Employment in the Maltese wearing apparel industry : recent trends and future prospects

Abstract

hi the 1970s the wearing apparel industry experienced a boom in Malta employing about 37 percent of the gainfully occupied. However, over the past years the wearing apparel industry experienced a downward trend bringing with it redundancies for the Maltese employees. High wages are the main reason for the shift of location in the developing countries. Moreover, by the end of 2005, all quotas were eliminated under the Agreement on Textile and Clothing leaving the industry more vulnerable to competition. However, some regional tariffs and bilateral agreements still exist. The study provides a time-series analysis of labour demand in the Maltese wearing apparel and also presents an insight in comparing Malta's wages relative to developing countries but data limitation were encountered. Labour demand was investigated by analysing the wage rate, net-value added, technology and also taking into consideration Malta's entry in the European Union. The study finally highlights the possible reasons for the lack of success of the wearing apparel industry and the on-going decrease in employment in this industry.