Fixing income inequality by meddling with the labour market or intervening with the wage determination mechanism would be a "knee-jerk reaction" and a mistake, employers have said. 

"Some countries in the EU have higher wages than Malta, but they also have higher unemployment," the Malta Employers' Association has argued in its pre-2017 budget proposals, saying that Malta had managed to weather the global financial crisis thanks to a strategy of "wage moderation and responsible employment practices and job creation by the private sector." 

The MEA wants the government to encourage policies that minimise the number of persons on low wages, "rather than raising wages artificially." Its proposals call for vulnerable groups such as pensioners and single-parent families to be helped through focused social interventions.

In its proposals, the MEA noted that the local economy was doing well, with GDP up, employment down and the labour activity rate increasing. 

But it warned that while things were going well, there were several factors which suggested things might not remain so cushy in the future. 

Among those, the MEA said, was the likelihood of Malta no longer receiving EU structural funds from 2020 onwards, and that of tax incentives for the gaming and financial services sectors being toned down or removed. The "gold rush" caused by the sale of Maltese passports would also eventually dry up, and environmental concerns might also challenge economic growth. 

The MEA also noted that: 

• Growing the public sector had come to the detriment of the private sector in some cases, such as manufacturing and tourism in Gozo 
  
  
• Malta's rising population was placing strains on traffic flows, rental markets and education and health infrastructure
  
  
• Society could soon face some tough choices, and economic activities which yield a low return or harm quality of life could eventually be phased out