Misinformation does not help the minimum wage debate

The Malta Federation of Industry cannot leave unanswered a contribution on minimum wages by Karl Chircop, the Labour Party's main spokesman on social protection (June 21), and his previous statements on the subject.

Once again, I would like to clarify the FOI's position with regard to the two press releases it issued relating to the annual cost of living increase announced by the government in the budget speech. I would also take this opportunity to correct many other declarations made in the local press by other correspondents, associations or unions in this respect.

Firstly, it is true the FOI supported Malta's entry in the European Union. We did this on the basis of various studies commissioned specifically for this purpose as well as on a survey among our members in industry.

However, it is also true that, on many occasions, we expressed to the government, and to the party in opposition, our concern on the country's competitiveness and we stated, in no uncertain terms, that EU membership alone would not solve this national problem.

Secondly, the Labour Party was presented with a document listing the FOI's recommendations for the general election (identical copy given to the other two political parties).

In its recommendations, the FOI urged the social partners to visit the issue of competitiveness and suggested that the cost of living increase should be given to employees on the minimum wage. This is the same proposal that has created the present furore. Please note: "the cost of living increase should be given to employees on the minimum wage". I am at a complete loss to understand how this could possibly have been interpreted as suggesting the reduction or removal of the minimum wage.

Thirdly, the FOI suggests that the social partners revisit the incomes policy. Allow me to explain the reason for this as best I can. A company (in this case Malta as a whole) cannot afford to increase its operating cost by Lm10,000 every year when its income is only increasing by Lm5,000. The only way this company will survive is if its income increases by Lm10,000.

Our concern is not that costs are rising but that productivity is not improving at the same rate as costs are rising. Whether we like it or not, around 55 per cent of the income (the country's value added) is the cost of wages and that is why Malta should revisit the incomes policy.

Allow me to quote our first press release: "The FOI seriously questions whether this situation is sustainable in the coming years. It appeals to the social partners to reassess the position as a matter of urgency if enterprise is to remain competitive and jobs safeguarded in the coming years".

Notwithstanding this, we are in no way suggesting that "reducing the minimum wage will solve the country's competitiveness". Of course, we are not suggesting the "erosion of the standard of living", the "reduction of the minimum wage" or the "removal of the minimum wage"!

In my first published article, after I was elected to the post of president (right in the peak of the heated debates prior to the referendum), I asked the political parties to "give the facts and allow the people to think". Again I ask that the people's intelligence be respected.

Let me quote from Dr Chircop's contribution of June 21: "In its press release, the FOI compares our wages with those of other applicant members that have lower wages than ours. It fails to mention applicant states, such as Slovenia and Cyprus, where they have a higher minimum wage than ours".

Again, allow me to reproduce the relevant part of our press release: "This (Eurostat) study reported that Slovenia and Malta had national minimum wages which, broadly speaking, were at the same level as those in Portugal and Spain respectively. The monthly minimum wages in Slovenia and in Malta were €451 and €535 respectively."

Furthermore, utilising the Eurostat report as our source, I would like to point out that the study did not take into its analysis the minimum wage of Cyprus as this country does not actually have a minimum wage.

The purpose of our press release was to create awareness about this situation for all parties concerned, including persons holding a seat in the highest institution of the state.

Unfortunately, it is clear that this country has not matured enough as our first press release was quoted in parts and out of context. As the FOI has no political agenda, but only the interest of industry and, yes, workers' jobs at heart, we decided to clarify our position with a second press release. This second press release was completely ignored.

I again appeal to all parties concerned: to the unions and the workers (who should be just as concerned as the employers that we are driving ourselves out of competition); to the social partners, to discuss the issue in a mature manner; and to the politicians, who have a duty to be honest with the people who elected them and comment on what is being said rather than on what is not being said.

Mr Borg is president of the Malta Federation of Industry.