Issue link: https://maltatoday.uberflip.com/i/1544603
21 maltatoday | SUNDAY • 26 APRIL 2026 NEWS Non-EU Workers earn 38% less than national average Central Bank of Malta analysis puts percentage of total workers in Malta earning less than €12,000 at 6%, says high turnover of foreign workers skews statistics and paints bleaker picture than it actually is MALTA'S labour market is characterised by a stark na- tionality gap in wages, with third-country nationals (TCNs) earning significantly less than their Maltese and European counterparts. The information comes from a detailed analysis of Malta's labour market by the Central Bank. According to a new discussion paper by Aaron Grech, Chief Officer of the Economics Di- vision at the Central Bank of Malta, the median employment income for third-country na- tionals who worked a full year in 2024 stood at just €18,200. This figure is approximately 38% lower than the national av- erage. The report, titled The Impact Of Labour Turnover On Mal- ta's Wage Distribution suggests that while foreign workers have driven much of Malta's recent employment growth, their com- pensation remains largely tied to basic wages, lacking the bo- nuses and allowances frequent- ly enjoyed by local workers. Parity between Maltese and EU nationals While TCNs lag behind, the study finds a surprising level of parity between Maltese and EU/ EEA citizens. When the data is restricted to those who com- pleted a full year of employ- ment, the median income for Maltese nationals is €32,500, while EU/EEA nationals earn a nearly identical €32,700. This 1% difference suggests that EU workers—many of whom are concentrated in high-paying sectors like gam- ing, or hold managerial and pro- fessional roles—have reached earning equilibrium with the Maltese workforce. This contradicts earlier per- ceptions that foreign workers across the board were depress- ing median wage levels for the entire economy. Correcting the "low wage" narrative The primary objective of Grech's report is to correct recent media reports that sug- gested a much bleaker reality. This is because raw administra- tive tax data presented in par- liament suggested that one in four full-time workers in Malta earned less than €12,000 annu- ally. However, the Central Bank analysis proves these claims were based on a fundamental misunderstanding of the data— it failed to account for labour turnover. Because Malta has a highly dy- namic workforce, many people appear in tax records as having "low annual income" simply be- cause they only worked in the country for a few months of the year. "The inclusion of so many tax- payers with just a few months of employment income depressed greatly the average and median wage," Grech notes. When the dataset is cleaned to include on- ly those with a full year of social security contributions, the sta- tistics shift dramatically. The prevalence of workers earning under €12,000 drops from 25% to less than 6% The actual median employ- ment income is €29,137, which is 28% higher than unadjusted figures suggested. The average wage for a full- year worker is €35,640, a quar- ter higher than the estimates widely quoted in the press. The turnover distortion The report identifies high turnover as the "critical factor" distorting public perception. In 2024, only 62% of all full-time taxpayers actually worked a full 12 months. This volatility is most extreme among foreign la- bour, where less than half (46% of TCNs and 48% of EU nation- als) remained in their jobs for the entire year. By including these "part-year" workers in annual averages, previous reports gave a "com- pletely wrong impression of the local economy's wage struc- ture". Rising inequality Despite the upward revision of average wages, Grech confirms that wage inequality has risen since 2012. The Palma Ratio—which com- pares the top 10% of earners to the bottom 40%—increased from 2.1 to 2.4 over the last decade. However, the report argues this increase is mostly driven by social changes. These include record numbers of women, older workers, and former social benefit recipients having joined the workforce. While these groups often enter at lower wage brackets, increas- ing statistical inequality, their participation reduces overall household poverty and boosts future pension entitlements. JAMES DEBONO jdebono@mediatoday.com.mt