concept of young entrants to be considered in the research).

The CAR coordinating team is conscious that such as “narrow” definition of “young entrants to the labour market” can make difficult the identification and collection of relevant information on the topic. Therefore, and in the case no national information is available using this “narrow” definition, National Correspondents can use a “proxy” definition of “young entrant to the labour market” as any young person (i.e. between 15 and 30 years old) who is in employment, irrespectively of the number of years of experience that he/she has in the labour market (again, unemployed young people are excluded from the analysis).

The questionnaire focuses on the following topics:

  • General description and characterisation of the main current working conditions of young entrants to the labour market in your country in comparison to other age groups (around 700 words)

  • Identification and characterisation of existing differences in working conditions within the group of young entrants to the labour market in your country (around 600 words)

  • Evolution of working conditions of young entrants to the labour market in the last five years. Effects of the economic crisis (around 500 words)

  • Initiatives taken by national governments/social partners in order to improve employment levels and working conditions of young entrants to the labour market (around 500 words)

  • Final commentary on the main results (around 100 words)

Block 1: General description and characterisation of the main current working conditions of young entrants to the labour market in your country in comparison to other age groups

NCs are kindly requested to provide the most updated information (coming from national surveys, administrative registers or ad-hoc national research/studies) on a number of working conditions-related variables specifically related to young entrants to the labour market in comparison to other age groups. Please provide the information only for those variables where significant/important differences, either positive or negative, can be identified in relation to other age groups, stressing the causes and rationale of these differences

Suggested extension of this section: around 700 words

1.1 Career and employment security issues

In the absence of any national research, the figures discussed hereunder are limited to the European Quality of Life Survey 2012 and European Working Conditions Survey 2010.

Contrary to what happened in most European Member States, Malta was affected only by a slump in aggregate demand as a consequence of the havoc created by the financial crises. The damage inflicted to the economy was by far lower compared to elsewhere. Being export driven, Malta’s economy rebounded quickly following the recovery after mid-2010. Considering the limited temporal downswing, the labour market remained intact without enduring serious consequences.

As a result of the good labour market performance, Maltese workers are more confident about their prospects compared to their European peers. Maltese youths share the same positive attitude expressed by the labour force in general about the ‘likeliness to lose one’s job’; actually they are less fearful of losing their job (see table 1.1). This is contrary to youths in EU27 which tend to be equally preoccupied like older persons of losing their job. Among the 25-30 years age cohort, the share of EU27 youths worried of losing their job (13.7 per cent) is twice as much as the share of Maltese youths (6.0 per cent), (see table 1.1).

Notwithstanding Malta’s labour market good performance, the Maltese are less optimistic compared to their European peers about the ‘likeliness of finding a job with similar work conditions’. Contrary to the European trend, Maltese youths are even less confident of finding a job with similar conditions even when compared to Maltese of older age (see table 1.12). In part this occurrence may be explained by low job mobility in the labour market. Workers under 30 years of age who had been with the same employer for more than 4 years account for 28.1 per cent in Malta, contrary to the 16.8 per cent in the EU27 (EWCS, 2010).

Table 1.1: Likeliness to lose job in the next 6 months

 

18-24 years

25-30 years

All ages

 

Malta

EU27

Malta

EU27

Malta

EU27

Very likely

5.0

6.3

2.1

4.6

3.1

4.6

Quite likely

3.5

7.6

3.9

9.1

6.2

8.6

Neither likely nor unlikely

13.2

17.9

7.0

16.8

8.0

15.3

Quite unlikely

26.3

23.9

24.5

25.1

26.8

24.9

Very unlikely

52.0

45.0

62.5

44.7

56.0

46.5

Source: Eurofound, European Quality of Life Survey 2012

Table 1.12 Likeliness to find a job with similar salary in case of losing current job
  18-24 years 25-30 years All ages
  Malta EU27 Malta EU27 Malta EU27

Very likely

9.6

19.1

4.8

16.9

6.2

13.0

Quite likely

22.4

33.6

17.6

31.7

14.4

25.7

Neither likely nor unlikely

23.2

16.7

31.4

18.0

23.3

16.8

Quite unlikely

33.9

20.6

32.9

19.6

35.8

22.9

Very unlikely

10.9

11.5

13.3

13.8

20.2

21.6

Source: Eurofound, European Quality of Life Survey 2012

1.2 Skills development

Investment in skills development in Malta is slightly higher compared to EU levels. According to the European Working Conditions Survey of 2010, 36.4 per cent of Maltese workers under 30 years of age received training paid for by the employer (EU27 - 33.1 per cent). This is five percentage points more compared to the total labour force.

