Issue link: https://maltatoday.uberflip.com/i/1479276
maltatoday | SUNDAY • 18 SEPTEMBER 2022 10 NEWS JAMES DEBONO MALTA'S lowest paid work- ers have seen the value of their wages fall by 5% this year, an analysis by the European Trade Union Council, based on Eurostat data shows. The study is based on the change in the real minimum wage between the summer of 2021 and that of 2022 after taking inflation rates into ac- count. An earlier study by Euro- found had already established that Maltese minimum wage earners had seen a 3% drop in their incomes between Janu- ary 2021 and January 2022. The latest study indicates that the situation has worsened in the second quarter of 2022. In this period the statutory minimum wage in Malta have risen by 0.9% but the rate of inflation has increased by 6.1%, resulting in a 5% drop in real wages. But while minimum wage workers in Malta have experi- enced a drop in income, they have been spared from far higher inflation rates in the rest of the continent. In fact, at 6.1% Malta registered the low- est inflation rate among the 21 countries analysed. But Maltese workers also re- ceived the second lowest in- crease in the minimum wage after Latvia. The study shows statutory minimum wages have risen by an average of 6.9% over the last year in the 21 EU coun- tries which have a minimum wage, compared to just 0.9% in Malta. But, in the same countries, the rate of inflation has increased by an average of 12.4% compared to 6.1% in Malta. The worse-off in the study are minimum-wage earners in Latvia, whose minimum wage remained unchanged while facing an inflation rate of 19.2%. Real statutory minimum wages have also fallen dra- matically since last summer in Latvia (-19%), Poland, (-11%), Slovakia (-9%), Czechia (-8%) and Lithuania (-8%). The least impacted are French workers, who face an inflation rate of 6.5% while benefiting from a 5.8% in- crease in their wages. Earlier this week MEPs greenlighted new EU rules on minimum wages to tackle in- work poverty. Members states will have to verify the adequa- cy of statutory minimum wag- es taking into account pur- chasing power and the cost of living. jdebono@mediatoday.com.mt Minimum wages have dropped by 5% as inflation rises Maltese minimum wage workers are least hit by inf lation but have benefitted from the second lowest wage increase in the EU Country Nominal Inflation Change to statutory rate (%) real stat. min. wage minimum growth (%) wage (%) Latvia 0 19,2 -19,2 Poland 3,5 14,2 -10,6 Estonia 11,9 22 -10 Slovakia 3,6 12,6 -8,9 Czechia 9,8 16,6 -6,7 Lithuania 13,7 20,5 -6,7 Hungary 5,8 12,6 -6,7 Ireland 2,9 9,6 -6,6 Netherlands 3,2 9,9 -6,6 Slovenia 4,9 10,8 -5,8 Bulgaria 9,2 14,8 -5,5 Luxembourg 5,0 10,3 -5,2 Malta 0,9 6,1 -5,1 Spain 5,2 10 -4,7 Portugal 6,0 9 -2,9 Romania 10,4 13 -2,5 Croatia 9,7 12,1 -2,3 Greece 9,6 11,6 -1,9 France 5,8 6,5 -0,6 AN overwhelming majority of European lawmakers voted in favour of adopting the EU's new minimum wage directive aim- ing to lift minimum wages in member states and strengthen collective bargaining. All Malta's MEPs voted in fa- vour of the directive: Labour MEPs Alex Agius Saliba, Cyrus Engerer, Alfred Sant and Jo- sianne Cutajar abstained; and Nationalist MEP David Casa. 505 members of Parliament voted in favour with only 92 votes against and 44 absten- tions. "People are really struggling to make ends meet. We have no time to waste, work must pay again," member of Parliament and co-rapporteur of the direc- tive Agnes Jongerius said. The EU Council is expected to formally adopt the directive later this month, which would then give member states two years to implement it in nation- al law. The directive has been crit- icised by Denmark and Swe- den, two countries that use a very light-touch labour market regulation based on collective bargaining instead of statutory minimum wages. Maltese MEPs were largely supportive of the European di- rective on adequate minimum wages, but they were cagey on a call by European trade unions for a mandatory 'threshold of decency', which would peg min- imum wages to average wages in member states. However, the directive will not force countries to implement a statutory minimum wage if they do not have one, which is the case for six member states. The member states that have a statu- tory minimum wage will have to ensure that it is "adequate". The adequacy should regularly be tested so the minimum wage can be reconsidered if circum- stances change, for example, due to inflation. For the purpose of assessing the adequacy of minimum wages, the directive proposes that member states use the reference values of 60% of the gross median wage or 50% of the gross average wage. These thresholds are high- er than the minimum wage in most EU member states, mean- ing that minimum wages might be increased in the coming years. Mounir Satouri, Green MEP, said that "thanks to this directive, 25 million workers Maltese MEPs vote in favour of EU's minimum wage directive