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The Social and Employment Situation in Malta

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The Social and Employment Situation in Malta DIRECTORATE GENERAL FOR INTERNAL POLICIES POLICY DEPARTMENT A: ECONOMIC AND SCIENTIFIC POLICY The Social and Employment Situation in Malta STUDY Abstract This document was provided by Policy Department A at the request of the Committee on Employment and Social Affairs. It gives an overview of the social and employment situation in Malta with a focus on indicators including social assistance and pension systems, social and employment legislation and policy, and about the inflow and integration of refugees, including tabulated data on these key topics. IP/A/IP/A/EMPL/FWC/2013-021 October 2016 PE 587.323 EN This document was requested by the European Parliament's Committee on Employment and Social Affairs AUTHOR(S) Mario VASSALLO, University of Malta RESPONSIBLE ADMINISTRATOR Stefan SCHULZ EDITORIAL ASSISTANT Irene VERNACOTOLA LINGUISTIC VERSIONS Original: EN ABOUT THE EDITOR Policy departments provide in-house and external expertise to support EP committees and other parliamentary bodies in shaping legislation and exercising democratic scrutiny over EU internal policies. To contact Policy Department A or to subscribe to its newsletter please write to: Policy Department A: Economic and Scientific Policy European Parliament B-1047 Brussels E-mail: [email protected] Manuscript completed in October 2016 © European Union, 2016 This document is available on the internet at: http://www.europarl.europa.eu/studies DISCLAIMER The opinions expressed in this document are the sole responsibility of the author and do not necessarily represent the official position of the European Parliament. Reproduction and translation for non-commercial purposes are authorised, provided the source is acknowledged and the publisher is given prior notice and sent a copy. The social and employment situation in Malta CONTENTS LIST OF ABBREVIATIONS 4 LIST OF FIGURES 5 LIST OF TABLES 5 EXECUTIVE SUMMARY 7 1. RECENT DEVELOPMENTS IN EMPLOYMENT AND SOCIAL AFFAIRS 9 1.1. The Maltese economy 9 1.2. Employment and unemployment in Malta 10 1.2.1. Long-standing issues 12 1.3. Social well-being 14 1.3.1. Social transfers 18 2. OVERVIEW OF SOCIAL AND EMPLOYMENT LEGISLATION AND POLICY 2.1. Legislation and policy measures aiming to reduce youth unemployment and 23 long-term unemployment 2.1.1. Youth unemployment 23 2.2. Legislation and policy measures to improve inclusion of most deprived groups 25 2.3. Implementation of the European Social Fund (ESF) and the Fund for European Aid to the Most Deprived (FEAD). 26 2.3.1. European Social Fund (ESF) 26 2.3.2. Fund for European Aid to the Most Deprived (FEAD) 26 3. INFLOW AND INTEGRATION OF REFUGEES 28 3.1. Immigration inflows 28 3.2. Integration policy 29 3.3. Current challenges 29 3.3.1. Medical care for migrants 29 3.3.2. Migrants and childcare 29 3.3.3. Public debate 29 REFERENCES 31 ANNEX 1 34 ANNEX 2 35 PE 587.323 3 Policy Department A: Economic and Scientific Policy LIST OF ABBREVIATIONS AROP At risk of poverty ESF European Social Fund EU European Union FEAD Fund for European Aid to the Most Deprived FES Foundation for Educational Services LTU Long-term unemployment NEET Not in Employment, Education or Training NGO Non-governmental Organisation NMW National Minimum Wage NSO National Statistics Office SILC Statistical survey on income and living conditions SMD Severe Material Deprivation JRS Jesuit Refugee Service - Malta 4 PE 587.323 The social and employment situation in Malta LIST OF FIGURES Figure 1: Unemployment trends in Malta July 2013 – July 2016 9 Figure 2: Malta Youth Unemployment Rate 2015-2016 23 Figure 3: Origin of asylum seekers in Malta (January - August 2016) 28 LIST OF TABLES Table 1: The Maltese Economy 2011-2015 9 Table 2: Labour Statistics – Malta 11 Table 3.1: At risk of poverty and social exclusion: Percentage of total population 14 Table 3.2: At risk of poverty and social exclusion: Percentage of total male population 15 Table 3.3: At risk of poverty and social exclusion: Percentage of total female population 15 Table 3.4: At risk of poverty and social exclusion: Percentage of total population aged less than 16 15 Table 3.5: At risk of poverty and social exclusion: Percentage of total population aged 65 years and older 16 Table 4.1: Severe Material Deprivation rate for the 'Economic strain' and 'Durables' dimensions: Percentage of total population 16 Table 4.2: Severe Material Deprivation rate for the 'Economic strain' and 'Durables' dimensions: Percentage of population aged less than 16 years 16 Table 4.3: Severe Material Deprivation rate for the 'Economic strain' and 'Durables' dimensions: Percentage of population aged 65 years and older 16 Table 5.1: At-risk-of-poverty rate before social transfers (pensions excluded from social transfers) by household type: Total 18 Table 5.2: At risk of poverty rate (cut-off point: 60% of median