Public sector not driving job growth

Malta and Italy the only two EU member states where public sector dependency has not increased.

In its annual report on employment for 2023, the European Union research foundation, Eurofound, noted that it was only in Malta and Italy that employment dependency on the public sector did not increase between 2008 and 2023. Across the Union, reliance on the public sector conversely rose from 22.9% in 2008 to 25.8% last year.

In fact, Eurofound noted that the public sector was the sector that generated the most employment across the Union in this period, so much so that while in 2008 Malta had a rate of dependence on the public sector that was above the European average, it is now below the average. This comes as countries that in 2008 had a lower public sector employment share than in our country, including Austria, Portugal, Ireland, and Germany, ended 2023 at a higher rate.

This analysis negates the narrative that a large part of the increase in employment in Malta in recent years stemmed from growth in the public sector. In reality, the situation in Malta is the same as it was in 2008 and stands in stark contrast to what happened in the countries around us.

It is worth recalling that, due to an ageing population, the trend around the developed world is for a gradual increase in employment in the health and care sector, which are financed by the public sector. In Malta, despite a sharp increase in employment in these fields, an increase in employment in several other sectors made up for it.

Another interesting development that emerges from Eurofound’s independent report is that most of the increase in employment in Malta has been in quality jobs. In fact, Eufound indicates that the employment of middle-income wage earners increased by around 20,000 between 2011 and 2023. Looking at those earning well above the average wage, according to Eurofound there has been an increase of almost 65,000 against an increase of around 40,000 in those earning less than the average wage. This means that the increase in the number of workers earning the average wage and more was well over twice the increase of those earning below the average wage. Meanwhile, the average wage has increased considerably in the same period.

Even when it comes to reliance on the construction sector, the Eurofound report indicates that it has decreased.

Photo: Andrea Piacquadio

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