A study on living standards by Caritas Malta, an arm of the Maltese Catholic Church, revealed that 15% of the population are living below the poverty threshold. Unions claim the main cause is the prevalence of precarious work – the large number of Maltese workers who do not have permanent employment contracts – and they and Caritas Malta have urged the government to raise the minimum wage. Employers have said this could endanger the competitiveness of the Maltese economy.
Caritas Malta, a non-government organisation backed by the Maltese Catholic Church, carried out a study to find the minimum budget for a decent standard of living based on the cost of a basket of essential items. The study focused on low-income households in three categories:
The report used the minimum estimated cost of eight items: food, clothing, personal care, health, household goods, maintenance and services, education and leisure, transport and housing.
A one-month spending diary – 15August to 15 September 2011 – was kept by 15 households of differing backgrounds, ages, education and income levels. The minimum essential annual budget was estimated at €10,634 for two adults and two children, €8,581 for a lone parent with two children and €6,328 for an elderly couple.
Researchers compared their findings with the at-risk-of-poverty threshold (regarded as 60% of the average income) published in Statistics on Income and Living Conditions (SILC) by the Malta National Office of Statistics (NSO). The research reveals that disposable income is lower than the minimum benchmark for:
This means that 15.1 % of the population do not have the budget to maintain a decent standard of living. To counter this, the report recommended raising the minimum wage from €158 to €180 for a 40-hour week.
In the wake of the report, the General Workers Union (GWU), in collaboration with union confederation FORUM Unions Maltin, organised a national seminar, Precarious Work: New Reality? The Secretary General of the GWU, Tony Zarb, said that the poverty factor was mainly due to the large numbers of people in precarious work such as part-time jobs, short-term contracts, agency work and the self-employed.
He recommended to the Minister for Social Policy, Chris Said, who was at the seminar, the setting up of a task force to address the issue. Mr Zarb also urged that when appointing contracters to carry out public works, the working conditions offered to employees by the company tendering for the contract should be one of the main criteria considered rather than cost alone.
The minister responded that the government had been attempting to curb employment abuse through legislation. He referred to the recent Legal Notice 44 that clarifies the criteria that must be fulfilled for a worker to be classed as self employed which, it is hoped, will make it harder for employers to describe people who work for them regularly as self-employed sub-contractors. Part-time workers have also been given the same entitlements (pro rata) and rights as full-time workers.
Seminar delegates were reminded that Prime Minister Lawrence Gonzi had said in his May Day speech that the government would continue in its efforts to curb precarious work.
The employers’ associations have kept a low profile and did not attend the seminar.
The President of the Malta Chamber of Commerce, Enterprise and Industry (MCCEI), Tancred Tabone, said that it was ‘very easy and populist to suggest raising the minimum wage without considering where the money will come from’. He urged extreme caution so as not to endanger the competitiveness of the Maltese economy.
The Malta Employers Association (MEA) said that wages should be based on productivity rather than the cost of living, adding that ‘raising the minimum wage can lead to a destabilisation of the market’. MEA, however, said that it was preparing a charter to encourage standardised employment practices in the cleaning, security and care working sectors which are often accused of precarious work practices. It is setting up an independent board to administer the charter and handle allegations of breaches.
There were no concerns voiced about the criteria on which the poverty report was based. Its findings endorse union arguments and concerns about the prevalence of precarious work and its ramifications. The tone and response of the government and the initiative announced by MEA suggest a general acknowledgment that concrete action is needed to address the outcry caused by this report.
Saviour Rizzo, Centre for Labour Studies