‘Spiralling’ property and rental prices affecting workers’ ability to get by – employers

The Malta Employers’ Association has taken aim at “spiralling property and rental prices” as a major issue impacting the adequacy of wages, arguing that the ability of employees to avoid ‘in-work poverty’ depends on external factors outside their employers’ control.

Property and rental prices have roughly doubled over the last decade , while real wages have remained largely stagnant. The result is that more people are finding it difficult to get by even while holding down a job – a reality that the European Union’s new Minimum Wage Directive seeks to address.

Speaking at the MEA’s annual general meeting, association president Joanne Bondin said that the main principle of the directive – that of setting a framework in EU countries to improve the adequacy of minimum wages, and to increase the access of workers to minimum wage protection – is something which the MEA has always supported and promoted.

“Thanks to our social dialogue structures, Malta already has in place a strong framework that establishes the adequacy of the minimum wage. We have had the minimum wage for decades, supported by an automatic inflation indexation system through the annual COLA adjustment,” she said.

Ms Bondin also pointed out that the MEA was “instrumental” in the setting up of the Low Wage Commission in 2017, leading to a revision of the minimum wage in late 2023 (a previous revision led to provisions for wage increases after a period on the job, but did not change the base minimum wage).

In her address to the members gathered for the AGM, the MEA president restated the association’s opposition to mandatory union membership, stressed the need for economic transformation to move people into higher value-added employment, and argued that “part of the dependency on foreign workers is attributable to a bloated public sector and a slow uptake of automation and digitisation technologies.”

On the subject of workers from outside the EU, known as Third Country Nationals (TCNs), Ms Bondin warned that those with expired employment contracts “will inevitably” end up working in the black economy if their renewal is not processed within 10 working days.

She also pointed to problems with TCNs and the testing to obtain driving licenses: “Although on their arrival, they can drive commercial vehicles for a year, during which they have to attend a course and sit for a test, their license risks being withdrawn even if they do not manage to sit for the test due to a backlog of applicants.”

Finally, although the situation at Identità was improving steadily for a time, Ms Bondin warned that “it appears that old problems are re-emerging.”