1.3 Health and well being

Maltese youth workers in general seem to lead a stressful life compared both to older co-national workers and European peers (see table 1.3). This can be attributed to the fact that only 20 per cent of those under 30 years of age have little work deadlines, when in Europe the figure goes up to 40 per cent (EWCS, 2010). Nevertheless, Maltese workers do not seem to bother about it since for 96.7 per cent of them, work gives them enough satisfaction compared to just 79.4 per cent in the EU27 (EWCS, 2010).

This well-being at the work place may be attributed to the fact that workers receive help from their colleagues (Malta 88.2 per cent vs EU27 75.4 per cent). Also, the majority of Maltese workers – 59.8 per cent – claim that their pace of work depends on that of their colleagues contrary to the 44.2 EU27 per cent (EWCS, 2010). Other factors that may contribute to this positive feeling are less exposure to repetitive tasks (Malta 34.2 per cent vs EU27 36.3 per cent), and less direct dealing with people (Malta 41.3 per cent vs EU27 49.6 per cent), (EWCS, 2010).

Table 1.3: Stress due to work-life balance issues

 

18-24 years

25-30 years

All ages

 

Malta

EU27

Malta

EU27

Malta

EU27

At work and at home

4.7

9.6

18.2

14.4

16.1

13.3

Either at work or at home

50.0

42.4

52.7

44.8

51.3

44.0

Little or no stress

45.2

48.5

29.1

40.7

32.6

42.7

Source: Eurofound, European Quality of Life Survey 2012

1.4 Reconciliation of working and non-working life

Despite that young Maltese workers seem to be happier at the workplace, employers still prefer to adhere to management by supervision approach. Work flexibility is still at its infancy. In fact according to table 1.4, less than a third of Maltese workers are able to set their own starting and finishing time, compared to more than 40 per cent in the EU27. This seems to have a direct effect on the work-life balance of Maltese workers as 22.7 per cent of young workers claim to have difficulties in finding the right balance between work and family. This is in contrast with the 17.0 per cent who reiterate a similar claim in the EU27 (EWCS, 2010).

Table 1.4: Ability to set own starting and finishing time
  18-24 years 25-30 years All ages
  Malta EU27 Malta EU27 Malta EU27

Yes

26.0

40.3

32.5

43.9

31.7

44.6

No

74.0

59.7

67.5

56.1

68.3

55.4

Source: Eurofound, European Quality of Life Survey 2012

Block 2: Identification and characterisation of existing differences in working conditions within the group of young entrants to the labour market in your country

NCs are kindly requested to provide the most updated information (coming from national surveys, administrative registers or ad-hoc national researches/studies) on differences of working conditions within the group of young entrants to the labour market, for a series of variables. Please provide the information only for those variables where significant/important differences, either positive or negative, can be identified, stressing the causes and rationale of these differences

Suggested extension of this section: around 600 words

2.1 Personal characteristics of young entrants

The Maltese economy proved quite resilient to the crises as the labour market continued to generate jobs. Nevertheless, Malta’s labour market is slowly starting to resemble the EU27 labour market. Economic flexibility is disproportionately effecting youths in contrast to the workforce at large. Maltese youths face the same degree of involuntary part-time as EU27 youths, a similarity that does not hold for the entire Maltese labour force (see table 2.1).

Although Malta boasts of a high employment ratio among those of young age, not the same can be said for the entire labour force where Malta holds the 21st position from last among the EU27 Member States (Eurostat, LFS 2013). The low employment rate is attributed to the low female participation among those aged over 40 years, hence the low presence of involuntary part-time among females of older age. This pattern however does not hold for females of young age who seem to experience higher involuntary part-time relative to males (see table 2.1).

Malta’s labour market is developing into a two-tier system where those of young age with limited skills stand to face a higher probability of taking on a job with lower work conditions compared to an older person with similar skills.

There are no particular studies that hint at different work conditions in Malta because of gender issues. Nevertheless, Maltese females stand a better chance than males to have a job with good working conditions. This is attributed to the fact that females outperform males in education attainment. As shown in table 2.2, Maltese females outperform males by nearly 10 percentage points – nearly double the gap in the EU27 (see table 2.2).

