Em­ployer or­gan­i­sa­tions call for cau­tion over rais­ing the min­i­mum wage

Malta Independent - - NEWS -

Malta’s pri­vate sec­tor or­gan­i­sa­tions rep­re­sented on MCESD (MEA, Malta Cham­ber, and GRTU) have jointly ex­pressed their con­cern on the di­rec­tion taken with re­gard to dis­cus­sions on poverty and the min­i­mum wage.

The em­ployer bod­ies be­lieve that the coun­try’s ef­forts should be tar­geted specif­i­cally at erad­i­cat­ing poverty whilst safe­guard­ing com­pet­i­tive­ness and long-term eco­nomic growth.

In the cur­rent eco­nomic sce­nario, the em­ployer bod­ies be­lieve that it is un­ac­cept­able to find cer­tain co­horts of the pop­u­la­tion that are still be­set by poverty and de­pri­va­tion. They be­lieve that it is the joint re­spon­si­bly of govern­ment, politi­cians, so­cial part­ners, em­ploy­ers, em­ploy­ees and civil so­ci­ety to en­sure dig­nity for the en­tire pop­u­la­tion. All stake­hold­ers have a role to play and im­por­tant re­spon­si­bil­i­ties to carry.

A pro­fes­sional re­port com­mis­sioned by the MCESD was re­cently pre­sented to so­cial part­ners. This re­port sheds doubt as to whether rais­ing the min­i­mum wage is the ideal mea­sure to solve. The re­port, in fact, sug­gests that it would be more mean­ing­ful to use more di­rect and tar­geted ac­tion.

Be­sides, Malta has an ex­tremely pos­i­tive track record of wage-bar­gain­ing at en­ter­prise level which is a rar­ity in the con­text of the EU. Through this sys­tem, wages are de­ter­mined fairly on the ba­sis of so­cial con­sid­er­a­tions but also on the ba­sis of pro­duc­tive and com­pet­i­tive con­straints. This es­tab­lished and recog­nised struc­ture ex­plains why only a small per­cent­age of the work­force in Malta earns a min­i­mum wage.

The is­sue of em­ploy­ers is not in fact with rais­ing the min­i­mum wage, but rather on the spi­ral effect this will trig­ger on wages across the board and be­cause of this, rais­ing the min­i­mum wage has se­ri­ous con­se­quences on na­tional com­pet­i­tive­ness. It is the duty of all so­cial part­ners to act re­spon­si­bly on this mat­ter. All stake­hold­ers must un­der­stand that these con­se­quences are well un­der­stood by all. Pri­vate busi­ness is the mo­tor of our econ­omy and it is the pri­vate sec­tor which fi­nances the coun­try’s so­cial se­cu­rity sys­tem. En­dan­ger­ing the pri­vate’s sec­tor’s com­pet­i­tive­ness and the Malta’s ex­port po­ten­tial may in­deed harm the very ba­sis of our econ­omy and with it the po­ten­tial to sus­tain the coun­try’s safety net.

Lip ser­vice by both the po­lit­i­cal par­ties on rais­ing the min­i­mum wage without con­sul­ta­tion with em­ployer rep­re­sen­ta­tives and pre-empt­ing the dis­cus­sion process se­ri­ously prej­u­dices the sit­u­a­tion and does not bode well for dis­cus­sions in which the so­cial part­ners have now been in­vited to par­tic­i­pate.

These tac­tics are short-sighted, ir­re­spon­si­ble and un­ac­cept­able. Em­ployer bod­ies ap­peal to all stake­hold­ers to re­frain from po­lit­i­cal games that risk the liveli­hood of em­ploy­ees and the coun­try’s long-term eco­nomic and so­cial de­vel­op­ment.

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