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Economic model for the rich - Anthony Buttigieg

Every day I read reports about our booming economy, our record low unemployment, the record number of jobs, the rise in the amount of money paid in wages, the rise in the mean wage, but no, I do not think, wow, everything is rosy in Malta, everything is hunky dory. On the contrary, I worry that under the shiny veneer of this marquetry of positive economic indicators, there is a rotten core.

You may ask, why is that? 

I will explain.

Let’s start with the economy. The whole point of a growing economy is for the citi­zens or residents of the State concerned to benefit from it in some way. Ideally the spread of the benefit would be fair and relatively equal. In the real world that is rarely the case. In the Malta of 2018, it definitely is not. Our economy has been averaging growth rates of around six per cent in the last few years but most of us have not seen anything like that growth in personal income or wealth.

Normally when there is a booming economy with full employment, upward wage pressure would kick in as employers vie with each other for an ever-tightening Labour market. This is not the case in Malta. Why? Well, as is very evident to all, huge numbers of non-EU citizens have been encouraged to come to Malta to work. Most come from countries where wages are much lower so they are happy to accept current wage levels, and many are filling less specialised jobs.

The tens of thousands that have come are artificially keeping wage pressure low while, through no fault of theirs, contributing to rising rental and property prices in the lower value property bracket, the bracket that mostly affects our pensioners, single parents and first-time home buyers.

These low wage-bracket foreign workers manage to ride the wave of rising accommodation costs by sharing, often six to an apartment. Locals on lower wages, let alone the minimum wage or the State pension, cannot compete and are simply being priced out.

Stories of people living in garages are not a myth, they are today’s reality. The main beneficiaries are the corporations, which are more interested in profit than employee welfare, and government policy is colluding with them by encouraging this practice rather than checking if it is really necessary.

Our government has decided that the measure of progress is profit. I challenge that measure

At the same time, expat workers are important to the economy. They generate tax income and they fill jobs we cannot fill, especially in high value-added companies. And that is the crux. The vast majority of well-paid jobs, those that push the statistic of average wages higher, are not going to locals, they are going to foreigners; not because of any sort of discrimination, but due to the simple fact that our education system has failed to keep up with the times and is not producing people capable of filling those jobs.

The fault is ours, so we need them and they are welcome. Ironically it is in this sector of the job market where upward wage pressure is to be found. So most of us are caught between a rock and a hard place. The jobs we have are not delivering a higher standard of living, and at the same time most of us cannot compete for the better paid jobs due to an education deficit created by decades of poor policy in this area.

So, in reality, average wages for locals are not rising and we are barely reaping any personal economic benefit, especially if you do not already own your own home.No problem, the economic boom is improving our quality of life as a nation, right?

Well, that is unfortunately not the case. Increased congestion, increased construction pollution and inconve­nience, increased strain on our services, the ever accelerating destruction of our natural and historical heritage, the increase in crime as the gap between poor and wealthy widens… these are not symptoms of a healthy nation getting healthier, quite the opposite.

To maintain a standard of living we have taken for granted most of us work extra (at least the jobs are there), fooling ourselves we are better off, while in real terms we are poorer per hour worked.

The economic model this government has chosen with the blessing of big business is making a very few at the top of the income pile richer. In the meantime we are paying an ever increasing price both in monetary terms, due to the rising cost of living and price to have a roof over our head, and in well-being terms, due to a deterioration in our quality of life.

Our government has decided that the measure of progress is profit. I challenge that measure. Better education, a fairer distribution of wealth, properly functioning services, a better urban environment and planning a sustainable economy – those are true measures of progress.

Our economy must work for us, not we solely for the economy.

Anthony Buttigieg is the leader of the Democratic Party.

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