The request made by Caritas for a rise in the minimum wage should be discussed in earnest between the government and the social partners. Despite Malta enjoying a booming economy, it is more than evident that a section of the population – and this includes minimum wage earners – is not benefitting at all from the country’s economic growth.
A research study by the Church NGO entitled ‘A Minimum Essential Budget for a Decent Living’ calculated that the yearly budget necessary for a family of two parents and two children to live decently amounted to €11,446. However, such families on one minimum wage who also receive in-work benefits and other allowances earn only €9,353 a year.
Meanwhile, it was estimated that a single parent and two children need €9,197 to live a decent life. Yet such families who are unable to work and are on unemployment benefit earn a paltry €6,965 a year.
Caritas is calling for the statutory minimum wage to be raised slightly every year over a period of three years (in addition to the Cost of Living Adjustment). It is pertinent to point out that the minimum wage, which stands at €168 per week, has not been increased since 1971.
In reaction to the Caritas request, Prime Minister Joseph Muscat said he would welcome a debate on a gradual increase in the minimum wage, the Nationalist Party said it was open to discussing the issue while Alternattiva Demokratika fully supports Caritas’ proposal. The Malta Employers’ Association and the Chamber of Commerce oppose such an increase, saying that the measure would make Malta less competitive.
The General Workers’ Union, on the other hand, is in favour, while the Union Ħaddiema Magħqudin is lukewarm, saying the minimum wage should be the first step for a particular category of workers and the long-term solution is the continuous training of workers. The Malta Council for Economic and Social Development has stated that an increase in the minimum wage could help reduce poverty but at the same time could cause unemployment as companies would lower their demand for labour.
Amid these divergent views among employers and trade unions, few would disagree that more help is needed for those at the bottom of the income ladder. The government should therefore appoint a group of economic experts to recommend to the MCSED, within a short period – say, one or two months – how poverty could best be tackled and assistance given to those who cannot make ends meet. The MCSED would then be asked by the government to make its own recommendations, after having received the suggestions of the experts.
A country cannot simply measure its social and economic progress by highlighting positve statistics. Economic growth, low unemployment and a reduction in the deficit are, of course, excellent news for the country as a whole, but economic indicators do not comfort those most in need. As the Alliance Against Poverty remarked: “It is not just to have a booming economy while thousands lag behind without enjoying any of the wealth created.”
Raising the minimum wage is one option. But it is by no means the only one. It has been suggested, for example, that assistance could take the form of a monthly bonus shared equally between employers and the government. Such a formula would eliminate the need for increased national insurance contributions, thus excluding an additional financial burden on the private sector.
Social justice must be considered on on par with the country’s competitiveness when a decision is finally taken by the government on how best to tackle the economic marginalisation of a section of Maltese society. Boasting of a well-performing economy sounds hollow to those citizens who don’t benefit from it.