Table 2.1: Involuntary part-time (%)
    15-24 years 15-64 years
    2008 2009 2010 2011 2008 2009 2010 2011

Malta

Males

:

:

33.4

25.2

26.8

23.6

33.1

25.3

Females

32.6

34.5

27.8

31.2

12.7

12.8

14.0

12.7

Total

29.0

29.3

30.0

28.5

16.1

15.8

19.3

16.2

EU27

Males

22.1

24.3

26.5

27.2

32.4

34.1

36.1

36.5

Females

28.1

27.7

29.8

28.6

23.3

22.9

24.0

23.1

Total

25.7

26.3

28.4

28.0

25.3

25.3

26.7

26.1

Source: Eurostat, Labour Force Survey

Table 2.12: Persons with upper secondary or tertiary education attainment (%) - 20-24 years
    2008 2009 2010 2011 2012

Malta

Males

46.5

49.7

47.0

52.9

57.3

Females

56.0

57.5

60.8

66.5

65.4

Total

51.1

53.3

53.3

59.2

61.3

EU27

Males

75.6

75.9

76.3

76.6

77.3

Females

81.4

81.4

81.8

82.3

82.9

Total

78.5

78.6

79.0

79.5

80.0

Source: Eurostat, Education

2.2 Occupational characteristics

It is very difficult to analyse work conditions in Malta by size class of firms since 97 per cent of all business units employ less than 10 workers (NSO, 2012). Just 0.1 per cent of all business units are considered to be large firms.

Table 2.2 indicates the changes in employment levels by economic sector over the crisis period. On average the economy generated 1.5 per cent more jobs per year. Although every economic sector offers new opportunities for new entrants, not all economic sectors are expanding. In fact, Manufacturing, Construction, Wholesale and Retail and Transport and Storage have either decreased or kept the same employment levels. Implicitly this means that almost 40 per cent of the economy did not grow enough to take on additional workers.

On the other hand, Public Administration, Education and Health Services, which are predominantly public-sector oriented sectors accounted for the biggest increase in employment levels – 7,500 persons. Equally significant is the addition of 5,400 workers in Information and Communication, Professional, Technical and Service Activities, and Arts Entertainment and Recreation (mainly i-gaming activities). Between them, these sectors account for another 40 per cent of the economy.

The economic sectors per se give a clear indication of how the labour market is evolving. The former group which mainly provides jobs to unskilled or semi-skilled workers is shrinking, while the latter group which seeks skilled workers is on the rise. By and large, these numbers confirm the prevailing work conditions, where the latter group of economic sectors offers better work conditions relative to the former group.

Table 2.2: Employment (‘000s)

 

2008

Q2-Q3

2012

Q2-Q3

Change

Total - All NACE activities

160.5

170.3

9.8

Manufacturing

23.5

22.5

-1.0

Construction

12.2

10.8

-1.4

Wholesale and retail trade; repair of motor vehicles and motorcycles

24.4

24.3

-0.1

Transportation and storage

9.7

9.7

0.0

Accommodation and food service activities

13.7

14.4

0.7

Information and communication

6.5

7.9

1.5

Financial and insurance activities

6.6

6.9

0.3

Professional, scientific and technical activities

4.9

6.8

2.0

Administrative and support service activities

4.7

4.5

-0.3

Public administration and defence; compulsory social security

13.9

16.0

2.1

Education

13.6

15.8

2.2

Human health and social work activities

12.6

15.8

3.2

Arts, entertainment and recreation

2.3

4.2

1.9

Other service activities

3.1

3.7

0.6

Source: Eurostat, National Accounts

Block 3: Evolution of working conditions of young entrants to the labour market in the last five years. Effects of the economic crisis

NCs are kindly requested to provide information on the following items: NCs are kindly requested to provide information (coming from national surveys, administrative registers or ad-hoc national researches/studies) on differences of working conditions amongst the group of young entrants to the labour market in comparison to the situation five years ago. Please provide the information only for those variables where significant/important differences, either positive or negative, can be identified, stressing the causes and rationale of these differences

Suggested extension of this section: around 500 words

3.1 Please provide information on the evolution of working conditions of young labour entrants in the last five years. Have working conditions of this group improved/deteriorated in comparison to the existing situation five years ago (before the economic crisis began)? What are the reasons for these changes

There have been no particular studies that traced work conditions over the crisis period, yet labour market performance is a good indicator of the prevailing situation. Strong labour demand sustains work conditions as employers compete to employ or retain the best candidates. Hence, in general, high employment ratios together with low unemployment are the perfect nexus for the upkeep of good working conditions. In 2012, Malta had the second highest employment ratio – 82.7 per cent – among the EU Member States for the 25-29 age cohort, while as indicated in table 3.1, unemployment among youths is substantially lower compared to the EU27 average. Although youth unemployment increased marginally over the crisis period, this compares very well with the increases registered across the EU27. This explains why in general work conditions in Malta have retained ground.

