Social investment - our way forward

Two conflicting announcements have stirred political controversy over the past few days.

The National Statistics Office has published a report saying that 15 per cent of the population in private households are living below the poverty line. A strong correlation has been found between those who fall below the poverty line and young people.

The at-risk-of-poverty rate is highest for those living in the southern harbour district. More than half of single parent households with at least one dependent child are in the at-risk-of-poverty level.

On the other hand, the Federation of Industry has issued a statement lamenting our growing uncompetitiveness. It insists the solution is to be found in lower wage levels. The FOI focuses its criticism on the cost of living adjustment in the wage structure.

In the meantime, the rosy promises and assurances made by the Nationalists before the elections are still ringing in our ears. The Nationalists professed that EU membership will bring about a higher living standard.

It is only logical to expect the Nationalist government to be up in arms against the FOI when it comes out with a statement that clashes in no uncertain manner with what it had maintained throughout all its years of campaigning for EU membership.

In its press release, the FOI compares our wages with those of other applicant members who have lower wages than ours. It fails to mention applicant states, such as Slovenia and Cyprus, where they have a higher minimum wage than ours. Applicant countries that have a lower minimum wage have a lower standard of living than what we have here and their economies are less developed.

It is indeed ironic that the FOI is now comparing Malta to less developed states rather than looking up to those which are more developed.

Is the FOI suggesting we should reverse our development? Once the people have chosen EU membership in the general election, we should seek to emulate countries that have a higher living standard rather than reduce ours as the FOI is suggesting.

Reduced wages can only translate into reduced spending power with the consequent negative multiplier effect on the rest of the economy. Surely this is no kick-start to our stagnant economy.

The answer is to be found more in seeking areas where we have a comparative advantage . We need to find niche export markets which are less price sensitive.

We need to increase our social investment in general and more so in the education of young people. We need to justify our higher wage costs by increasing the level of skills and education at all levels.

It is only by increasing quality and production levels that we can at the same time maintain and increase our standard of living and the level of economic activity.

The Labour Party will never dismantle what it has diligently built 30 years ago. Only a guaranteed minimum wage strucure can protect non-unionised workers in the private sector, which, incidentally, constitute the majorijy for their class.

The Labour Party believes that protecting workers' rights and ensuring social justice is the cornerstone of our future development. One cannot take place without the other.

Karl Chirchop is a Labour MP