Poverty is indeed a big challenge to combat. It does not relate to money income alone, but the lack of enough money is a crucial precondition. Money is the primary measure and means of gaining almost all other resources needed for socially inclusive living.
Productive work is the most significant measure to pull people out of poverty. Everybody supports the achievement of full employment, which means keeping as many people as possible in work. From a trade union point of view we support the notion and we believe that it is only logical that work should have a decent financial reward.
The minimum wage is aimed especially at the more vulnerable groups in the labour market: young people, the unskilled and since recently migrant workers, amongst other categories of workers. Unfortunately, much as we at the UHM believe that these people need trade union protection, so far we have not managed to garner their commitment and support.
The debate about the necessity to increase the national minimum wage has been simmering on the back burner for a while. The minimum wage acts as a barrier against the ‘race to the bottom’ – where unfortunately some employers force their workers to take increasingly lower wages, because there is no legal limit on how low they can go. This is to ensure that where employers price a service or submit a tender for a contract they compete on the basis of at least the lowest wages.
Minimum wage rates also protect good employers who want to pay proper rates but who might be undercut on wages by some unscrupulous bosses.
When a century ago the outstanding Winston Churchill introduced the partial minimum wage in England, he described the purpose as “To protect good employers from bad, and the bad employers from the worst.”
Locally the national minimum wage presently stands at €7,919.08 a year or €152.29 weekly. The minimum wage is increased every year with the cost of living adjustment to make good for the erosion in the purchasing power. The minimum wage is set and worth only what goods it will purchase in our economy.
The minimum wage rate is set by regulation in 20 out of the 27 EU member states. Like in Malta some countries have it set by law, in others by agreement between unions and employers. The Nordic countries – Denmark, Sweden and Norway – do not have a minimum wage set by law. Instead, they have a longstanding tradition of meaningful social dialogue whereby employers and unions agree on a rate in each sector like construction, tourism and other sectors of the economy. Once agreed upon, these are adhered to by all employers. The minimum wage rates in most European Union countries are far higher than in Malta.
I trust that most employers and government do not believe that it is the set minimum wage that is the cause of our economic problems.
Can Malta lose the competitive edge with a higher national minimum wage? A higher national minimum wage will not make Malta less competitive in international markets since Malta is attracting foreign direct investment in the higher end of the market where wages are by far higher.
With an able and skilled labour workforce Malta has been attracting local and foreign direct investments with higher economic added value paying their workers far more than the set minimum wage.
Issues that have damaged the national competitiveness have long been identified and under the magnifying glass, the national minimum wage was never under investigation.
A future knowledge-based society will be able to further reduce the present number of workers who earn the set national minimum wage but to arrive at that point a concerted effort is required by all stake holders.
Notwithstanding the great achievements of this small nation in these difficult times from where I am standing today it seems that the need to change, adapt and address the needs of the less privileged people in our society is becoming more conspicuous. The UHM is more interested in the improvement of the quality of lives of people… be it sweet talk, bullying or anything else.
Gejtu Vella is secretary general UHM