Sociologist from Malta

Wednesday, September 29, 2010

Increase the minimum wage

Michael Briguglio
Malta Today Tuesday 28 September 2010

In the coming weeks we can expect a lot of statements and discussions on the budget.

The Nationalist Party will probably say that in spite of the turbulent global economic situation, the Government has managed to attract investment and create jobs. Labour will probably say the opposite, adding that people are being taxed for corrupt practices (of course, like the PN, PL will not oppose the financing of political parties by big business and both parties will keep Malta’s system of political money laundering in place)

Employers’ associations will speak up against the statutory increases in cost of living compensation, and workers’ unions – blue or red – will try to defend this right and others won during the years. The GRTU will use its strategic political position to get the best deal possible for its members. Of course there are many other protagonists, but usually it is these 5 voices which seem to be the loudest come budget time.

In the coming weeks Alternattiva Demokratika, the Green Party will be presenting various proposals covering various areas of society. But to set the ball rolling, I would like to re-present a proposal which we have been putting forward for some years now, and which the PN-PL duopoly has been consistently opposing – an increase in the minimum wage.

It is more than evident that Malta’s minimum wage does not suffice to meet the cost of living. Besides, more and more workers are being involved in precarious low-paid and unsecure employment especially in contractual and part-time jobs. Many have to work more than one job to make ends meet, and the work-life balance is heavily tilted towards the former.

To make matters worse, the PN-PL duopoly is opposing the European Commission proposal for a working time directive, which would stop employers forcing their workers to work very long hours. In short, the two parties in parliament want workers to make more money by working extra long hours and having less time for their family and for leisure. PN-PL will not dare propose increase in wages!

An increase in the minimum wage, including that for part-timers and contractual workers on a pro-rata basis would hopefully improve the situation of the most vulnerable workers. It would also encourage more people to enter the formal labour market, making work pay. Of course, such an increase would have to be sufficient to cater for the realities of today, and this should not exclude a realistic assessment of social benefits, as some are abysmally low or even inexistent – given that certain vulnerable groups are being excluded from them.

The prophets of profit will tell us that an increase in the minimum wage will be a disaster for the Maltese economy. Yet I ask: how do countries with higher wages than Malta’s still attract investment? Of course, wages are just one (important) factor amongst others in the attraction of investment – other factors including, for example, productivity, bureaucracy, infrastructure, environmental considerations, fiscal incentives and so forth.

In this regard, Green economic policy believes that rather than putting more tax on ‘goods’ such as labour and sustainable practices, the burden should be put on ‘bads’ such as practices which are harmful to the environment.

In short: It’s about time to increase Malta’s minimum wage. What are we waiting for?

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