Wage increases in Malta are not being reflected in an increase in production, a survey commissioned by the Malta Employers’ Association due to be released on Monday will show.

Three-quarters of respondents claim the increase in their wage bills is not being matched with productivity gains, greatly undermining the country’s competitiveness.

The so-called Wage Inflation Survey was derived through a questionnaire completed by almost 250 employers between July 7 and 24. The full details of the survey are expected to be released during a news conference on Monday.

Half of all respondents said they have not seen productivity increase in line with wage increases in the past two years. Almost a quarter said that it had increased, albeit to a smaller proportion than the increase in wages. Nineteen per cent said productivity had increased in line with average wages and just seven per cent said it had increased more than salary increases.

More than half of survey respondents said they have had to face a wage inflation which is greater than the inflation registered in the country. More than a quarter of all workers have seen their wages increased by at least nine per cent, the survey says. Just four per cent of employees have not seen any increases beyond statutory increases.

Respondents cited a number of reasons for wage inflation, primarily labour market shortages, increase in living costs and cost of living allowances.

MEA said it considered the need for the study as urgent, considering a market dictated by scarcity of resources and a strong reliance on imported labour to meet demand.

Association director general Joe Farrugia warned last April that the wage price spiral will ultimately affect consumers negatively – especially low-wage earners – and could also generate redundancies if it becomes unsustainable.