More workers

It is not only an issue of numbers but crucially whether those numbers will be highly trained, skillful, and flexible workers.

Labour and skill shortages have become a pressing social policy challenge that is impacting upon the productivity and competitiveness of employers of all sizes and across differenet sectors. Ultimately, when they combine together, they create a bottleneck to economic growth and prosperity. It is no coincidence that this problem was quoted by the European Commission when it announced that Malta and six other member states would be subjected to an Excessive Deficit Procedure.


It is ironic that, at a time when there is a record level of employment and unemployment is at historically low levels, we can’t simply enjoy the situation and have to worry about an insufficient workforce or adequately skilled workers in the future. Yet, there is a perfectly reasonable reason why we should do so. It is the fact that the demographic situation will lead to a decrease of several thousand workers as the population ages, both in the EU at wide and in Malta.


In Malta we have a ministry dedicated to active ageing. It was a sign of good foresight. We have had several cross-sectoral initiatives designed to extend the working lifes of seniors beyond retirement age. To some extent, we have seen a number of good results. But it is nowhere near enough.


The chart shows what happens to the percentage employment rate for different age categories of workers. Up to age 54, the rate is 88.6%, but after age 55 it drops rapidly by almost one-third to 56.5%. It collapses to 13.4% for the 65-69 age bracket and halves to 7.2% for those aged 75 years and over. The female employment rate is even worse.


The potential for additional workers is considerable. If we were to improve the employment rate of persons in the 55-64 year bracket by just 3.5%, there would be an additional 35,520 workers. Doubling the very low percentages in the 65-69 and 70-74 age brackets would see 11,540 workers rejoin the workforce.


We seem to have done a good job as far as offering flexible work arrangements to accommodate the needs of workers, especially women, at the beginning of their working lives and professional careers, most notably by childcare provision, flexible working hours, and allowing work from home. But we are failing where it concerns incentivising persons who reach retirement age to continue working, even if not full-time, for a certain number of hours. Female workers need to have more support in coping with long-term care of their dependent relatives.


Then, there is the question of skills. It is estimated that, on average in the EU, up to half of the working-age population is in need of up-skilling within the context of the digital and green transition. Malta lacks competitiveness due to insufficient science and engineering technicians. How on earth we can hope to create an AI niche without many more of these professions is incomprehensible.


There is also no doubt that we need to have better timely and meaningful involvement of the social partners in the design and implementation of employment and social reforms. More ESF+ resourses need to be earmarked for the necessary reforms, while the funds to support employers in upskilling and training programmes should be boosted. In schools, we need to foster the attainment of basic skills during initial education, in combination with reducing early school leaving.


Lastly – though I mention it without any hope that the government will listen – we need to bring migrant men and women into the labour force by a concentrated programme to give them new skills and employability prospects. Many could enter the world of education and work through apprenticeships, on the successful model in Switzerland.
The problem, as I see it, is not simply the number of foreign nationals we are willing to live with. The question whether Maltese society will change irreversibly in a way that we will lose our culture, traditions and mores as we know them, is not the only relevant one to consider. Equally important is what kind of workforce we will have to pay our way in the changed world 20-30 years from now.


Essentially, it is not only an issue of numbers, but crucially whether those numbers will be highly trained, skillful, and flexible workers, or whether they will be stone age men trying to live in a society and economy which have changed beyond recognition.

Photo: Getty

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