Muscat’s living wage under scrutiny
A living wage could work in the interest of companies that depend on domestic demand but the price to the rest of the economy will outweigh the benefits, according to an employers’ organisation.
Dissecting the Labour Party’s living wage proposal, the Malta Employers’ Association said alternative policies that enabled people to move out of poverty or low income situations “would be more effective”.
The association yesterday presented a position paper on the living wage during a business breakfast where the key speakers were MEA director general Joseph Farrugia and Labour leader Joseph Muscat.
The event, which comes in the wake of the idea of a living wage floated by Dr Muscat two months ago, was the first of its kind whereby the MEA took on an issue championed by the PL.
The living wage is different from the minimum wage and is calculated on a basket of necessities for an employee to enjoy a basic standard of living.
Dr Muscat tried to allay fears that a Labour government would impose a living wage, insisting it would be a voluntary yardstick implemented through “social consensus”.
“The living wage is a means to an end and the end is that of raising living standards in the country,” Dr Muscat said, pointing out this was also the aim outlined by the employers’ association.
However, he acknowledged there could be different approaches to achieve this common aim and underlined the importance of a healthy debate on the living wage “or any other alternative”.
He defended the concept on the basis that it helped promote social mobility and increased purchasing power. People would not be simply living at subsistence level, he added.
“I am here with an idea and an open mind, asking you to join forces with me. I am ready to change my position as long as you are also prepared to shift yours. Ultimately, we have a common goal of raising living standards,” Dr Muscat said, adding he needed employers on board to implement the living wage concept.
His rallying call was a reaction to employers’ concerns that a living wage will erode competitiveness.
Earlier, Mr Farrugia outlined a number of issues that had to be taken into consideration when talking about the living wage.
He asked whether it would be calculated on the individual worker’s income or be based on the family income. Mr Farrugia said another parameter that had to be considered was whether a living wage would apply to particular sectors of the economy or across the board.
People on low salaries were of concern to the MEA, he said, but a balance had to be struck between ensuring the basic standard of living and competitiveness. Mr Farrugia said the minimum wage should be sufficient for an adequate standard of living.
“A distinction has to be made between a wage and social benefits. We should not create grey areas between what constituted a salary and what constituted social benefits. Employers do not pay social benefits,” Mr Farrugia said.
During question time, businessman Reginald Fava said he would favour the living wage concept if it were tied with stringent controls on welfare payments and if the political parties stopped promising free public services for everyone.
A similar appeal was made by former MEA president Arthur Muscat, who urged politicians to say how they would finance their promises for more benefits.
Labour MEP Edward Scicluna said that at the current GDP per capita levels the country could ensure a decent standard of living for everyone and it was all a question of priorities when allocating resources.
A study by Caritas earlier this year found that a weekly wage considered sufficient for a basic standard of living for a family of four was €314. The minimum wage now stands at €152.
Nationalist Party general secretary Paul Borg Olivier was among the audience but did not speak.
Later, the PN accused Dr Muscat of dishing out a wish list of policies that do not work.
“Joseph Muscat first proposed a living wage and tried to give the impression he knew what he wanted and how to implement it. He now retreated from it. The living wage is a wish because it will be voluntary and so depends entirely on whether an employer wants to pay his workers the established amount,” the PN said.
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Jonathan Camilleri
Apr 28th 2012, 07:21
"Dissecting the Labour Party’s living wage proposal, the Malta Employers’ Association said alternative policies that enabled people to move out of poverty or low income situations “would be more effective”.
I have an idea, give them double the wage for half the time, so that they can do another part-time job. How about this alternative?
Muscat Pat
Nov 19th 2010, 20:35
The living wage debate is open for discussion. There is no exact blue print to date. However, given that a large number of Maltese are sliding into poverty ,( caritas says 45%) the introduction of a living wage is an essential part of addressing the widening inequality in Malta. This would bring wider benefits, tackles poverty, makes work pay, and improves the quality of lives for families-especially children. But the living wage brings benefits to the employer as well; it reduces staff turnover and absenteeism, whilst productivity and professionalism will also increase. Joesph Muscat has opened the door; he did not close it.
A. Vassallo
Nov 19th 2010, 18:04
Another colossal U-TURN by Joseph Muscat. Now Dr. Muscat is telling us that a Labour Government would not impose this so called living wage. When he first mentioned this idea, he never said and never gave the impression that this may be granted to the employees on a voluntary basis, as he is saying now. Dear Dr. Muscat, can you tell us which employer on earth will, on voluntarily basis, grant this Living Wage, which would obviously be better than the minimum wage, to the employees? At the moment, certain employees are more interested to take away from the employees what they have managed to achieve in recent years, rather than giving them voluntary pay increases.
