Low unemployment rate may be ‘a strategic problem’, not ‘economic achievement’ – Farsons CEO

Farsons Group CEO Norman Aquilina took to social media to comment about Malta’s attitude towards its low unemployment levels, suggesting that such numbers might be indicative of an underlying problem.

“While locally some seem more inclined to sit back and chest thump on the record-low unemployment levels, simply assuming that this is a reflection of our economic success, other countries, such as Denmark, have recognized that going forward this is more of a strategic problem than an economic achievement and needed attention,” Mr Aquilina wrote.

According to the latest numbers from the National Statistics Office (NSO), 3.4 per cent of Malta’s eligible population registered unemployment in December 2021 – the same rate registered the previous month.

Malta’s youth unemployment rate (covering those aged 15 to 24) stood significantly higher, with 8.7 per cent of said demographic registering for unemployment.

“An increasing number of Danish businesses had been reporting that labour shortages were limiting production, citing risk that wage growth could exceed the country’s forecast of three per cent this year, thus eroding competitiveness,” Mr Aquilina noted.

“As a result, the Danish government responded, securing the political backing for measures to boost economic growth by tackling the labour shortages that were broadly recognized as threatening to derail their economic rebound,” he continued.

The Farsons CEO highlighted that unemployment in Denmark fell to a 13-year low of 2.3 per cent in November, whilst new vacancies rose to a record high.

In light of this issue, the deal in question is set to “cut jobless benefits for fresh graduates and boost incentives for seniors to remain in the workforce,” Mr Aquilina described.

“The deal will also temporarily alleviate conditions for foreign workers to help address labour scarcity in the next two years,” he concluded.