The liberal labour market strategies of the past decade have been characterised by the substantial importation of third-country nationals (TCN) with varying skill levels and qualifications to promote economic growth. This growth came at a considerable cost to the economy’s longer-term prospects and the community’s well-being.
With growing popular discontent about the effects of a significant increase in population on our health, education, traffic, and infrastructure, the government has come up with a revised labour market plan. This plan aims to correct some of the more adverse consequences of the mass importation of TCNs. It seeks to ensure that only essential workers will be granted a working permit, that foreign workers will be treated fairly and that local workers will be prioritised.
Social partners have generally welcomed the policy document. Undoubtedly, a plan that aims to rationalise the importation of labour is much better than one driven by laissez-faire, ignoring the adverse consequences of a market driven by unscrupulous employers and agencies.
The Malta Chamber, one of the leading business lobbies, welcomed the new Labour Migration Policy.
However, it warned that fewer people needed to be employed in the public sector for the strategy to be effective. It also recommended “more incentives for upskilling and reskilling, and more support for investment in digitalisation to improve productivity”.
The chamber’s recommendations make sense. The public sector is still way overstaffed, depriving private industry of a pool of local workers who could help create wealth by producing goods and services that can be traded. This is not a new phenomenon. Political parties have used employment in the public sector for decades in the context of a clientelist political mindset.
The government will improve its chances of being perceived as credible in addressing the overpopulation challenge if it commits itself to reducing the number of public sector workers who are underemployed or counterproductive.
Political parties have used employment in the public sector for decades in the context of a clientelist political mindset
The Labour Migration Policy proposals would be more effective had they been supported by a manpower survey establishing the labour required by various sectors of the economy for the next decade. This would have avoided sterile debates by the stakeholders on what economic and social sectors are essential.
Ensuring sufficient workers for health and other infrastructural services must indeed be given a top priority by policymakers.
The chamber insists that all labour market policies must be aligned and fully integrated into the Malta Vision 2050 “to ensure a holistic and long-term strategy for the nation’s workforce and sustainable economic growth”.
Too much time has been wasted discussing whether the country needs a new economic model.
For all the rhetoric, it's evident that the country will remain dependent on low-skilled imported labour to sustain its mass-tourism business model, at least in the medium term. The new labour migration policy offers only limited solutions for this sector, with the authorities and operators reluctant to take risks is such an important sector.
Policymakers must address how best to optimise investment for economic growth and people’s well-being in the context of the country’s obvious physical limitations.
The business community must also do its part to effectively address the challenge of overpopulation. Treating labour, whether imported or local, as a commodity that can be hired and fired easily is wrong. Investing in human capital will shift the focus from maximising profits to hardwiring sustainability in business strategies.
Like most Western countries, Malta must urgently deal with evolving technological developments, the green transition, macroeconomic and geo-economic shifts and demographic changes that are driving transformation in the labour market, reshaping both jobs and required skills.