C.Camilleri
Nov 20th 2010, 07:22
Can you refer to just one occasion when JM stated that the living wage was going to be a Law? He always insisted that discussions on the living wage concept should take place by all stake holders.
If it was for the likes of you and your party today we do not have pensions, children allowance, minimum wage, bonus, leave, sick leave, maternity leave, votes for women, free health, etc etc all introduced by successive labour governments with the PN always voting against them.
I bet though that come next election the PN will adopt a similar concept to make the idea his own. The truth is that the PN never had the lower income worker at heart. Period.
Robert Caruana
Nov 19th 2010, 15:59
how can we explain this:
another U-Turn?
Qassata ohra
Froga ohra
Buzzieqa mifqugha
cretinata
Joseph Cauchi
Nov 19th 2010, 14:36
The Living wage concept as proposed by Joseph Muscat is unworkable.
Joseph Muscat got this also wrong!
JC.
l fenech
Nov 19th 2010, 14:03
Il-living wage idea tajba for si xi darba tasal. Malta tfalli jekk din titla daqs salarju ta' ministru.
Joseph E Briffa
Nov 19th 2010, 13:32
People living on a minimum wage cannot afford to marry still less start a family unless their partner takes a job or keeps his/her existing one. Some people maintain that over Eur300 a week is required by a family of four. Since the mimum wage is Eur150 it follows that the total income needed by such a family is equivalent to twice the minimum wage; ergo there must be two breadwinners. The other option is for the breadwinners to earn more, by improving their qualifications and getting a more lucrative job. It is only then that it makes sense to start a family. People on the minimum wage are in the main either unskilled or have basic education. They must therefore undergo training to become skilled or improve their education level and try to achieve in later life what they could have achieved in their younger days. Education is open to all, it is free for everyone and everybody can have secondary education as well as tertiary education; students have stipends, probably unique in the world. The opportunities are there for the asking. Barring a few exceptions one can only blame oneself for getting a job on a minimum wage.
j gatt
Nov 19th 2010, 17:06
`Education is open to all, it is free for everyone and everybody can have secondary education as well as tertiary education; students have stipends, probably unique in the world.` Very good idea indeed, people with living standards below the poverty line, should then attend a University Course and receive hefty stipends, thus improving their standard of living, much easier than a decent living wage concept Where is the Minister of Education/Finance going to get the money? Simple, just print Euro500 bills, problem solved case closed.
Anthony Castillo
Nov 19th 2010, 13:28
Dr Joseph it looks like that you could'nt get one thing right. Try to make your homework better or ask your adviser Mr Gr!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! to give you better advise because with these advises its going to be a LONG WAY TO HYPERERIE my friend.
Joey Borg
Nov 19th 2010, 13:08
Will the 'living wage' concept be the thing that's going to keep PL in oposition?
Joe Grima
Nov 19th 2010, 12:56
The living wage proposal is perhaps, the most exciting peoposal made by Joseph Muscat
to-date. Of course PN detractors will shoot it down. Of course employers will take a step backwards in unwarranted fear. Our nation has been built on religious, poltiical and social certainties. There will always be those who will resist any form of change, but, at this stage of our nation's development, involved parties should accept that times have changed and that we are living in an an era of economic instability, different from any other we have lived so far. In his time, Mintoff created the social wage and the State bore the full brunt of all social benefits. Not only have we evolved as a nation to be more generous and more understanding when it comes to assisting the less fortunate but the reality is that we are living in an economic hole that will take decades to fill up. It is time to share, to sit together without prejudice with people like this caring Labour leader, and to find ways of moving our nation towards a more equitable society. A life with dignity is no one's monopoly. Dignity belongs to every individual citizen
Karl Abela
Nov 19th 2010, 11:21
Nice one Joseph, yet another nonsense theory from you.
The idea of the living wage would mean 3 things:
1. Companies will not afford it, will not be able to compete, and unemployment will rise sky high. No salary = no money = bad standard of living.
OR
2. If companies want to afford it, they have the option of getting it back from the customer with sky high prices. Then, I would be very eager to see if super one tv will do the mystery shopper excercise similar to what they did when we changed over to the euro to measure the 'l-gholi tal-hajja' they brag about so often.
OR
3. If companies want to afford this, they also have the option of asking their workers to work for 50 to 60 hours a week. Now that you have the money, you dont have time to enjoy it with your family. That's a very bad standard of living.
l fenech
Nov 19th 2010, 14:06
Prosit Karl, bl'istess argument nistghu, inehhu il-pensjoni, is-social benefits u issa il-matenity u parental leave.
Please choose the reason of your report below: