In January, Malta’s minimum wage will be increased by 11%, the largest ever increase since it was introduced back in 1974, or nearly half a decade ago.
Many on the Opposition’s side argue that this is not enough, and that Government should push for more. At the same time, leading Opposition representatives come up with diametrically opposite statements. For instance, the Opposition’s spokesperson on the Economy, Ivan J. Bartolo, recently argued that firms had this increase forced upon them. The Leader of the Opposition, Bernard Grech, has also argued that Government should have compensated firms for the cost-of-living allowance (COLA) increase of next year, as it was the largest on record.
The current administration has managed, in a space of just six years, to achieve broad social agreement to raise the minimum wage. The first agreement, in 2017, awarded some increases to all workers, but more importantly led to a €6 per week rise to the minimum wage for those who had been on it for two years or more. The second agreement, signed before the last Budget, incorporated the €6 rise immediately and added to that another €2 raise over-and-above the COLA. The minimum wage will continue to increase in the following years by another €10 over-and-above the COLA.
Meanwhile, the children’s allowance is continuing to rise too, together with a more generous in-work benefit and a more widespread additional mechanism against the cost-of-living. Just in a few weeks, more than €30 million have been given in additional benefits to help families, and more is yet to come next year when the measures of the Budget 2024 continue to be implemented.
Italy: a totally different story
In neighbouring Italy, the situation is exactly the opposite. Not having a progressive government, the Italians are facing the challenge of austerity. The little support they had against energy price rises has disappeared with the liberalisation of the energy market. The Italian government is having to cut down its deficit, as the country’s economy stalls. While Malta is increasing the minimum wage, in Italy the government does not even want to have one at all.
Italy remains one of a handful of European countries without a minimum wage. The resistance from the Italian right-wing to the establisment of a minimum wage is long-standing, and they have managed to stop many attempts to have it introduced. They argue that collective agreements set wages across firms and sectors and there should not be any outside interference by Government. At the same time, the right-wing does all in its power to weaken the unions and decrease the reach of the Italian trade union movement.
Moreover, labour legislation means that most young persons are not in sectors where unions dominate. Many have contracts with no job security, let alone the protection of a collective agreement. It should therefore come to no surprise that, according to Eurostat, the poverty rate among young Italian workers is about twice that of young Maltese workers: 11% vs 5%. The same is the situation when one looks at female workers. In Italy, the rate of female poverty is twice that observed in Malta: 8% as against 4% (the EU average is 6%).