Issue link: https://maltatoday.uberflip.com/i/1477424
maltatoday | SUNDAY • 28 AUGUST 2022 8 INTERVIEW What's more important: competitivity, The General Worker's Union has come out strongly against a recent suggestion, by the Chamber of Commerce, to amend the terms of the Cost of Living Adjustment – COLA – mechanism… at a time when the wage-increase is predicted to be as high as €10. Naturally, as a union you are entitled to protect your members: isn't it true, however, that the Cham- ber is equally entitled to protect the interests of its own mem- bers… by resisting a massive increase in their overheads, at such an economically-sensitive juncture in time? Let's put it all into context first. The agreement we are talking about, was reached on a national level – in fact, it was called the 'National Agreement of Indus- trial Relations'; and it was signed almost 32 years ago, in Decem- ber 1990. As far as I remember, the sig- natories were the government; the General Workers Union; the Federation of Industry; and the CMTU. And apart from estab- lishing an Industrial Tribunal, it also specified a wage-increase [COLA] that is tied to inflation; and a mechanism for how that increase is calculated, and given out. Now: this agreement has al- ways been adhered to, in the past. Does that mean we [trade unions and employers] have always agreed? No, of course not. For instance, when – in 2015 – the COLA wage-increase worked out at only 58c… I was one of those who argued that this was 'not enough'. At the same time, however, that was the amount calculated according to the agreed formula; and the formula itself is moni- tored by an independent board, which analyses the household budgetary surveys, and the retail price index. As such, there is no choice but to abide by the terms of the agreement. What I'm saying then, is that… it's OK to 'disagree' with the cal- culated sum – I myself saw 58c as insufficient, back in 2015. But it's not OK to challenge the en- tire agreement, simply because you disagree with its results. Meanwhile, when you look at how COLA actually worked out, in recent years: you will see that, from 2010 until 2022, the aver- age wage increase was €2.88. In 2022 it was €1.75; In 2020, it was €3.49… and the highest it ever reached was €5.82, in 2010. But over the years, it averages out at only €2.88: which (let's face it) is not exactly 'out of this world'. And don't forget that in two of those years (2017/18), there was also a national agreement to raise the minimum wage by €8. Part of this agreement also stipulated that workers earning more than the minimum wage, would get an extra raise – over and above COLA - of €2: one euro for 2017, and one euro for 2018. All those increases are also factored into that average… Fair enough; but those figures also mean that next year's CO- LA will be around five times the national average, for the past 10 years; and almost double the highest amount it has ev- er been. Doesn't the Chamber have a point, then, that this rep- resents an unprecedented 'axe- blow' to the survival chances of some Maltese businesses? As I was just saying: the Cham- ber has every right to 'disagree'. I'm not contesting that. And be- sides: as a union, we are always open to discussing possible revi- sions to the formula. A few years ago, for instance, there were national discussions, within the MCESD, on whether the CO- LA mechanism should remain linked only with 'inflation'; or whether it should also take in- to account other issues, such as 'productivity'. We had no problems partici- pating in those discussions, at the time. And as far as I can re- member, it wasn't because of the trade unions, that they did not result in any decision to actually revise the mechanism. The fact remains, however, that the mechanism was NOT revised. It remained the same as it has always been, since 1990. So what I object to, is not the fact that the Chamber 'disagrees'… it's that they suddenly come out, only now – a mere six weeks be- fore the Budget – with proposals to change the entire agreement itself, from top to bottom. If, on the other hand, they limited their proposal only to 'discussing possible future changes'… it would have been a different story. We have no problems entering into further discussions, with a view to pos- sibly amending the agreement in future. In fact, we even said so in our pre-budget document. We are always open to discussion; as a union, we take pride in the fact that we have a healthy social dialogue, in this country. What we can't accept, howev- er, is that the agreement itself is changed now – literally, at the eleventh hour – simply because, this time round, it happens to work out to the disadvantage of employers. Meanwhile, another thing to bear in mind is that the COLA mechanism is retroactive in na- ture. And this means that - while it is true that the wage-increases will have to be paid out by the employer - it is still money that the employee would already have 'lost'. Because if the formu- la establishes that the cost of liv- ing has gone up by €10, between 2021 and 2022… the actual €10 wage-increase will only be given out in 2023. Effectively, then, the workers' purchasing power will already have been reduced; and the wage-increase is intended to compensate those workers, for money that has already been – so to speak – 'taken away from them'… All the same, however: you seem to be talking about 'em- ployer's money' as if it were some kind of 'infinite resource'. Yet we've only just come out of two years of COVID – where nearly all local businesses were at a standstill – and even now, the same businesses have to rely on government's absorp- tion of energy costs, exacerbat- ed by the Ukraine war. In view of all this: it is even realistic to insist on an agreement, which will only saddle employers with an additional, exorbitant cost? [Shaking his head pre-emptive- ly] Look: if we're going to talk about 'competitivity', then we also have to ask ourselves a few basic questions. Like, 'What is more important: competitivity, or the well-being of people?' Be- cause today, we know with cer- tainty that the cost of living has gone up by €10 a week. This is a statistically proven fact; and it is also a fact that the most affected products involve foodstuffs, and other basic necessities. So what are we actually sug- gesting, here? That – in the name of 'competitivity' – we should simply allow low-income GWU secretary general JOSEF BUGEJA lambasts the Chamber of Commerce's claim that next year's COLA adjustment represents an 'existential threat' to Maltese businesses, arguing that local competitivity is actually expected to increase – not decrease – in the near future Raphael Vassallo rvassallo@mediatoday.com.mt