Nonetheless, it is also true that the issue of precarious jobs started to gather momentum during the past five years. The General Workers Union (GWU), Malta’s biggest trade union, hints that work conditions for certain jobs such as carers, security officers and cleaners, have been deteriorating (ToM, 2011). Although there are no official statistics that support such claim, Eurostat’s Labour Force Survey indicates an increase in jobs with unsocial hours (table 3.12) and almost a double increase in temporary employment (table 3.13).

While work carried during unsocial hours is at par with EU27 level, temporary employment is half the EU27 rate. The increase in work during unsocial hours hit Maltese males disproportionately – an increase of 7.5 percentage points – leaving the female rate unchanged over the period under observation. Although there are no apparent reasons for this, in part a tentative explanation can be attributed to a lower education achievement among males.

Although as explained above, job creation was not an issue during the crisis years, table 3.14 indicates that the economy is creating more temporary jobs relative to permanent jobs. This explains why the number of temporary working persons seeking permanent jobs increased by 3 percentage points, up to 7 per cent (see table 3.14). Hence, though youths still manage to find work, it may be inferior to their expectations.

Table 3.1: Unemployment Rate (%)
    15-24 years 25-29 years 15-64 years
    2008 2012 2008 2012 2008 2012

Malta

Males

14.3

14.1

:

:

5.7

5.9

Females

9.9

15.2

:

:

6.6

7.3

Total

12.1

14.6

:

6.9

6.0

6.5

EU27

Males

15.2

23.3

8.0

13.6

6.5

10.5

Females

15.4

21.8

8.9

13.7

7.5

10.5

Total

15.3

22.6

8.4

13.7

7.0

10.5

Source: Eurostat, Labour Force Survey

Table 3.12: Working Unsocial Hours (%) - 15-24 years
    2008 2009 2010 2011

Malta

Males

16.8

21.8

20.7

24.3

Females

15.8

16.2

14.7

15.2

Total

16.3

19.3

18.0

20.3

EU27

Males

17.7

17.3

18.7

18.3

Females

19.8

19.6

20.9

21.0

Total

18.7

18.4

19.7

19.6

Source: Eurostat, Labour Force Survey

Table 3.13: Temporary Employment (%) - 15-24 years

 

 

2008 2009 2010 2011

Malta

Males

9.1

10.8

13.7

17.9

Females

9.2

12.0

15.9

17.6

Total

9.2

11.3

14.7

17.8

EU27

Males

39.7

40.0

42.0

42.3

Females

40.7

40.8

42.2

42.6

Total

40.2

40.4

42.1

42.4

Source: Eurostat, Labour Force Survey

 Table 3.14 Reasons for Temporary Employment (%) – 15-24 years

 

  2008 2011

Malta

Could not find permanent job

4.1

7.0

Did not want a permanent job

1.6

2.1

In education or training

1.6

4.2

Probationary period

1.9

4.5

EU27

Could not find permanent job

14.6

15.6

Did not want a permanent job

6.0

6.1

In education or training

16.1

17.1

Probationary period

3.5

3.7

Source: Author’s calculations based on Eurostat, Labour Force Survey

3.2 Based on possible existing prospective studies, please provide information on the expected evolution of employment levels and working conditions of young labour market entrants in your country in the near future (coming 2-3 years)

The trends described above are set to continue to propagate in the years ahead. Since the Maltese economy is fully exposed to market forces, it is only natural that work conditions start to evolve in a similar way as it is happening in mainland Europe.

Work conditions are set to continue to improve for those who own the necessary skills required from the expanding economic sectors, i.e. financial services, professional services and health sector. On the other hand, low skilled persons are likely to end up with inferior work conditions relative to the former group. This is because the economic sectors would struggle to grant additional work conditions over and above the statutory wage increases. Hence in the years to come, work conditions and employment opportunities for the low skilled are likely to decrease as opposed to the prospects that skilled persons are likely to benefit from.

