Malta needs a change in mentality when it comes to education rather than just contenting itself with building new schools or giving out iPads to students, Finance Minister Clyde Caruana said on Tuesday.
Caruana was speaking during the launch of Malta’s National Employment Policy 2021-2030, where he placed special emphasis on the need for an improvement in the skills of the Maltese workforce.
“Politicians like to try to impress people by speaking about things like Industry 4.0, Artificial Intelligence, the green economy, the blue economy and a thousand other things. But what is the reality? 20 years ago when I was 16, we had dial-up internet which I could only use after 6pm. Today we’ve got internet and technology everywhere we go. Back then, when I sat for my O-levels, 38% of us got the six O-levels we needed to continue moving forward. 20 years late, that number has – despite having internet everywhere and despite the advances of technology – increased to just 47%. The improvement has been marginal,” he said.
“We can’t stay contenting ourselves because school leaving rates are down. The lowest denominator is not how many people don’t pass, its how many people do pass and how skilled we are. This is the elephant in the room which we need to speak about,” he said.
The average number of years which a student spends in school meanwhile stands at 16 years for Malta, tied with Bulgaria as the second lowest in Europe and significantly less than northern countries such as Ireland (20 years) and Scandinavian countries (21 years), the study found.
“Youths cannot only spend just 16 years in school… how can we ever compete when Nordics spend 21 years? That is today’s world, and that will be tomorrow’s world,” he added.
The document in fact shows clearly that those with a higher level of education have seen their average equivalised net income increase by a higher percentage than those with a low level. In 2014, those with an ISCED qualification of 0-2 saw their average equivalised net income in 2010 stand at €10,948, rising to €14,817 in 2019. Those with an ISCED qualification level of 5-8 saw this rise from €18,541 in 2014, to €25,631 in 2019. This means that those in the higher education bracket saw their income rise by €3,200 more in the same period than those with a low ISCED qualification level.
The policy document reads that the number of individuals with a qualification of less than ISCED level 2 remained stable since 2010, amounting to 86,000 people. Those with ISCED levels 3-4 increased by more than 36,000 when compared to 2010 to reach 82,600 by 2020, and those with a tertiary level of education more than doubled from 33,500 in 2010 to 87,000 in 2020. The policy highlights, however, that Malta’s educational successes continue to be plagued by a high degree of early school leavers.
“One result of a strong and competitive economy is that people with higher levels of educational attainment earn more.”
Yet Caruana was critical of the current political view to education.
“This isn’t a matter of spending more money or building more schools. That’s not what will improve students. What needs to change is the mentality,” he said when answering questions from attendees.
“My mother used to tell me to study because for every bone, there are a hundred dogs. Today there are a million dogs fighting for that same bone. We are competing with everyone,” he added.
The Finance Minister was, however, not convinced with a Chamber of Commerce proposal for mandatory education to be increased by two years to include sixth form.
“If someone hasn’t learnt in 13 years, it’s useless leaving them there for another 15 years. What didn’t come in 13 years isn’t going to come in another two,” he said.
“We need a mentality that’s not just focusing on building new schools and giving out iPads – that’s all good, but did the skills level increase? That’s the bottom line. We need to focus on substance not visual,” he said.
Population: Malta will continue to need foreign workers
The document provides an overview of the sectoral shares of the Gross value added (GVA) to the economy. In 2010, Manufacturing had a 12.8% share of the GVA, dropping to 8.6% in 2020. The professional, science and technical sector had a 5.4% share in 2010, and rose to 10.1% in 2020, for example.
The document also provides a snapshot of the total number of people employed in a particular sector year-on-year, divided up into Maltese, non-Maltese, part-time and full-time, as well as providing information as to the challenges the sector faces, what opportunities exist and future trends. As an example, looking at manufacturing, 23,941 people worked in this sector in 2020, 5,289 of whom were non-Maltese workers.
