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Malta: Labour Leader’s Living Wage Proposa
Times of Malta

September 27, 2010
View the Original Article

When Labour leader Joseph Muscat suggested the other day that it was time for Malta to start thinking about the concept of a living wage, he might have set some alarm bells ringing among a cross section of employers. He presented the proposal as an exciting new concept and wished that Malta would be at the forefront of the movement for the payment of a living wage. Well, the concept may be exciting but it is definitely not new, though there appears to be renewed interest in it in a number of countries, particularly in Britain where the living wage campaign has made great strides since 2001.

The subject has been well studied and dissected for a number of years, and even the Church has gone into it. Still, while Dr Muscat may have erred a bit, the topic does certainly merit consideration, definitely more than some other boring subjects that keep coming up regularly. The payment of a living wage does not, of course, necessarily lift the receiver of such wage from poverty, as, for various reasons, he may not be able to, or he may choose not to, use the money for the purpose it is given to him. This is an age-old argument, one that is not forceful enough to write off the living wage concept.

What wrong is there if profitable companies opt, voluntarily, to treat their employees better and, instead of paying the lowest ranks of its workforce a minimum wage, decide to pay them a living wage? In fact, they would only be doing the right thing. And in doing so, they help raise living standards and at the same time set an example to other employers. When employers usually mount stiff opposition to the award of the annual allowance decreed by the government to make up for the rise in the cost of living, one would naturally expect them to look at the proposal with some trepidation. Yet, there is surely no harm in promoting the concept.

It may well take time for the living wage to take root but, through further economic progress, it might become possible for firms, particularly those employing a large number of unskilled workers, to voluntarily decide to pay a living wage instead of the minimum wage. At a later stage, the government may even decide to make the payment of a living wage a requirement for those taking up government contracts.

One argument against the payment of a living wage is that firms may tend to take on fewer workers if they are to pay a living wage, thereby raising the number of those out of work. On the other hand, workers who get a living wage tend be happier at their place of work and are therefore more productive, something that benefits their employers directly.

As expected, the two largest trade unions have reacted favourably to the Labour leader’s suggestion, with both obviously describing it as positive. This is particularly so, says the General Workers Union’s general secretary, if it is linked to collective agreements. His opposite number at the Union Ħaddiema Magħqudin said his union planned to explore the concept in its forthcoming document People’s Social Vision 2015, which it would be launching later this month.

However, given the time usually taken in Malta to introduce new concepts, it is hardly likely that discussion on the proposal will pick up any momentum before the next election, if at all.