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MALTATODAY 3 July 2022

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4 maltatoday | SUNDAY • 3 JULY 2022 NEWS Real minimum wage eaten up by inflation When inf lation is taken into account a paltry 1% increase in the minimum wage was not enough to offset inf lation, which has resulted in a 3% loss in income for minimum wage earners Award of Honours and Decorations Malta pays public tribute to Maltese citizens who have distinguished themselves in different walks of life and whose contribution and achievement enrich the general well-being of their fellow countrymen. Any Maltese citizen, a group of persons or a voluntary organisation which is duly enrolled with the Commissioner in terms of the Voluntary Organisation Act may be nominated for the award of an honour on Republic Day. Nominations for 2022 will be received by the Nominations Committee on the prescribed Nomination Form, addressed to the Chairperson, Nominations Committee, Office of the Prime Minister, Auberge de Castille, Valletta VLT 1061, by not later than Wednesday, 3 rd August 2022. Nomination forms may be collected from the Office of the Prime Minister, Auberge de Castille, Valletta or downloaded from the website of the Office of the Prime Minister www.opm.gov.mt. For further information, one may contact the Cabinet Office on 22001481. The persons nominated should neither be approached for details, nor informed about their nomination. CONTINUED FROM PAGE 1 The Eurofound report this year provides a more pessimistic pic- ture of changes in minimum wages. Countries are divided into three groups, based on the trend in the real minimum wage rate – a group of six countries where re- al rates have increased, eight that saw a modest decline, and seven with a "significant decline" in real income of 3% or over. At 1%, the statutory increase in the minimum wage in Malta was the second lowest among the 21 EU countries which have a mini- mum wage mechanism. Moreover, in gross terms Por- tugal's minimum wage, which increased by 6% between 2021 and 2022, has now overtaken Malta's. While Maltese mini- mum-wage earners saw their real income decline by 3%, Por- tuguese workers have seen their income increase by 2% when in- flation is taken into account. The decrease in the real pur- chasing power of Maltese work- ers took place despite Malta hav- ing had the third lowest increase in its cost of living in the same period. Since minimum wage in coun- tries like Malta is pegged to the cost of living and adjusted on an annual basis, the report pre- dicts this automatic update "will produce much higher increases in the statutory rates if inflation trends persist". In fact, in countries where wag- es are adjusted regularly and not on an annual basis, workers are already benefitting from wage increases. These include two upgrades of 2% to the Belgium statutory rate in March and May 2022 due to indexation mecha- nisms, while the Greek minimum wage was increased by over 7% in May 2022 as a result of inflation concerns. In France, a further au- tomatic increase in the statutory minimum wage (2% increase, €25 per month) is shortly expected due to rising inflation. The report shows that based on the Gini index, Malta experi- enced the largest increase in wage inequality between 2017 and 2019 in contrast to Spain, which experienced the sharpest reduc- tion in the gap between high in- come and low income workers. The Gini index measures income inequality. The reduction in wage inequal- ity in Spain is attributed to the hike in the Spanish minimum wage in 2019, which "resulted in a remarkable increase in wage levels at the bottom of the wage distribution and in a significant reduction in wage inequality." Malta set up its new Low Wage Commission with social partners in 2017, with a remit to create a new mechanism for adjusting the minimum wage and issuing recommendations to the govern- ment. It will make its first recom- mendations in 2023. Despite the Maltese govern- ment's claim that it wants to en- sure a decent income for every- one in Malta, in November 2021, the government decided not to publish a report on a basic liv- ing income that it commissioned in 2020, stating that it would be used only as an 'internal working document'. Finance Minister Clyde Carua- na has acknowledged the need to raise the minimum wage 'to have a good standard of living', but which is balanced by decreasing companies' income tax. Malta is considering reforming its in- dexation mechanism, partly to take stark rises in inflation into account. The report also refers to the rapid increase in courier work, especially in the food-de- livery sector with over 1,200 non-EU nationals working with food-courier platforms being em- ployed on 'illegal work contracts'. "The problem appears to stem from the fact that, while accord- ing to Malta's employment laws, third-country nationals must be employed on a full-time contract, these workers were being recruit- ed as self-employed people, and potentially being subjected to ze- ro-hours contracts."

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