Populist Work Promises May Destabilise the Labour Market

Political Parties Urged to Avoid Unrealistic Proposals Amid Worker Shortages

As the Islands approach a general election, in the scenario of an acute shortage of workers, the Malta Employers’ Association calls on political parties to remain vigilant against unsustainable populist promises. 

The Association is following developments closely and has noted certain suggestions for the implementation of more favourable working conditions in the public sector.  These risk further intensifying a two-tier system following developments whereby government has committed to matching the second-pillar pension contribution of its employees.

By its nature, the public sector is not subject to the commercial pressures that drive efficiency and innovation in the private sector. As Malta-based undertakings strive to compete in the global village, it is vital that national policies reflect a balanced approach, ensuring that the public sector does not become a shelter for inefficiency or inflexibility at the expense of the country’s competitiveness.

Malta Employers is concerned that the disparity in working conditions could erode morale within the private sector, leading to further loss of talent from the productive private sector, to the detriment of Malta’s competitiveness. 

Other proposals for flexible working arrangements were noted which give less credit to potential productivity losses.  In the opinion of Malta Employers, such proposals are fundamentally unsustainable because when productivity declines, the need arises for more labour, necessitating a larger workforce to maintain a stable level of service and outputs. In the current climate of acute worker shortages, such proposals are not only impractical but risk exacerbating the supply-side challenges, which will almost inevitably lead to greater numbers of imported workers.  This would run counter to current national policy objectives aimed at ensuring sustainable population growth.

Experience from other EU countries illustrates the risks of implementing populist work policies without due consideration for economic realities.  In certain countries, trials of the four-day working week resulted in significant productivity losses and operational challenges. These policies were subsequently reversed or modified after failing to deliver expected benefits and placing undue pressure on both employers and employees.

Proposals that disregard the realities of productivity and labour market dynamics risk creating unsustainable working conditions and false expectations that will ultimately harm both the workforce at large and the broader long-term national interest.  Malta Employers firmly believes that employment policies must promote equity and cohesion across all sectors to ensure a fair and robust labour market.

ENDS

10 October 2025