Issue link: https://maltatoday.uberflip.com/i/1053035
14 How does Malta compare to the rest of the EU in terms of employment and wages? Malta's economy is booming and its growth shows no sign of cooling any- time soon. The country does not even meet the current demand for workers and is importing labour from over- seas. But there is a large cross-sectoral wage disparity: the public sector em- ploys predominantly Maltese nation- als, whereas the private sector relies on an international workforce which constitutes 30% of its employees. In the lucrative online gambling sector, executive pay can be over €100,000 annually, and non-graduates can as- pire to salaries of €35,000 – this sector attracts employees mainly from north- ern Europe. Lower-paid jobs – waste collectors, cleaners, caregivers, waiters – are also performed mainly (but not exclusive- ly) by guest workers, with wages as low as minimum wage, €745 per month (€8,950 pa). Such a pay is not suffi- cient to cover basic expenses on food, clothes and housing rent. At the same time, the lucrative sectors are driving up the cost of living across the board: the price of housing has exploded, and so low-income earners are now strug- gling. The NSO estimates over 80,000 peo- ple (19.2% of the population) are at risk of poverty, a worrying situation caused by the increasing cost of living. The divide between the richest and the poorest sectors of the population is growing. You conducted a research on a possible universal basic income (UBI) framework in Malta: what would it amount to and how would it be financed? The starting point of my research was to understand the massive chang- es that robotics and Artificial Intelli- gence (AI) are about to bring to the job market. We are not talking about 10 years' time: it is already happening. Depend- ing on the level of your skills, your job is almost guaranteed to become replaceable within the next 15 years. What are you going to do? Losing a job means being unable to sustain a living. Disappearance of jobs would also affect businesses: without having money to spend on the services and products, there will be no custom- ers. And AI is not a good customer. Thus, if there are no jobs, businesses too would risk losing their profits and close doors. This scenario is still to be addressed amongst business circles. One of the solutions to this challenge discussed internationally is universal basic income. The proposal caught my eye and I decided to explore what a UBI for Malta could look like. The very first question must be, "What kind of UBI would we like to have in place?" The approach should begin with asking what a UBI would aim for and who would benefit from it most. This is the crux of the matter because UBI models could vary sig- nificantly according to whose interests they are designed to suit, therefore, the numbers and the financial aspects would differ depending on the UBI's purpose and functions. Let us consider a UBI which acts as a safety net and is designed to eradicate financial poverty. In this case, every single resident would receive a living wage. I'm emphasising on 'financial poverty' because single parents, peo- ple with physical and/or mental dis- abilities, and other vulnerable groups, require additional support on top of financial means. As a concept, UBI is often criticised for its supposedly demoralising ef- fect: without an incentive to work for survival, the critics say, people would be sitting at home and losing interest in life. I disagree. People have a tre- mendous creative drive. If we do not have to work for survival, we can put our energies to constructive use – to maintain our network and develop our interests. We perform best in areas we are passionate about while being sur- rounded by people with whom we feel most comfortable. Hence, a UBI which eliminates the need to cling to a dreadful 'bullshit job', or a job done merely to survive, would inspire people to leap forward in the subjects they are most excited about. This development would cer- tainly have a social and economic val- ue: adequate conditions will stimulate economic activity which will translate into employment. The change that a UBI will bring about will not be about whether peo- ple will work or not, but how, where, when and why they work. I do not think that a UBI providing a living wage will hammer the economy. By contrast, a UBI will turbo-charge it. My research is, however, still at a preliminary phase and would require contribution by so- ciologists and economists. Great. We have established what kind of UBI we are aiming for. The next question is how to finance this welfare UBI in Malta. First and foremost, let us underline that a UBI will be beneficial for eve- ryone: it will guarantee safety to em- ployees while businesses will retain the customers. Working age adults (from 16 till re- tirement age) would need a minimum €850 to live on a month-to-month basis. Pensioners and disadvantaged individuals would receive €950 (a UBI would free them from the burden of bureaucracy so inherent to the pro- vision of welfare benefits). Children too would receive a small UBI, around €200. This model would cost between €4.5- 5 billion annually: approximately 40% of Matla's current GDP. The next question is, naturally, who is going to pay for such a UBI. This proposal is likely to cause panic amongst those who have the money. No single sector or entity in Malta has this amount to give. How can the funds be acquired and what are the likely impacts? According to Transparency Interna- tional, around €1 billion is lost due to undeclared sources of revenue and il- legitimate transactions in Malta annu- ally (this figure excludes the financial maltatoday | SUNDAY • 18 NOVEMBER 2018 NEWS Would a universal basic income in Malta work? Brace yourself for the AI revolution: what will happen when your job becomes inexistent in 15 years' time? Geoffrey Saliba says a universal basic income (UBI) for all residents will turbo-charge the economy, but it comes at a €6 billion price tag. Interview by RAISA GALEA I do not think that a UBI providing a living wage will hammer the economy. By contrast, a UBI will turbo-charge it the customers. Working age adults (from 16 till re- tirement age) would need a minimum €850 to live on a month-to-month basis. Pensioners and disadvantaged individuals would receive €950 (a UBI would free them from the burden of bureaucracy so inherent to the pro- vision of welfare benefits). Children vision of welfare benefits). Children