Today, Tuesday 7 June, Malta commemorates one of the five national public holidays. Being a public holiday many make for the beach, others to the countryside. The more laid back ones go for a nice lunch. Some stay at home do some reading, tune-in to their favourite music radio station or do some gardening.
Of course, there are other options how to enjoy a day of rest during the week. It all boils down to preferences and commitments. However, whatever these may be, it is appropriate to reflect on the importance of this national day and pay our respects to those who lost their lives during the Sette Giugno riots of 1919. Four people died, while many others were injured, leading to the death of two others some time later. The 1919 riots stemmed from the unsatisfactory economic and political life of almost a century ago.
In the aftermath of World War I, the cost of living increased substantially. Workers found that wages were not keeping up with the increase in the cost of food. Political developments were also a fundamental cause of the uprising. In February 1919, a newly constituted National Assembly unanimously resolved to request the British government to grant a new constitution with full political and administrative autonomy.
What we enjoy today is what our forefathers strived for so hard in the past. In the light of the foregoing, it falls on us to secure a better future for the coming generations. We have many challenges ahead. The growing number of persons falling into the poverty trap is one. Only a selected few have access to the gravy train. This is socially unjust.
Lately, Prime Minister Dr Joseph Muscat invited the social partners and other interested parties to give their feedback on the recently published report “A Minimum Essential Budget for a Decent Living” by Caritas Malta. The report makes interesting reading and highlights some fundamental issues which, over a span of time, have silently crept and eroded the well-being of our society. It looks as though we are edging towards a two-tier society. There are workers empowered with skills and professions suited for the current labour market. And then there are those who, for a wide range of reasons, cannot make ends meet at the end of the month. In well-to-do circles and some political opportunistic fat cats, more often than not, those who cannot make ends meet are labelled sangisugi, called lazy bummers and crooks.
I am looking at the proposal to increase the minimum wage over a span of time to address poverty with ambivalent feelings. The proposal to increase the national minimum wage is a populist idea. On one hand, this may be perceived as a socially just and fair measure; on the other hand, an increase in the minimum wage will inevitably push prices higher.
The current minimum wage rate for whole-time workers over 18 years is €168.01 weekly. Wages and salaries are augmented with the Cost of Living Adjustment (COLA) to make good for the erosion in the standard of living, and thus in the quality of life, because of inflation in the previous twelve months.
The working methodology of the COLA has been the subject of lengthy discussions in various fora, not least the MCESD. Perhaps the formula needs to be revisited and tweaked. Most economists would argue that, to protect Malta’s competitiveness, wages should be augmented against increased productivity. This is echoed by employers and the business community. This stand should not be taken lightly.
An augmented minimum wage will certainly create an improved feel-good factor, but this will be eroded within months as prices tend to increase and become higher for services rendered and for goods purchased, wiping away the feel-good factor generated. It is a vicious circle. While it is imperative that all measures are put into place to protect people from falling into poverty, increasing the minimum wage has to be addressed with great caution.
Another issue which has to be borne in mind is that salaries and wages are pegged and form part of a national wage structure. If the national minimum wage is improved, then it would stand to reason that all salaries are increased with the same amount to ensure that wage relativity is maintained between grades at the place of work. An upward push from the bottom to the salary structure would also result in an across the board improved national salary structure.
Recently published labour market figures show that, currently, there are less than 4,000 persons on the unemployed register in an economy which is doing quite well. However, notwithstanding a booming economy and shortage of supply in the labour market, wages have not gone up. This may be an indication that the new employment opportunities which are being created are attracting low skilled workers, while new employment opportunities with more value-added are becoming scarcer. Alternatively, the current buoyant economic growth is the result of poor wages and salaries. Perhaps time has come to look at the quality of the new employment opportunities which are coming on stream.
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