The Labour Force Survey for the second quarter of 2021 confirms that the economic recovery is not just putting down firm roots, but also that it is benefitting mostly those with average- to below-average earnings.
In the second quarter the average monthly salary was €1,608. This marked a rise of 7% compared with the same time last year. This occurred at a time when inflation averaged 0.6%, which means that the increase in wages was ten times the rise in the cost of living. In contrast in 2012, the last year under the previous administration, the average wage had risen by only 1.9%, at a time when inflation was 2.4%, which means that in purchasing power of wages was falling. Since the change in administration in 2013, the average wage has risen by more than €280 per month or nearly a quarter higher.
The pandemic marked a temporary break from rising wages, but the Labour Force Survey clearly shows that wage growth is back on track. More interestingly, and in stark contrast with other periods, the rise in wages is more pronounced when one focuses on those with average and below-average wages. The average manager got a raise of 0.2%, while a clerk on average saw an increase of 10%, or fifty times higher. Similarly, those in elementary occupations experienced a rise of 5%, or twenty-five times higher than that of a manager, in relative terms.
In the second quarter the average monthly salary was €1,608. This marked a rise of 7% compared with the same time last year.
While the pandemic affected wages, it did little to halt the inexorable rise in our employment rate. In the second quarter of 2021 our country had an employment rate of 74.4%. This is the highest rate ever recorded in this quarter since these statistics began to be compiled and means an increase of 15 percentage points from the last year of previous administration.
Consequently, Malta’s employment rate continued to exceed that in the EU. Before the change of Government in 2013 there was a gap of almost 5 percentage points between Malta and the EU; a gap that experts had predicted would remain for several decades, and which has now turned into a surplus for our country of more than 5 percentage points.
In the second quarter of 2021, employment was 8,317 more than a year earlier and the workforce was more than 266,000 people, or an increase of 98,000 people or 58% on 2012 figures. This increase in contrast to what occurred under the previous administration was almost all in full-time jobs. Women are those who are most benefiting from this trend increase in employment. While before the change in Government in 2013 only 44% of women had a job, this proportion has now risen to 66%.
The counterpart of the inexorable rise in employment is that the unemployment rate fell to 3.5% in the second quarter of 2021 when at the same time in 2012 it was more than 6%, or almost double. Malta remains the Euro area with the second-lowest unemployment rate. If one adopts a more comprehensive measure of unemployment, that takes into account involuntary part-time and reduced hours, Malta is the country closest to full employment in the euro area.
