I remain dismayed and sad that Labour leader Joseph Muscat has adamantly declared that a new Labour government will not raise the minimum wage and implying that he sees those in favour of raising it as irresponsible. As fellow economist Karm Farrugia has pointed out (The Times, September 26), couldn’t he have said it was “inopportune” to raise theminimum wage?

Gonzi and his PN are attacking Joseph Muscat for saying he would do exactly as they have done for 23 years- Lino Spiteri

And, are Karm and I, plus Caritas with all its social weight, irresponsible creatures? Caritas, in an exercise in which Farrugia and other volunteers participated, came up with a gem of a study which made the case for “a minimum wage for a decent living”. The study recommended a modest increase – some €20 – in the wage, structured such that it did not influence other costs.

The political parties hummed and hawed and congratulated Caritas – but did not commit to accept its recommendation. Muscat has now committed, without giving a timeframe but motivating his decision along the lines adopted by the Malta Employers’ Association. He says that raising the minimum wage would raiseproduction costs. He prefers to reduce the cost of living, leaving more money in people’s pockets without affecting costs.

One understands the reasoning, except that, when put in context, it falls flat, hence my dismay and sadness. But then, along came politicking, with the Nationalist leader and Prime Minister shouting out in Gozo and now on billboards that Muscat wanted to “freeze” the minimum wage.

That is disgustingly shameful and dishonest, a barefaced untruth. According to Joseph Muscat’s proposal the minimum wage would rise by the cost of living statutory increase. It would pause there, as it has done since its inception.

Let the facts speak forthemselves.

The minimum wage was introduced by a Labour Government in 1974. It was not increased, other than by adding to it the cost of living rise applicable to all employees, up to the time Labour was turned out of office in 1987. That was a pause of 13 years. The Nationalists then administered up to 1996, nine years during which they too left the minimum wage unchanged, other that for cost of living increases.

That was followed by 22 months of another Labour government, again no change (a shortcoming for which I bear blame as Finance Minister for a while). The Nationalists won office again in 1998 and have held it for 14 years. They have therefore governed for 23 years against Labour’s 15 years, eight of which under Lawrence Gonzi who was so hugely scandalised in Gozo and since.

That is not simply hypocritical. It is grossly vile. It pushes politics to new abysmal low, suggesting that the Nationalists are not only scraping the bottom of the barrel – they are chopping the barrel up for desperate firewood.

Gonzi and his PN are attacking Muscat for saying he would do exactly as they have done for 23 years. The Prime Minister, in fact, also blared financial nonsense in Gozo. He posited his attack on Muscat by saying that the mystery of how the Labour leader would fill the hole he might create by reducing water and electricity was solved. He would do it by “freezing” the minimum wage.

That was banal. By leaving the minimum wage as he found it Muscat would not increase government revenue by a cent. Gonzi knows that well enough. He is no fool. But he was fibbing, trying to scare people with false conclusions.

The pity of the wicked spin is that it distorts the debate about whether the minimum wage should be reviewed or not. I continue to believe it should, without delay, for very simple reasons. Those who are only paid the minimum wage are not unionised. If they were, their union would make sure they are paid more decently.

Neither are they employees of the bulk of the members, if of any of them, of the Malta Employers Association. They are a voiceless disparate group working forsmall employers. These employers compete with each other and would not suffer a competitive disadvantage from an increase, since they would all have to shoulder theincrease.

The minimum wage earners have no one to speak for them besides a few unions who do not represent them. Now not even the Labour Party wants to act definitely for them. If the cost of living does come down, it would be to the benefit of everybody, not just the minimum wage earners. That would leave such earners still relatively much worse off than they were when they were introduced. Let me give a simple example.

Let us say that when the minimum wage was introduced, the average income was twice as high. The ratio of the minimum wage to average income was one to two. Let us assume that, with cost of living increases, the minimum wage has doubled, but average income has tripled, through the statutory increases, collective bargaining and market forces. The ratio moves to two is to six. No self-respecting union would accept that.

Mine are only assumed figures. But I doubt that they are far off the mark. Meaning that not only is the minimum wage low – its earners have fallen farther behind over the years. By the way we are talking about a wage which now stands at €158.13 per week or a rounded €143 after deducting the social security contribution.

Still, nobody has a heart for these pitiful wage earners. The Government, for instance has not said they would revise the minimum wage in the coming Budget, or if re-elected. The wages of dishonest spin, unlike the minimum wage, have no limit.

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