Construction workers have been the least to benefit from Malta’s decade-long construction boom, a new analysis in a landmark policy document published this week suggests.
The new labour migration policy paints a stark picture of how the construction industry has spent much of the past decade relying on a rotating cast of mostly foreign workers, often paid a pittance.
The policy document, launched on Wednesday, says it hopes to protect workers from exploitation and reward employers who treat workers fairly, but the figures presented in the document suggest it has its work cut out.
Wages struggle to keep up with inflation
The policy reveals how wages across Malta’s various industries have changed throughout the decade, showing how workers in some sectors have seen sharp wage rises while others have lagged behind.
Citing EU data, the policy shows how wages in the construction industry have grown by less than 2% on average since 2013, lower than any other local industry.
This suggests that most construction workers have spent much of the decade battling the rising cost of living, with inflation rates frequently outpacing their wages.
Malta’s annual inflation rate between 2013 and 2023 averaged roughly 2%, although this rose dramatically in 2022 and 2023 as the global cost of living crisis hit Malta’s shores.
But even in the heady days between 2014 and 2019, when inflation was at a low and Malta’s construction boom was reaching its peak, most workers in the industry had little to celebrate, with their yearly wage rise still struggling to match the cost of living.
Other sectors fared much better.
Workers in the arts and entertainment industry (which includes Malta’s much-vaunted igaming sector) saw their wages rise by over 6% during the same period, those in real estate by over 5% and workers in ICT, healthcare, education and finance by over 4%.
The only workers who faced struggles similar to those in construction were farmers and fishermen, two sectors that, unlike construction, have been on the wane for years.
Only farmers and fishermen earn less than construction workers
The agriculture and construction industries are, unsurprisingly, the two lowest-paid industries in the country.
On average, construction workers earn €18,500 per year, slightly higher than the €16,400 pocketed by farmers and fishermen, but far behind most other industries.
Workers in education and healthcare, as well as those in the public sector, earn more than €30,000 on average, while those in IT and financial services rake in well over €40,000.
A study by KPMG, commissioned by the Malta Development Association, published late last year makes for an even bleaker read if you’re a construction worker.
It found that workers in the construction sector earned just over €13,300 in 2023, virtually unchanged from the study’s first edition back in 2017. However, it adds that this figure does not include earnings for workers who are registered as self-employed, for whom income has doubled since 2017.
Workforce doubles, but amongst Malta's least valuable industries
The policy also sheds light on the industry’s changing face, with a workforce that has almost doubled in size over a decade, in an effort to keep pace with new construction projects.
There are now over 20,000 employees in Malta’s construction industry, some 8,700 more than there were in 2013.
But, of these, almost 8,400 are third-country nationals, the group most vulnerable to exploitative work practices.
Meanwhile, the Maltese have moved away from the industry altogether, with over 1,000 fewer Maltese construction workers in the industry today compared to a decade ago, despite the unprecedented building boom.
As the policy itself drily says, “TCNs have played a significant role in the construction sector, where they filled many of the new positions created”.
But the policy also reveals a curious paradox.
The construction industry is, by some distance, Malta’s most labour-intensive industry, requiring an inordinately large number of workers to reap its rewards. In practice, the policy suggests, it takes four construction workers to generate as much economic wealth as a single worker in Malta’s arts, real estate or finance sector would on a typical day.
At the same time, despite the influx of workers and development projects in recent years, the construction industry is amongst the industries that have added the least wealth to Malta’s economy since 2013, trailed only by manufacturing and agriculture.