The recently published survey results of the National Statistics Office (NSO)’s Statistics on Income and Living Conditions showed a widening gap of income inequality. Prompted by these poor results, the government hastily announced that it had commissioned a report on the basic living income. Hopefully, this report will not end up collecting dust.
The NSO survey revealed that in Malta, almost one in five persons is seriously struggling with meeting daily requirements for survival and inclusion. Moreover, almost one in three families cannot afford at least a week’s holiday away from home once a year.
The survey results also show that the number of households with dependent children that are at risk of poverty and social inclusion keeps increasing.
A report entitled Wage Income Distribution and Mobility in Malta, issued by the Central Bank in 2018 concluded that in Malta, wage mobility, that is, the ability of a person to increase his income regardless of overall wage growth, is very low.
Unlike the national minimum wage, which is set through a government-set mechanism on an annual basis, the living wage is an informal benchmark based on how much a worker/family needs to get by.
Pope Francis often reminds us that each person is responsible to care for and assist those less fortunate
Since Pope Leo XIII’s influential 1891 encyclical, Rerum Novarum, every pope has strongly advocated the principle that wages should offer adequate income for the family. In his encyclical Quadragesimo Anno, Pope Pius XI promoted the concept that all workers had the right to receive sufficient wages to support themselves and provide for their families.
This concept was influenced by the writings of a contemporary priest-economist Heinrich Pesch. Pesch’s ideal was based on what he had termed ‘solidarism’ where economic systems should promote social justice and prosperity may be attained by everyone.
Free-market advocates object to the government dictating what employers pay their employees. They also caution that the introduction of the living wage could result in job losses, affecting mostly those who are on lower wages. Supporters of a living wage argue that substandard wages come at a cost to businesses, due to high staff turnover, constant recruitment, training costs, customer service and lower consumption.
The concept of the living wage has had its fair share of debate in the local scene.
In 2010, the Malta Employers’ Association published a position paper. Some of the arguments that it put forward, such as avoiding the welfare trap and discouraging low productivity, were sensible cautions. However, drawing their conclusions on the compensation of state employees meant that they left a large proportion of the workforce unrepresented.
In 2016, the alliance Kampanja Paga Minima Diċenti lobbied for a more realistic minimum wage. They organised several awareness events. However, despite the fact that the number of people falling below the poverty lines keeps increasing, the alliance seems to have lost steam.
Caritas Malta has been lobbying for the creation of a living wage for several years. It has carried out serious research into what constitutes a living wage. Sadly, their voice seems to be lost in the wilderness.
Movements in other countries, such as the Living Wage Foundation in the UK, are highly active in lobbying for support both from employers and the government in securing a decent living wage to workers.
Although there is unanimous agreement that education and skills are crucial to securing a better income for a family, there will always be people who fall behind. Pope Francis often reminds us that each person is responsible to care for and assist those less fortunate.
The living wage is a big leap in reducing inequality and lifting families out of poverty. In setting the living wage, a balance needs to be struck between the responsibilities of the individual, the employer and the state.
Claudio Farrugia, Member, Catholic Voices Network