Issue link: https://maltatoday.uberflip.com/i/1491702
10 NEWS maltatoday | SUNDAY • 5 FEBRUARY 2023 JAMES DEBONO MALTA registers the third lowest increase in its statuto- ry minimum wage according to a comparative study by the European Foundation for the Improvement of Living and Working Conditions (Euro- found). The study shows minimum wages have increased across most EU member states, with the increase ranging from over 20% in Germany and Latvia, to 5.4% in Malta. The only countries where nominal rates have not in- creased between January 2022 and January 2023 was Spain, where negotiations are still ongoing, and Cyprus, where a statutory minimum wage has just been introduced. But the report notes that Mal- ta introduced an additional annual Cost Of Living Allow- ance mechanism for vulnerable households, which foresees an extra benefit to be paid, de- pending on changes in infla- tion. Thanks to this mechanism the State disbursed €16.2 mil- lion to 45,000 households, with the average payment amount- ing to €643. The mechanism addresses all those who earn less than the average income, which stood at €17,796 in 2022. While minimum wage in Malta increased by only 27% between 2010 and 2022, from €647 to €835, in Slovenia the minimum wage has increased by a staggering 102% from € 647 to €;1304. In the same peri- od the minimum wage Lithua- nia increased by 262% from just € 232 to €840. Malta addressed inflation through increased expendi- ture by the State, but some EU countries also resorted to ad hoc increases in the minimum wage paid by employers. In Germany, in addition to the regular increase for July 2022 set by the Minimum Wage Commission, another increase to €12 was made in October 2022 by the government. The Netherlands opted for a special increase, beyond the regularly applied formula, resulting in an increase of 10.15% since the last increase in July 2022 (or 12.1% since January 2022). Belgium had a series of six in- creases since January 2022 as a result of its policy based on automatic indexation mecha- nisms aimed at ensuring that statutory minimum wages are updated in line with inflation. In France, two additional ad hoc increases were based on the regular indexation formu- la in 2022. Luxembourg ap- plied one additional increase with automatic indexation, but postponed a second increase by 12 months, to ensure predicta- bility for companies. Despite the abnormally large increases for 2023, the report suggests that in most countries this will not be enough to im- prove the purchasing capacity of minimum-wage earners. On the positive side, mini- mum-wage earners will have benefited from significant pur- chasing power gains in Germa- ny and Belgium, and to a lesser extent in Latvia and Romania. On the negative side, the nom- inal hikes in January 2023 may not be enough to avoid signifi- cant falls in purchasing power among minimum-wage earners in some central and eastern Eu- ropean countries like Czechia, Hun-gary, Slovakia, Estonia and Lithuania which were af- fected by high inflation rates The report warns that a fur- ther deterioration in minimum wages in real terms is to be expected across the member states, unless further increases in nominal rates take place. jdebono@mediatoday.com.mt Thank you... for having bought this newspaper The good news is that we're not raising the price of our newspaper We know times are still hard, but we have pledged to keep giving our readers quality news they deserve, without making you pay more for it. So thank you, for making it your MaltaToday Support your favourite newspaper with a special offer on online PDF subscriptions. Visit bit.ly/2X9csmr or scan the QR code Subscriptions can be done online on agendabookshop.com Same-day delivery at €1 for orders up to 5 newspapers per address. Subscribe from €1.15 a week Same-day print delivery from Miller Distributors mt Malta has third lowest increase in statutory minimum wage in EU