Block 4: Initiatives taken by national governments/social partners in order to improve employment levels and working conditions of young entrants to the labour market

4.1 Identify main recent national measures/initiatives (1-2) put in place in your country by public authorities in order to improve employment opportunities and working conditions for young entrants to the labour market.

Through the Employment and Training Corporation (ETC), during the past five years government enacted various ad hoc measures intended to ease the transition of youths into the labour market. The measure which addressed the highest number of beneficiaries was the Employment Aid Programme (EAP). Indeed, the EAP is the most extensive ‘employment incentive scheme’ administered by ETC so far. Between May 2009 and March 2012, an average of €12.6 million had been spent, out of which €8.2 million were co-financed by the European Social Fund. Due to the extensive number of beneficiaries, in May 2012 this particular scheme was temporarily suspended as the allocated funds had been used up (Maltatoday, 2012).

This programme was intended to facilitate access to employment for the disadvantaged not in possession of work experience or who might have been out of work for a long time. Employers who took on youth under 25 years and within 2 years of completing full-time education and have not yet obtained a first regular paid employment (6 consecutive months) after completing their studies, benefitted from a 50 per cent subsidy on wage cost and employers’ national insurance contribution (ETC, 2011). The subsidy lasted for 52 weeks (ETC, 2011). As highlighted by Parliamentary Question 32553, there were 2,383 participants up to the first week of March 2012.

Profiling analysis of beneficiaries conveys that the 16-24 age cohort represented 52.1 per cent of total beneficiaries, followed by the age cohort of 25- 39 years of age (22.8 per cent). Over the three year period of the programme, the employment retention rate was 87 per cent.

Although the measure was successful, ETC did not carry out studies to analyse whether beneficiaries could have found a job without resorting to the subsidy scheme.

All employers qualified for the scheme, irrespective of the type of work and conditions on offer as long as these satisfied the minimum legal requirements.

4.2 Identify main recent initiatives (1-2) put in place in your country by social partners (either at national, sector or company level) in order to improve working conditions amongst young entrants to the labour market.

The Malta Workers’ Union (UHM), which happens to be Malta’s second largest trade-union, on the 22nd of January of 2013 managed to rally a national consensus – all social partners and political parties are in agreement – to its JOBS+ policy. JOBS+ is an initiative which seeks the implementation of a national holistic and perpetual active labour market policy. So far, governments implemented sporadic labour market programmes subject to funding availability. This way of doing, is set to change for the better as the signatories of the policy pledged further resources.

JOBS+ is intended to channel current and future resources into the most productive forms of training. To ensure the best outcome, social partners will be actively involved in the manning of the policy itself through an ad hoc committee responsible from the implementation.

During the past decade, the Maltese economy mainly grew as a result of more persons joining in the labour market. Productivity growth was the third lowest in the European Union (Caruana and Theuma, 2012). This of course led to stagnant working conditions in certain economic sectors that depend on unskilled labour namely, Wholesale and Retail, Transport and Storage and Hotels and Restaurants (Caruana and Theuma, 2012).

One way of addressing this productivity shortcoming is through additional investment in workers’ skills. The improvement in labour quality will eventually lead to new productive investment which offers better working conditions. The creation of new skills and better working conditions creates in itself a ripple effect on the economy. To retain their workforce, all economic sectors would have to gradually improve their working conditions otherwise they stand to lose their bargaining power in attracting the best talent.

JOBS+ will be addressing all this through additional resources – at least 0.5% of GDP more by 2020 – that will be spent on training, in particular on those youths who do not own the necessary skills after terminating compulsory schooling. Moreover, JOBS+ will also cater for future demand for labour as new mechanisms will be set up to evaluate future job prospects such that tomorrow’s youth can be better trained.

Commentary by the NC

As outlined above, during the recent past, the issue of deteriorating working conditions started to feature in the political lexicon. The fact that the economy is no longer protected through tariff barriers and government intervention, means that employers now must rise up to the challenge of facing market competition. Since Malta is a small open economy, it is understandable that price-competitiveness is a top priority. For this reason, in certain economic sectors working conditions are stagnant or slowly regressing.

The political response to this is additional investment in the human capital. It is only through the amelioration of the human capital factor that tomorrow’s youths stand to benefit from improved working conditions.

Clyde Caruana, Centre for Labour Studies - University of Malta

References:

Useful? Interesting? Tell us what you think. Hide comments

Add new comment