equivalised income after social transfers): Total 18 Table 6.1: At-risk-of-poverty rate before social transfers (pensions excluded from social transfers) by household type: Single Person 19 Table 6.2: At risk of poverty rate (cut-off point: 60% of median equivalised income after social transfers): Single Person 19 Table 7.1: At-risk-of-poverty rate before social transfers (pensions excluded from social transfers) by household type: One adult 65 years or over 19 Table 7.2: At risk of poverty rate (cut-off point: 60% of median equivalised income after social transfers): One adult 65 years or over 20 Table 8.1: At-risk-of-poverty rate before social transfers (pensions excluded from social transfers) by household type: Single person with dependent children 20 Table 8.2: At risk of poverty rate (cut-off point: 60% of median equivalised income after social transfers): Single person with dependent children 20 Table 9.1: At-risk-of-poverty rate before social transfers (pensions excluded from social transfers) by household type: Households with dependent children 21 Table 9.2: At risk of poverty rate (cut-off point: 60% of median equivalised income after social transfers): Households with dependent children 21 PE 587.323 5 Policy Department A: Economic and Scientific Policy Table 10: Malta Youth Guarantee Implementation Plan: Summary of Initiatives 24 Table 11: Beneficiaries of the FEAD Programme – April 2016Error! Bookmark not defined.27 6 PE 587.323 The social and employment situation in Malta EXECUTIVE SUMMARY • The Maltese economy is currently going through a very positive period, and growing very fast as a result of a combination of factors, ranging from domestic consumption to foreign investment. o Unemployment has declined substantially and foreign workers from a number of EU states and third countries are settling in Malta in view of the employment opportunities available. o Migration from third countries, particularly from the sub-Sahara region, has dwindled as ‘boat’ people prefer to seek refuge in mainland Europe rather than stop in Malta. However, Malta is currently experiencing an influx of refugees from places like Syria, who are escaping the difficult situation in their country. • Youth unemployment has also registered a decline, and in this area Malta is doing better than EU28. This is essentially the fruit of a policy to ensure that school leavers have the necessary skills to take up employment. Problems persist since school leavers are not always equipped with the right skills for gainful employment and early school leaving remains a major concern. • In Malta one does not witness poverty on the streets, but it does exist. In recent years, major efforts have been undertaken to reduce both the at-risk-of-poverty levels and the material deprivation levels, with an element of success. The two most at-risk groups are single mothers and the elderly. o A number of initiatives to assist the first group to move into the economy, primarily through free childcare for those working or undergoing training, are bearing positive results. o Similarly the very recent changes in the minimum state pensions have pushed many up the scale rather than further down, especially as the cost of rents increases. • In this sphere the role of transfer payments cannot be underestimated: many Maltese have come to depend on them, and it is hoped that there will never be any need to reduce them since, as an ex-Prime Minister recently commented, one has to be wary of their eventually becoming too heavy a burden to carry. o Even so, pensions remain low, and although a contributory ‘two-thirds’ pension scheme exists, in reality the two-thirds label is a fiction since the pension is capped at a very low level. o In view of this, an effort is being made to encourage people in the private sector to continue working beyond the official retirement age. o Paradoxically these incentives are denied to workers in government service or to those working in institutions that have a government interest. • Malta has benefited substantially from EU funds and sizable amounts have been dedicated to projects aiming to improve skills and benefit disadvantaged persons. The Maltese have participated very actively in projects and one can easily see that in various areas ESF funds have had positive effects. • The elderly in particular are being offered support from EU funds to remain in the community rather than retire to a home through a special project in which the government part-pays for the services of a qualified live-in carer. PE 587.323 7 Policy Department A: Economic and Scientific Policy o The FEAD fund has also been tapped. Its implementation was delayed for a number of years, and the criteria on which it was to be implemented were questioned. o It has now been deployed and benefits that layer of Maltese society who are suffering from material deprivation, particularly families with young children and the elderly who are unable to cope on their own.
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