While speaking in parliament, Finance Minister Clyde Caruana said the country needs to take urgent action to address the low birth rate. He estimates that in 50 years’ time, the native Maltese population will drop to 240,000, of whom 40% will be elderly. He claimed the action needed to prevent this situation will be expensive. I agree fully, however, it still needs to be taken. The resources are there, we just need to change priorities.
The statement by Caruana came in the wake of the publishing of a report by professors Anna Borg and Liberato Camilleri on perceptions towards work-life balance, with a focus on family size.
We could debate this issue from a social perspective and from a political perspective. However, the issue is essentially economic and represents the cost to society as a result of how the economy developed in recent years.
It is claimed that we need all third-country nationals working in Malta for economic reasons. On the other hand, the issue of population density has reached crisis point and besides, we are fast approaching the stage where the Maltese will end up being in minority. In both of these instances, there is a great economic cost, in addition to the social and political cost.
One may ask why the low fertility rate is an economic issue. The cause appears to be more economic than social; and the implications and consequences are also economic in nature.
The cause of the low fertility rate is an inability of young persons to cope with the cost of living. It is not the result of a trend. My direct experience and that of employers is that people applying for a job are asking for what may seem to be excessive remuneration because of the cost of property.
The resources are there, we just need to change priorities
Studies have shown that the current average pay levels in Malta are not enough to enable the purchase of a home. I know this sounds extreme, but we have reached this extreme level. It’s gotten to a point where a couple on an average salary would nowadays require social housing if they wish to have children.
If we wish to increase our fertility rate, then we need a direct intervention in the property market to make housing affordable to the average income earners. An increase in cash handouts will not do the trick, as they will simply end up in the pockets of property speculators.
A low fertility rate is an economic issue because for any economy to thrive, it requires an increase in young people. An ageing population will lead to a slow, gradual, painful and steady economic decline.
We speak of the need for our economy to move up the value chain. We can only move up the value chain if we have enough young people to get us there.
Moving up the value chain means we need a change in our economic model, or as someone told me, we need to evolve our economic model. We are delaying decisions at our risk. As the Italians say, “tardare sì, scappare no” (literally translated as ‘delaying yes, escaping no’).
There could be various solutions to the low fertility rate in Malta. Immigration provides a solution, but for Malta, it would only be a solution if we control it.
We require a change in attitude by employers so that mothers do not end up being penalised for the career breaks they take due to maternity.
We require bold initiatives to encourage people to stay in the labour market even after they start earning a pension.
We require appropriate flexible working arrangements when it comes to parenting.
We require policies aimed at providing support to families and to parents.
We require job opportunities that will enable young people to earn more.
Each of these actions will cost us money in the short term and will require time to take root and leave the desired effect. So we really need to ask ourselves the question: ‘Is increasing the fertility rate a priority for our country?’. I believe the answer to this question is an unqualified yes.