Issue link: https://maltatoday.uberflip.com/i/976374
9 maltatoday WEDNESDAY 2 MAY 2018 Editorial Prosperity, but not for all MaltaToday, MediaToday Co. Ltd, Vjal ir-Rihan, San Gwann SGN 9016 MANAGING EDITOR: SAVIOUR BALZAN EXECUTIVE EDITOR: MATTHEW VELLA ASSISTANT EDITOR: PAUL COCKS Tel: (356) 21 382741-3, 21 382745-6 • Fax: (356) 21 385075 Website: www.maltatoday.com.mt E-mail: newsroom@mediatoday.com.mt Traditionally, May 1 is 'Work- ers' Day'. As such, perhaps it is time to consider why – in this age of quasi unprecedented economic growth, a national surplus, record unemployment and a decrease in the national debt – wages have not risen adequately to proportionately reflect our economic success as a nation. At a business breakfast organised by the Nationalist Party last weekend, economists noted that, while wages have increased, the correspond- ing increase in profit margins across the board was 'dispro- portionate'. Economic growth is creating jobs and generating wealth; but it also fuels a con- struction boom that has led to higher property and (especially) rental prices. This inflationary pressure has crippling effects on purchasing power; and it stands to reason that the most adversely affected will be the poor and materially deprived. It is encouraging to note that poverty statistics have fallen in recent years: but we must also question our national defini- tions of poverty. Malta is si- multaneously experiencing the rise of a new economic bracket: people who are not necessarily 'materially deprived', but who struggle to cope with rising basic expenditure: rent, food, leisure, etc. If prevailing economic trends continue, and the same dis- proportion between economic prosperity and wage-increases persist – we may very well expe- rience a return to the more tra- ditional definitions of poverty: i.e., homeless people eking out a living on the streets. To avoid this scenario, we should start looking into how wages can fairly and propor- tionally reflect the economic successes registered. That is the only way to ensure that all workers and families will actu- ally and realistically share in the prosperity currently being generated. However, recent wage increas- es already fell short of expecta- tions in 2017: let alone this year and in future. An agreement last year between government and the Malta Council for Economic and Social Develop- ment (MCESD) resulted in an increase in the minimum wage. An estimated 5,000 persons on minimum wage are now enti- tled to a mandatory €3 increase per week upon completion of the first year of employment with the same employer; and a further €3 weekly upon comple- tion of the second year. The agreement also stipulates that this year and next, persons on the minimum wage will earn an extra €1 per week in addition to this year's COLA. By 2019, therefore, the minimum wage will have been increased by a maximum of €8 per week – or €416 – in addition to the nor- mal cost of living adjustment (COLA). This is a far cry from what the Campaign for a Decent Mini- mum Wage (KPMD) was call- ing for: an increase of 11% over three years – €80 monthly over and above COLA increases. The increase announced in April 2017 works out at around 4.4%. Similarly, research carried out by Caritas suggests that the wage rise will not be enough to cover the corresponding increased cost of living. What neither KPMD nor Caritas could foresee at the time, however, was that Malta's eco- nomic performance would also exceed expectation. Given that the country performed better than previous indications, it remains questionable whether that deal – even if concluded just last year – has already been superseded. One must also ask whether part of this success may be at- tributed to a low wage structure that permits such high profits in the first place. If so, that would make Malta's economy reliant on cheap (mostly imported) la- bour... a perception government strongly rejects. Moreover, it would only lay the foundations for a very different Malta in future. In a sense, the changing demographics make that future all but inevitable; but there are measures that can be taken to avoid the worst case scenario. The same economists noted that Malta must take steps to prepare for the impend- ing social changes. As MEA director Joe Far- rugia put it: 'With a resident population fast moving towards the 750,000 mark in a few years' time, the country needs a strategy on integration; policymakers have to anticipate demographic change to address the economic, social and infra- structural challenges ahead.' This adds another dimension to the issue: the prevailing trend also leads to precarious jobs, es- pecially among foreign workers who are not unionised. Foreign workers are proving indispensa- ble in industries where Maltese no longer want to work. But this necessity cannot be used to justify or ignore a wholesale disregard for their basic rights and conditions of work. It is imperative that the rights of these workers are safeguard- ed, as are Maltese workers' rights. If necessary, they should be granted right and access to join a union. This would minimise the risk of an underclass of work- ers that could potentially put whole industries at risk. It would also ensure that a decent level of wages is guaranteed across sectors, as employers would not be able to resort to off-the-books employees to the detriment of regularised tax- paying workers. Above all, it would ward off the uncomfortable impression that Malta is carving out its own prosperity – which mani- festly does not 'trickle down' to everyone – directly from the exploitation of vulnerable workers, with dangerous pos- sible social ramifications. This would hardly be an achievement to boast about. If we are to grow into a prosper- ous nation, let's also make it a fair one, too.