The PN strategists seem to have decided to base their electoral campaigns on outright lies. Misinterpreting beyond any reasonable level of acceptance the words of the leader of the Opposition, GonziPN came out with the fabricated lie that Joseph Muscat is proposing to freeze the minimum wage.
The first reaction of many people was outright astonishment. Many are finding it extremely difficult to believe how a yet unofficial electoral campaign can be based on such untruths. More worrying is that this is the second distortion of reality that GonziPN is perpetuating in just a few weeks. The first untruth was the claim that 20,000 jobs were created during the last four years.
A historical look at the development of the minimum wage shows that this concept was introduced in Malta in 1974 by the then Labour government. The legislation supporting the minimum wage had mainly two aims. The first aim was, and still is, to ensure a minimum level of compensation for work effort. The second aim consists of the distribution of income and thus indirectly contributing to poverty reduction.
This Act which stipulates the national minimum wages of both full-time employees and of part-time employee states that ‘the wages payable to such employee shall not be less than those laid down by such Wages Council Wage Regulation Order, adjusted for cost of living by successive increases of wages declared to be generally applicable to all whole-time employees … or by any successive wage increases for cost of living laid down by any national standard order’. The only differentiating factor relates to those under the age of 18 years, in which case a reduced rate of 95% of the minimum wage is applied.
The existence of a minimum wage means that although wages are either regulated by collective agreements between firms and unions or else set on an individual basis between the employee and the employer, they still cannot go down below a certain level. At its very inception, the national minimum wage stood at Lm10 per week, which is more or less equivalent to around €140 in today’s’ prices. As from 1991, all wages including the minimum wage were increased by the Cost-of-living increases (COLA) which is calculated according to the Retail Price Index (RPI). The last time the minimum wage was increased, apart from the COLA, was nearly 25 years ago.
Studies, both local and international, consistently show the amount of employees that earn the minimum wage in Malta amount to less than one worker out of 20 while the ratio declined by definition when compared to the total working population. The studies also confirm that around one-fourth of the persons on minimum wage are employed in the wholesale and retail sector. The sector with the second largest number of people on minimum wage is the manufacturing sector.
Other sectors employing a significant number of persons on minimum wage are the construction sector and the hotel and restaurant sector. This, however, does not mean that many thousands of people do not have to survive with wages just above the threshold. In fact, there are thousands of workers whose income is close enough to the minimum wage that they fall in the bracket of people classified as being in risk of poverty.
One of the many problems affecting people at risk of poverty is the fact that the financial reward from their employment is not enough, given the expenses they face. Many families are faced with expenses which are very often disjointed from whimsical consumption behaviour but are instead linked directly to basic needs such as health care, education or due to the burden imposed by the high utility bills.
This leads directly to the issue of the quality of employment many are facing. The number of jobs created can mask the reality which many job seekers are facing. Many are constrained to accept part-time jobs when they would prefer full-time. Many are offered jobs much lower than their qualifications and than what their education entails them to aspire to. This is even more so for those seeking employment in Gozo.
Instead of spinning stories and perpetuating lies, GonziPN should focus on creating real jobs. The minimum wage is an issue only when those seeking employment are at the mercy of events. If employers are confident that there is enough demand for their products or services in the market then they will pay good money to find and retain employees. It is only when jobs seekers constantly exceed jobs opportunities that the wages begin to lower and the threshold is needed. However, the only issue that GonziPN seems interested in is that of trying to score a few political points through fear and misinterpretation of facts.
Dr Anton Refalo is Labour Party spokesman for Gozo