The Malta Independent 4 June 2020, Thursday

TMID Editorial: Economy - Numbers vs reality

Thursday, 8 August 2019, 11:22 Last update: about 11 months ago

An NSO report published on Wednesday shows that the number of people living below the at-risk-of-poverty line has increased slightly – by 0.1 percentage points - over the previous year. There were 78,685 such persons in 2018.

On the other hand, the severe material deprivation rate among persons living in households was 3% - a decrease of 0.3 percentage points over 2017.


The two most influential variables contributing to this decrease were: the ability of households to spend one week’s annual holiday away from home, and the ability of households to face unexpected financial expenses.

The fine print shows that 30% of the population (which translates into 142,871 persons) cannot afford to go abroad for one week.

Now to be fair, the number was higher the previous year – in 2017 33.9% could not afford a holiday – which means that there has been some improvement.

But despite the decrease, the numbers are still worrying. Worse still, they do not reflect the sentiment conveyed by politicians.

We are used to hearing, on an almost daily basis, sweeping statements to the effect that most Maltese families are now well off, that we are the best in Europe, that the country with the lowest unemployment, that we are registering an economic growth of 6% and, perhaps the biggest generalization of them all, that everyone in this country is benefitting from the growing economy and all families have more money in their pockets.

Yet, despite these claims, many working class families are still struggling to make ends meet. Despite all this talk about how everyone is doing better, almost one in three Maltese people cannot take a single one-week vacation. And more than one in ten people would not be able to deal with an unexpected financial expense.

There is a big difference between numbers and reality. And politicians always rely on the numbers. How often do we see politicians visit struggling families in their homes? How often have we seen a minister visit a soup kitchen or a shelter for the homeless?

We are not saying that the country has not moved forward. It is a fact that many businesses are doing better than before and a sizeable chunk of the population now finds itself in a better financial position.

But it is also a fact that economic growth leaves many people behind – usually people who are at the lower end if the income spectrum. The more the economy grows, the more prices for everyday goods increase. The recent increases in the prices of fuel and milk, among other things, create more pressure on struggling households.  This warning was also sounded by Andre Bonello, Head of Community Outreach within Caritas Malta and Secretary of the Anti-Poverty Forum, in a recent interview with this newsroom.

Salaries are also an issue. While the average household, according to the SILC report, stands around €33,000, this does not mean that every households earns that much. We know that the average salary is inflated by the high salaries earned by people in the gaming and financial services sector, among others. But many families earn much less than that.

The problem is not economic growth. The problem is the constant sweeping statements by politicians that only take into account the average totals of economic indicators but ignore the reality of tens of thousands of households.


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