Writing in his blog on our online portal, former prime minister and Labour leader Alfred Sant yesterday wrote: “Data recently issued by Eurostat regarding labour costs in the EU show that in Malta, spending on workers and employees (excluding those in agriculture and public administration) is less than half the euro zone average. On the basis of hourly labour costs, the average for 2017 in the euro zone stood at €30.3. In Malta it “only” reached €14.
“The outlay includes those payments made by enteprises that do not go directly to employees: mostly social security and similar contributions. In Malta the share of such contributions in total labour costs is less than anywhere else in Europe: 6.7 percent of total costs. The share is highest in France: 32.8 percent of labour costs are accounted for by social outlays.”
Sant then points to what he called some interesting questions.
“What explanation is there for the fact that though we are experiencing such a strong rate of economic growth, compared to European rates, our labour costs have stayed so low?
“How can local entrepreneurs continue to resist increases in their social contributions when on this account, it appears that compared to their counterparts in the rest of Europe, they carry the least burdens?”
Although low key, this drives a coach and four horses through all the government’s spin this is ‘l-aqwa zmien’. But in fact, no one saw fit to comment by the time we are writing.
We have already reached our conclusion that the 6.6% growth in our GDP was due mainly to the influx of foreign workers. This was admitted by no less than the Governor of the Central Bank, Mario Vella, last week as he addressed a media conference on the Centra Bank’s Annual Report. It was stated clearly that without our foreign guests/workers we would not have reached that rate of growth.
That could have explained matters, but now we see it does not, if not this increase in foreign workers is a ruse to mask something else, something that matters far more to the average Maltese worker. And this is that the average Maltese worker is underpaid, exploited for his or her work, and that for all the much boasted about annual increases given to the Maltese workforce, the Maltese worker’s take home pay has not kept up with the annual GDP growth.
Alfred Sant then addresses the employers’ associations and he asks how can they continue to resist decent increases in wages and salaries when compared to their counterparts in Europe when employers in Malta carry the least burdens.
There are many questions that must be asked at this point. It follows that generally speaking enterprises in Malta are based on an underpaid workforce and if they are making any money at all they are making profits by underpaying their employees.
One would need to study this issue further and to delve into each different sector of employment. But generally speaking we may be speaking of a cemetery of enterprises here, in other words not what we would have liked to hear about.
We want our enterprises to move forward and to grow and make profits but not at the expense of a workforce kept just this side of survival.