The Chamber of Commerce and Industry said today that it took strong exception to a suggestion reportedly made by the Minister for the Family and Social Solidarity (Marie-Louise Coleiro Preca) that the Government was considering an increase in the minimum wage. 

"This reported suggestion squarely contradicts the Labour Party’s solemn pre-election declaration that the minimum wage would not be increased beyond cost of living adjustments," the Chamber said.

It insisted that wages were a function of productivity and not of spending power and it did not agree that a raise of the minimum wage was a viable solution to eliminate poverty. 

"Poverty is a sensitive matter to which there are no short-cut solutions such as the one being proposed.  Increasing the minimum wage is a short-sighted approach.  Besides, the effect of this measure on the intended beneficiary would be short-lived.  On the contrary, any measure to address poverty needs to be carefully designed and targeted specifically at supporting, in a sustainable manner, the spending power of the cohort of people who are at the risk of poverty."

The chamber warned that a raise would  inevitably bring about a domino effect further up the ranks and across the whole economy to the detriment of cost competitiveness. 

It reiterated its call for the cost of living adjustment mechanism (COLA)  be revised  to ensure a better alignment of wage and productivity developments.