The Malta Independent 20 June 2019, Thursday

The working poor – minimum wage earners

Saturday, 23 March 2019, 09:21 Last update: about 4 months ago

Ralph Puli

A lot of us have got used to propaganda that we are living in the best of times. However, official statistics may show otherwise. Recently, a report issued by a European Union agency revealed that this year the minimum wage increase in Malta was the lowest when compared to all other European countries. This lowest increase in the minimum wage comes at a time when a number of families and individuals are experiencing crucial difficulties, significant increases in living costs and exorbitant increases in accommodation costs. Such statistics counter the argument pushed forward by certain sectors that economic growth is trickling down to all levels of society. This report by Eurofound suggests a different reality.

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It is important to note that the current economic growth is fuelled by significant increases in the population which obviously leave a positive impact on overall economic figures. However, what counts is not just the overall economic statistics. It is more important to understand how this economic growth is being reflected in the standard of living of each and every one of us. A question that comes to mind is why is it that, Malta while registering one of the highest economic growths in percentage terms, is registering the lowest rate of increase in the minimum wage rates?

The minimum hourly rate in Malta increased by a mere 7 cents, which represents an increase of 1.9% whereas, for example, in Greece, the minimum hourly rate has gone up by 11%. Official EU data indicates that the average minimum monthly wage across the EU was €924 whereas in Malta it stands at €762. It is important to note that the European average of €924 is impacted because of the very low gross minimum wages paid in Eastern European member states. If we were to compare Malta’s minimum wage with that of, for example, Scandinavian countries, the minimum wage is much lower.

The current economic model being pushed by the local authorities is one of importing thousands of foreign workers which would evidently keep the wages low, which beggars the question if Malta and its citizens are benefiting from such an economic strategy. Promoting economic sectors and projects, which require a high percentage of foreign workers, would result in over-stretching our educational sector, our health sector, our infrastructure, our environmental resources. Just what are we exactly gaining as a population – definitely, the minimum wage earners are not reaping any benefits.

In a recent opinion penned by the ex-Minister of Finance Tonio Fenech asking why we are we over-building our country in the name of economic growth and job creation, he rightly remarked that in order to satisfy the demand and supply rule, Malta is importing cheap labour and as a result the low wage levels paid for such cheap labour risk becoming the benchmark for the rest of the economy. This goes to explain the findings of the Eurofound report.

In the past members of the current administration, when in opposition, used to heavily criticize the Nationalist Government because of the precariousness of wages and working conditions, when the concept of the living wage was mentioned regularly. We are now in the second legislature of this Government and it seems that this concept was discarded.

To make matters worse, Malta now is facing the harsh reality of categories of the population who are facing poverty issues with the numbers on the increase. As prices of accommodation continue to go up, the issue becomes more worrying. The Country Report by the European Commission also goes to show that early school leaving is still very high, amongst the highest in the EU, and the overall skills attainment is low thereby disadvantaging lower socio-economic groups. Participation of the lowskilled in adult learning remains low. Children in single-parent, large, and low to medium-skilled families are at greater risk of poverty. Single parents and large families in particular are still struggling. For large families with two adults and more than two dependent children, the risk of poverty and social exclusion is 7.5% higher than a decade ago. 

Please let’s move from words to fact and make sure that the economic statistics translate in higher decent wages for minimum wage earners and in a better standard of living for all.

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