The government, opposition and social partners this afternoon signed an agreement to increase the minimum wage by €8 a week by 2019, over and above the increase given for inflation.
The agreement was signed by Prime Minister Joseph Muscat, Opposition Leader Simon Busuttil and the social partners at the Palace in Valletta. The increase is the first to be reached since 1989, and was agreed to at the Malta Council for Economic and Social Development.
At the end of the ceremony, Muscat and Busuttil shook hands awkwardly. For the past days Busuttil has called for Muscat's resignation after revelations he made on the OPM's chief of staff Keith Schembri.
Earlier, Muscat stated that "common sense prevailed," and expressed that he is "proud our country arrived at this".
He said that the issue was always seen as an "out-of-bounds topic", "one that we have arrived to during this legislature with serenity," he added.
Muscat said that in order for a step like this to have happened, you first need to achieve a strong economy, stating that aims for the economy for 2020 were achieved four years earlier.
Busuttil said he respects this decision reached and will implement it and follow through if the Nationalist Party is to be elected in the coming general electioms. He referenced to an economic study which showed that with the rise in cost of living nowadays it is difficult to survive with a normal wage "let alone a minimum wage," he said. He commented on increases by the Government in the past, by 50c and €1.75 per hour, saying it was "not enough" and is glad that today "something is happening." "The question is has it increased enough?" he asked, stating that he doesnt believe so. He called the agreement, however, "a good step in the right direction..a step to keep building on."
The minimum wage will rise by €8 per week by 2019. The increase, over and above the cost of living adjustment, will be of more than €400 per year in two years’ time.
Chairman of MCESD John Bencini said that the "historical" agreement was an "unanimous decision", made to find a way of increasing the minimum wage "without harming employment or competitiveness." The agreement states that employees who are on minimum wage will, upon completion of the first year of employment with same employer, be entitled to an increase of €3 euros per week in their second year of employment. An additional €3 will be added upon completion of the second year. "After being on minimum wage for one year, you can no longer be in minimum wage," said Dr Muscat during his speech, calling the increase a "sign in prosperity for social progress." He also added that tax bands would be adjusted in order to ensure the increase is stable.
By 2019, the minimum wage would have increased by €6 per week. With this, employees in minimum wage employment will also be given a supplement of €1 each year on the Cola thus reaching a total increase of €8 per week by 2019.
The increase was criticised both by Democratic Party Leader Marlene Farrugia and activists.
Dr Farrugia said that spending power of minimum wage earners has to be improved further, whilst activist and leader of Moviment Graffiti Andre Callus described the €8 weekly increase in the minimum wage as cosmetic. Speaking to The Malta Independent, Mr Callus said that the increase is not even half of what they campaigned for.
Addressing the criticism, specifically made by the Campaign for a Decent Minimum Wage, Muscat said that it "cannot be ignored". "That is why it does not stop here but will be built upon," Muscat said, adding that there will also be a 'mechanism' in place which will advise the Government about minimum wage increases every four years, which will stop the wage from freezing. Therefore there will be "no need for campaigns," according to the Prime Minister.
Minimum Wage Agreement 28AP2017 from The Malta Independent on Vimeo.
Photos Baskal Mallia