Issue link: https://maltatoday.uberflip.com/i/1201983
11 maltatoday | SUNDAY • 19 JANUARY 2020 NEWS these experienced a sufficient in- crease in income to live decently they would be able to contribute to the economic wheel." But any hint of government intervention on wages remains anathema for employers. For Farrugia it should be mar- ket forces, together with collec- tive bargaining, which should establish wage levels. Moreover, he refers to research conduct- ed by MEA according to which "overall, wages have increased substantially over the past four years". Borg himself acknowledges that most businesses already pay their employees enough for them to live decently, even if this is not always the case. Official statistics also show that Malta had the fourth lowest minimum wage increase this year in the EU, a nominal increase of 1.9% in 2018. It is here that Abela makes an interesting pitch: that of "of en- suring that wealth seeps down and does not get stuck at the top." The problem, as Reno Bugeja repeatedly asked, is how to ac- complish this. The living wage One solution proposed by so- cial justice activists worldwide to address widening inequalities, is that of introducing a living wage, defined by advocates as the min- imum income necessary for a worker to meet their personal and family needs, and not one limited to biological needs. The goal of a living wage is to allow the worker to afford a ba- sic but decent standard of living through employment without government subsidies. The concept was first touted in Malta by Joseph Muscat in opposition, but was abandoned with government limiting itself to a meagre increase in the mini- mum wage over three years. But asked by Reno Bugeja on whether a 'living wage' should be introduced to ensure that wages do increase, Abela insists that taking this step in present cir- cumstances is "not realistic" and would not be "sustainable". It is on this point where Abela is more in synch with employers than with anti-poverty activists. Borg defends the economic rationality of introducing a liv- ing wage and disagrees that this is not sustainable, pointing out that introducing a living wage is an inclusive policy, "and the economy thrives on inclusivity". "More agents in the econo- my means more consumption, which means more demand and more revenue to businesses, which in turn leads to less un- employment. Living Income can be calculated scientifically and can be implemented through policies that benefit the employ- ee and, by definition, the em- ployer." And while Abela hints that while the measure may be con- sidered at a later stage, Borg thinks that there could never have been a better time for this than now. "If now is not the time to dis- cuss how to introduce a Living Income then when is the time, when we have a deficit?" But Farrugia agrees with Ab- ela's caution on the issue of the living wage, warning this con- cept will "disrupt wage relativi- ties". "The emphasis should be on generating work of a higher val- ue added through which better conditions of employment may be afforded, and that employees are paid fairly for what they pro- duce." Farrugia admits that this is not an easy topic, acknowledging that adequate remuneration, whatever its definition, is a pos- itive concept in itself as people's purchasing power is an essential contributor to a vibrant econo- my. But he also points out that rais- ing wages may not even be the best way of addressing poverty because "emerging major pock- et of people at risk of poverty are not employees, but pension- ers and single parents. Merely adjusting wage levels will not necessarily address the situation faced by these segments." Equal pay for equal work Instead of introducing a living wage, Abela promises that he will focus on honouring his cam- paign pledge to ensuring equal pay for equal work, denouncing situations where employees em- ployed by sub-contractors are paid less than workers doing the same work in the same work- place. And while reiterating that "foreign workers are crucial for economic growth", he also in- sists "these should not be used to lower the wages of Maltese workers." Farrugia is more open to dis- cuss these reforms, even if he points at problems at implemen- tation stage. He reminds Abela that this matter has already been dis- cussed at length between the so- cial partners at the Employment Relations Board, and while there is a general consensus that it is unfair to have two persons doing the same work in the same com- pany and being paid at different rates, even if they have different employers (i.e. the sub-contrac- tor and the buying company) there is one major stumbling block. "The major issue is that the same principle will have to ap- ply with the employees work- ing for the same sub-contractor and doing equal work. There- fore one cannot have employees with the same employer – i.e. the sub-contractor – being paid different rates because they are sent to different sites, as it will contradict the scope of the equal pay principle." Don't shut down the debate What is sure is that Abela presently can drink from a well of good will, across the board. "Abela has numerous challeng- es ahead of him, but some of the points mentioned, togeth- er with the major reshuffle in Cabinet, do point towards a general strategy on the part of the new administration," says Farrugia. Anti-poverty activists also in- vite Abela to engage with their arguments, warning against shutting down debate on the liv- ing wage. "Shutting down debate is damaging to the poor, some of whom prefer death than liv- ing in constant fear," says Borg, who invites Robert Abela to do away with the bygone idea that the low-income earner betters his economic position only and exclusively when his employer makes more profit. "The trickle-down did not bring a real improvement in the situation of the vulnerable, nei- ther in Malta nor anywhere. He should look up 'trickle up eco- nomics': giving more to those at the bottom by direct govern- mental action." Minimum wage was finally increased, gradually over a three-year period, under Joseph Muscat and in agreement with unions and employers organisations Farrugia agrees with Abela's caution on the living wage: "The emphasis should be on generating work of a higher value added through which better conditions of employment may be afforded"