What follows is not about what Joseph Muscat said about the minimum wage. Nor is it about the Nationalist Party’s predictable retort, or the sparring that followed.
The whole point of making money is precisely to prevent it trickling down into other people’s pockets- Mark Anthony Falzon
The reason it’s not about that has nothing to do with a penchant for fence-sitting. It’s just that I’m unwilling to contribute to an impasse which is beginning to resemble that of stipends. Let’s call it ‘mention and be damned’. I don’t find it disgraceful that politicians should talk about, question even, the cost of labour. On the contrary I think we should expect them to do so.
Qualifier in place, there are two ways in which much of what is being said is fairly pig-headed. The first has to do with competitiveness. There seems to be a notion at large that higher salaries, and especially a higher minimum wage (because that’s around where most frontline manufacturing hovers), make workers, and therefore the economy, less competitive. This is true only up to a point.
Certainly there is such a thing as a reasonable cost of production which is linked to competitiveness. If I made hats and valued my work at €50 per hat, and if my competitor from across the street thought higher of himself and valued his (similar) hats at €100 I would likely profit. So far so primary-school economics.
The truer story is that labour is neither empty nor homogenous. What I mean is that work, and its value, rarely if ever follows the shallow parable of the two hat-makers. That’s because there can never be two exactly similar milliners, no matter how closely their products match. Rather, customers will have ideas about what sort of person each of the two is, about the type of attitude that goes into their work, and therefore about the value of that work.
The point is that labour is always embedded in cultural notions about the relative value of workers. On the one hand that’s bad news, especially for types (often but not necessarily women, the very young and very old, ethnic minorities, and such) whose work is devalued no matter how excellent its quality.
When I lived in India my breakfast would be delivered to my room by a ‘tea-boy’. He charged next to nothing for his efforts and I got funny looks from people every time I tipped him generously. He was, after all, a boy, never mind that he was in his late 40s and had five mouths to feed at home.
I’ve yet to come across a tea-boy in Malta but every day I hear people talk of ‘salesgirls’, ‘biċċa cleaner’, or ‘iswed mill-Marsa’. No matter how top-notch their work, the linguistic devaluation means it’s likely these luckless types are being paid rubbish for it.
Not much joy in that, but there’s another side to it. If labour is neither empty nor homogenous, it follows that competitiveness is not simply a matter of how much that labour costs. It also follows that one can value one’s labour highly and still be competitive.
In a thoughtful piece called ‘Minimum wage pessimism’ (The Times, September 28), my friend and colleague Michael Briguglio pointed out that some of the world’s most competitive economies also enjoy ‘strong social models, including high wages’. He gave the examples of the Scandinavian countries and drew our attention to the World Economic Forum’s Global Competitiveness Index.
Briguglio was indeed right about Scandinavia. But I happen to have lived in and know well the country which trumps all others in the competitiveness rankings, and which has done so consistently in the past few years.
Switzerland is not a land you’d associate with sweatshops and meanness with the gruel. There is a streak of double-standards about that to be sure, as anyone who has seen Rabaglia’s Azzurro, in which Paolo Villaggio plays the part of an Italian foreign worker in , will know. Still, it’s fair to say that we’re talking about a place where labour is very well paid and enjoys all the trappings that come with that.
Somehow, the Swiss manage to value their work highly and still be outstandingly competitive, which would be metaphysical if the hat story were true. But I’ve already said it isn’t. The thing that makes Swiss labour so attractive is not just its cost in francs and rappen. The label ‘Swiss made’, which consumers are prepared to dish out obscene sums for, means something else altogether.
That something else didn’t just come about. It’s the result of a history that winds through the embroidery workshops of St Gallen, endless and snowed-up watchmaking winters in La Chaux-de-Fonds, and files of cowherds heaving Gruyère cheeses over mountain passes. It’s also the result of political decisions that saw past brute labour-cost thinking.
I’m saying that to talk about competitiveness as a direct product of labour cost is bad economic thinking. Certainly the cost of labour is something to keep in mind, but the discussion would be more interesting – and useful – if it dealt with how to help develop a workforce that valued its labour highly and was still competitive.
My second point has to do with direction. One way of looking at things is the Muscat way in principle and probably the PN way in practice, that is to leaven businesses and so on in the hope that there will eventually be enough crust to go round for all.
That’s not necessarily silly. It’s actually a straightforward version of what economists call ‘trickle-down’, and as such hardly an idiosyncrasy. The problem is that it assumes that the economy (society, in this sense) is a porous matter populated by quantities rather than people, and that goodies will simply trickle down unhindered.
Thing is, the whole point of making money is precisely to prevent it trickling down into other people’s pockets. There are a million ways in which trickle-down cannot and doesn’t work. (At best, it works as well as the rich man’s feast did for Lazarus.) Not unless politicians impose redistributive measures like, say, taxes.
To talk about trickle-down as a kind of automatic process is, once again, bad economic thinking. To actually practise it is a working-class nightmare.
Then again, the working class no longer exists. It has been written out of political discourse and action. I doubt the Labour Party will have any existential qualms, or pay any electoral price. For, as someone told me the other day, the poor will always be with us. And that’s not as Jesus meant it.
mafalzon@hotmail.com