Employment Minister chalks labour shortage up to Malta’s ageing population

Minister for Finance and Employment Clyde Caruana has pinned the ongoing difficulties by businesses to find workers, particularly locals, on Malta’s ageing population, which is driven by Europe’s lowest fertility rate.

Speaking on the TVM show Xtra, hosted by Saviour Balzan, Minister Caruana said there is only one pillar in the labour sector: skills.

“It’s what we are capable of doing. What we can produce, what we can sell, what we can earn. The country’s economic growth depends on this.”

He said the time for increasing participation in the labour market is largely over, with productivity now the main avenue for progress.

“If one makes €10 for an hour’s work, we need to increase that to €12, to €15.”

Mr Balzan then brought up the labour shortage, noting businesses in all sectors are desperate for workers.

He continued by juxtaposing it with the marked increase in public sector employment, which has been decried by several business associations during the run up to the election.

Minister Caruana replied by pointing out that the difficulty to find workers is testament to the Government’s strong action to protect the economy during the pandemic.

However, during his pre-Budget discussions with the various ministries, he said, he was emphasising the need for Government departments to do more work with fewer people.

He stated that “the job of the public sector isn’t to continue growing its workforce, but to support the private sector generate more wealth.”

“I understand the concerns of business associations when they say they don’t want to compete with Government for workers,” he continued, “and Government in turn shouldn’t compete with the private sector for talent.”

He said he is against wastage of resources, and stated his belief that in many cases the private sector is indeed more efficient.

Mr Balzan pressed the Minister further, pointing to the lack of Maltese workers in several industries.

“If you go to a restaurant and order in Maltese, no one will understand you. If you want to build or do works to your house and speak in Maltese, there’s a good chance the workers won’t understand you,” he said, conveying a comment complaint heard among the public and across social media.

Minister Caruana started by hitting back, saying that in these cases it is often because Maltese workers can get better remunerated work elsewhere.

But he continued by illustrating the key structural problem facing the local labour market.

“It boils down to one number,” he said. “Over these last 10 years, the amount of people between the ages of 20 and 64 decreased by 5,000. It’s because we’re an ageing population, with the lowest rate of fertility in Europe.”

The Minister added that this problem will only become more accentuated over time.

“Putting it simply, in that category [the working age population], there will be fewer Maltese people.”

Mr Balzan then turned to Gozo, where, he claimed, citing employers ranging from the self-employed to factory owners, the problem is even worse.

“Many people say workers are going to work with Government, or with contracting parties working with Government,” he said, in what is ostensibly a reference to the controversial Community Work Scheme.

Minister Caruana didnt mince his words on the matter.

“Of course this is concerning. We are either going to have a politics aimed at supporting the private sector to move forward and progress, or we do nothing because political interests come first.”

“We’re either going to be decisive and let the private sector work, or we choose a different route.”