Issue link: https://maltatoday.uberflip.com/i/1447299
8 NEWS maltatoday | WEDNESDAY • 2 FEBRUARY 2022 By focusing on low wages the PN addresses a crucial bread and butter issue which could potentially raise living standards. But abstract concepts like "living income frameworks" are reminiscent of Joseph Muscat's living wage pipe dream PN's living income: repeat of Muscat's living wage pledge? TAKING a leaf from Joseph Muscat's pre- 2013 playbook, on Sunday Opposition lead- er Bernard Grech pledged to introduce a "living income framework": "We will make living income a reality after discussing and seeing with experts on how best to imple- ment it. Every day spent unable to live a de- cent life is a day wasted," he said. The PN's proposal addresses a social reality faced by thousands of workers, including foreign workers in sectors like hospitality and construction, whose ex- ploitation contributes to the creation of a two-tier society and could have a de- pressing impact on wages in general. The proposal is also timely, as international food prices are taking a greater bite from already low incomes. Statistics show that the in-work poverty rate – based on the proportion of working people who earn less than 60% of the national median in- come – has increased from 5.2% in 2012 to 7.4% in 2021. But it remains unclear how the PN plans to address this problem. On Friday, PN MP Ivan Bartolo said the party was still looking at several financial models that would see an adjustment in wages, with- out straining taxpayers or employers while allowing low-wage earners to attain a decent standard of living. Bartolo hinted that the proposal will be beefed up in the party's electoral manifesto. But it remains unclear how the PN can ensure a "living income" without actually increasing the wage bill for employers, or supplementing low incomes with greater public expenditure. Both avenues could be anathema for a centre-right party, which constantly lambasts government for over-spending and which in govern- ment excluded any increase in the mini- mum wage. And while concepts like "living income" and "living wage" are in theory more in- clusive and comprehensive than that of the minimum wage, as their aim is to achieve a decent standard of living for the entire household and not just the individ- ual employee, the only legal mechanism to increase wages is by raising the mini- mum wage. Moreover, increasing the minimum wage also militates against wage stagna- tion, as such increases trigger a domino effect on wage scales, to ensure that those just above minimum wage levels do not fall behind. One advantage of a living income is that in assessing the minimum level of income required, it takes into account family size and location. While a living wage is ap- plied in the context of hired workers, a living income includes any income earner – including the self-employed, pension- ers and welfare recipients. Semantics or real change for working people? The risk is that the PN's proposal could be an exercise in semantics. For if not clearly articulated, the proposal will even be ignored by those who would benefit from it. Gaining the trust of working class vot- ers – most of which tilt towards the La- bour Party – remains an uphill struggle for a historically elitist PN. If the PN wants to present a socially progressive vi- sion it needs to rally popular support for it and it could only do so by presenting clear life-changing proposals which can be translated into pounds, shillings and pence. For example in Germany, the new government has announced a plan to un- dertake a one-off adjustment of the mini- mum wage to €12 per hour (which would mean a further increase of 15% on its cur- rent level of €10.45 per hour), while leav- ing it to the country's Minimum Wage Commission to continue deciding on its regular adjustments. Yet the PN – like Labour – have opposed an EU directive pegging the statutory minimum wage at 50% of average wages and 60% of median wages, which would mean a pay rise for 24,323 Maltese work- ers. Even Parliament's own Foreign and European Affairs Committee criticised the European Commission's "one size fits all model" on a matter which should re- main a national prerogative. In fact, the greatest risk of embarking on a discussion on living income while min- imum wages remain amongst the lowest in the European Union, is that it could be a way for political parties to avoid taxing commitments and still give the impres- sion that they are giving importance to this issue. In reality the only parties who are making taxing commitments on this issue are the small centre-left parties; namely ADPD and Volt, with the latter proposing a minimum wage of €1,100. In this sense one has to acknowledge that large political parties with an aspi- ration to govern the country have to take into account the competitiveness of small and medium-sized businesses who create most jobs, many of which are still reeling from the pandemic. But parties like the PN can still strike a balance by coupling incremental increases in wages with fis- cal incentives and funding. Ultimately any progressive political party has to rec- ognise that businesses who are unable to ensure decent wages over a restricted time frame, are simply not sustainable in the long term. The living wage déjà-vu It was Joseph Muscat who first proposed a "living wage" in 2010, just two years af- ter being elected Labour leader. Yet as it turned out, advocating a living wage was Muscat's way of excluding a more taxing commitment to raise the minimum wage at a time when he was busy reaching out to the business community. In fact Muscat immediately qualified the proposal by making it clear that its imple- mentation will be voluntary and that the state will simply offer assistance to em- ployers who subscribe to this idea. Similarly to the PN today, Muscat in- sisted that "this issue will be the subject of detailed discussions and consultations with all stakeholders on this and other proposals with regards to the living wage concept." One of the possibilities he was consider- ing at the time was making the living wage a condition in awarding government and public tenders. While not excluding an increase in the minimum wage, "should competitiveness conditions allow", as the election approached Muscat was more categorical in excluding an increase in the minimum wage. Hypocritically, before the election, the PN – which had in actual fact left the min- imum wage unchanged except for COLA adjustments for decades – lashed back at Muscat, accusing him of "freezing" the minimum wage. Under Labour, the only revision to the minimum wage came as a result of an agreement between the social partners through which minimum wage earners became entitled to a mandatory €3 increase per week upon completion of the first year of employment with the same employer, and a further €3 weekly upon completion of the second year. Effectively the agreement excluded those in precarious and temporary em-