Among the challenges listed are the skill-gap as the sector becomes more technologically advanced, the growing need for foreign workers, low R&D expenditure etc.
Included in the list of opportunities are new export markets, 3d printing and new technologies, that new sectors require new skillsets etc. In terms of future trends, the document lists industry 4.0 increasing automation, supply chain disruption, among other.
One particular issue one can notice from the document deals with the population. A particular table shows the absolute change in Malta’s population by age between 2000 and 2020. In the 0-4 age group, the number stands at 651. In the 5-9 age group, it stands at -3,166. In the 10-14 age group, it stands at -5,814. In the 15-19 age group, it stands at -6,656. This indicates that the labour force over the coming years will likely shrink.
As a result, both Economist Stephanie Fabri and Caruana said, the emphasis on foreign workers will have to remain as will ways of encouraging people to work beyond the retirement age.
Fabri explained that the country cannot afford to lose the human resources of people who reach pensionable age, saying that the number of workers of a younger age is only increasing because foreign workers are coming to the country.
Malta has the second highest rate of foreign workers after Luxembourg, a reality that has to remain if the country is to keep advancing, she said.
Caruana meanwhile said that the country has “no choice” other than to resort to foreign workers, because birth rates in the country have decreased.
He was asked during a press briefing the day before the launch about undocumented workers, and he said that most left the country due to Covid-19. He said that the wage supplement was only given out for registered workers, so when employers stopped paying such workers they left. He said they would not come back got now due to restrictions, but indicated that this could change once things return to normal. He said that enforcement to tackle the issue has always been taking place.
Survey
5,381 people were contacted for an NSO survey.
Over 200 businesses leaders were consulted over the policy, in addition to the MCESD. Focus groups with foreign workers were also carried out, discussions with NGOs were held and a survey of over 5,000 people was also conducted.
One subject which they were asked about was their income. “54.8% consider their income to be reasonable, in relation to the tasks they perform and their skills. Furthermore, 74.8% of all respondent consider their income to be enough to sustain a comfortable lifestyle.”
The survey found that the vast majority of those with a low level of educational attainment have very-low income aspirations expectations. 92% of those with a primary level of education and 78% of those with a secondary level of education do not aspire to earn more than €25,000. It highlights that education remains critical in attaining better quality and higher-paying jobs.
58.3% of survey respondents indicated that having a gross income between €19,501 and €35,000 would allow them to sustain a comfortable lifestyle. “These respondents mention several considerations for not getting the expected income, with the top three reasons being collective agreements, which are perceived by 17.9% as reducing opportunity to increase income, another 17.9% blaming in on the fact that their sector of employment is suffering and 16.2% linking slow income growth to the number of foreigners working in Malta. A fourth reason which scored quite high, at 15.3%, relates to the lack of opportunities in the labour market. However, only 10.8% link it to lack of education, further confirming a structural weakness in the labour market and broader population.”
Elsewhere in the document, it reads that the link between high wages and faster wage growth is positively correlated to educational attainment, “further confirming the importance of focusing on education and life-long learning to improve salary outcomes and household income.”
Recommendations
The document makes a total of 40 recommendations, with Fabri briefly explaining eight of those during the business breakfast.
The holding of a national skills census, coming up with an industry skills framework for all economic sectors in order to identify the needs of the industry and the skills needed for the future of the sectors, and to encourage lifelong learning and upskilling are the first three.
Increasing participation in apprenticeship and traineeship programmes in order to attract students and youths to certain industries was another measure, with an online system where companies can advertise that they are looking for apprentices proposed.
Tax incentives which keep pension income and work income taxed separately are another recommendation, while the overtime tax is proposed to be reduced to 15% on overtime up to €10,000 so to move people away from opting for a part-time job instead of working overtime.
Tax incentives for workers contributing to research and development within a company and the reduction of season employment in Gozo through the full credit of national insurance contributions were the other two recommendations explained by Fabri.