The question has arisen again, this time maybe even more forcefully. Caritas has called for an increase in the minimum wage, over and above cost of living increases.
The call follows an intensive study carried out by the Church NGO, which found that families with dependent children living on one minimum wage or those on unemployment benefits cannot afford to buy the most basic items to live a decent life. This is not about rising or falling poverty numbers but about real people living in poverty.
It is a call for action.
The Caritas study, ‘A minimum essential budget for a decent living’, is based on a basket of goods and services a family cannot do without. It is actually a conservative one as it makes a number of assumptions, like that families in social housing are all in good health, free from disabilities and at least one individual in the household is eligible for free medicine. Naturally, reality can be much different and much harsher and Caritas has urged the government to gradually raise the minimum wage over a three-year period.
No one has contested the findings. The Nationalist Party said it was open to discussing raising the minimum wage in an effort to alleviate poverty. Social Solidarity Minister Michael Farrugia has invited Caritas to make a presentation on its findings to Cabinet and Prime Minister Joseph Muscat said it was time for Malta to have a serious debate about its minimum wage. With the economy growing and unemployment down to a 36-year low, there was no better time to look into the issue, he said.
Incredibly, the minimum wage has not been revised since 1971, when the social concept of a decent living was far different from what it stands for today, nearly half a century later. Yet, successive governments, employers and trade unions have avoided tackling the matter directly for fear of economic repercussions.
Employers have argued that a minimum wage increase would raise the overall level of wages and warn of a domino effect that could cost the country its competitiveness.
On the other side of the coin, there are those who argue that an increase in the minimum wage would result in a higher income that would enhance spending power in the economy. The General Workers’ Union believes that the minimum wage should be raised through a one-time intervention following a scientific study on mitigating any impact on the country’s competitiveness.
The Prime Minister had made an electoral pledge to eradicate poverty. He has done nothing of the sort, of course, and despite government efforts to alleviate the problem, successive surveys still show a high percentage of people living on the poverty line – nearly 10 per cent of the population was severely materially deprived in 2014.
Some localities are more affected than others. Cospicua, Floriana, Valletta and St Paul’s Bay were among the main beneficiaries of food packages under the EU food aid scheme. But that is really a detail because in a country the size of Malta, the poor are truly “among us”.
In times of economic boom, as is now, it needs to be assured that the benefits of high economic growth do trickle down to those most in need. This is a basic principle of solidarity and social justice. It goes beyond mere economic policy and, yes, there may be an economic cost to raising the minimum wage. But it remains a moral issue that needs to be addressed.