A new economic model: Is it another way of saying ‘go back to your country’ politely?

The Nationalist opposition has partly blamed the recent power cuts on the government’s economic strategy that banked on rapid population growth.

The PN speaks on the need to move away from the current economic model based on cheap labour provided by foreign workers and turn to something different.

It is worth noting that this criticism often refers to the increase of foreign workers but not to record tourism figures which also push up energy demand in the hot summer days. 

And while it is sensible to lambast government for its lack of planning and for not investing enough in the distribution system, it remains unclear what economic model the Opposition is advocating.

The PN is not inventing the wheel when promoting the misleading analogy between a country’s economy and a ‘full up’ bus which has a restricted number of seats. 

Three years ago, it was Robert Abela who challenged Bernard Grech to agree with him that Malta is “full up” with regards to irregular migrants.

And while the challenges posed by irregular migration are entirely different from those posed by the influx of legal foreign workers, prejudice against ‘brown’ Asians is fast replacing that against ‘black’ Africans. 

Now with European elections on the horizon it is the Opposition which is hinting that the country is full up with regards to ‘third country nationals’ doing the menial jobs which many Maltese are no longer doing.

Polls also suggest that concern on foreign workers has now surpassed that on irregular migration. In this context the Opposition has come up with an ambiguous formula which can be interpreted differently by different segments of the electorate.

On one hand the PN’s critique of the economic model can be interpreted as a sensible call for greater enforcement of labour laws and better conditions for foreign workers.

On the other hand, it can be interpreted as a polite way of telling them to go back to their country – or ‘we pity you poor migrants sleeping in apartments with 40 bunk beds, but we are better off without you’.

But can the country really do without third country nationals?  Here are three reasons why an exodus of foreigners is neither desirable nor practical.

1. Someone must do menial and unskilled jobs and Malta’s low unemployment figures suggests that migrants are not taking anybody’s job.  

Data presented in parliament, shows that despite a growth in Maltese workers from 155,000 in 2012, to 174,000 in 2022, the actual number of workers paid less than €20,000 decreased by a sheer one-third – 29.1%. In 2012 there were 108,000 Maltese nationals earning less than €20,000 a year; a decade later they fell to 77,000. In all other salary bands, there was an increase in the Maltese workforce. The same data suggests that many of these jobs were directly filled by lower-paid migrants from outside the European Union.

Moreover, Malta has one of the lowest unemployment rates in Europe despite the increase in both the numbers of foreign workers and the number of female workers. Just one year after joining the European Union in 2004, Malta had a female participation rate of just 34.5%. The rate grew to 47% in 2013 and jumped to 67% in 2020 surpassing the EU average.

This suggests that foreign workers are not taking anybody’s job and are simply taking the necessary jobs which Maltese workers don’t want to do in a context where few are being left jobless.

Surely there is no justification for people being exploited by recruitment agencies and Labour has largely failed to clamp down on abusive practices in the gig economy.

It is also worth asking why Maltese students are not taking temporary jobs in sectors like retail and catering - low wages may well be the reason. In this sense the problem is not foreigners but the wages being offered.

In 2022 among all EU countries Malta registered the third lowest increase in its statutory minimum wage with the increase ranging from over 20% in Germany and Latvia, to 5.4% in Malta.  One cannot help suspecting that the government’s reluctance on substantially increasing the minimum wage is grounded in the perception that most of those on low wages are foreigners whose cheap labour is enriching Maltese businesses.

Yet, when criticising the economic model, it remains unclear whether the Opposition is advocating for better conditions for workers doing menial jobs irrespective of their nationality or whether it wants to kick them out in what could be a major economic auto-goal which ignores the reality that somebody must do low skilled jobs.

Can we really imagine living in a country where nobody delivers and serves meals, cleans offices, drives buses, collects rubbish and works in construction sites? Or what hospital and elderly services would look like without third country nationals? Surely, we should value these workers more and stop treating them like squeezed lemons… but we surely cannot do without them, even if we shift towards new economic sectors offering better prospects for both Maltese and foreign workers.

2. The Opposition has not suddenly converted to de-growth economics. That is why it rarely complains that too many tourists are visiting the country despite their impact on the infrastructure. Yet apart from vaguely hinting at new economic sectors, it has not shown how it intends retaining present levels of growth while decreasing foreign workers who contribute to it.

There is an argument to be made that our economy is too reliant on growth in sectors like construction and tourism.  One may even make the argument that economic growth is not a god-like entity to which we should sacrifice everything including our quality of life.

If by a new economic model, the Opposition understands a transition towards a more sustainable economy, it needs to articulate this vision as a long-term destination not just with regards to foreign workers but also to the restructuring of our tourism and construction industries. For example, it is legitimate to ask whether the country should keep building new hotels in view of the inevitable impact of tourism on the infrastructure. It is a well-known fact that tourists tend to be more wasteful than people who live here and it is no surprise that most power cuts coincided with peak tourist arrivals. For example, official statistics show that in 2018, the annual waste generation rate for the permanent population amounted to 430kg per person, while among tourists the amount shot up to 774kg per tourist. And while the resident population generated an average of 205kg per capita of food waste, the seasonal population generated a staggering 368kg.

3. Labour should be harshly criticised for ignoring the plight of exploited foreign workers.  But the problem stems from considering their presence as a temporary one. Giving them rights also means accepting that some will be staying here for the long haul.  But this is the nightmare of the anti- foreigner brigade.

In 2023 one cannot speak about a Maltese “working class” without referring to the over 50,000 workers imported from outside the European Union, whose numbers have grown tenfold in the past decade. Their exploitation, especially in cases where these workers are recruited by agencies to whom they remain indebted, remains a stain on Labour’s socialist credentials. For how can one reconcile the party’s identification with the working class with its failure to address the exploitation of what is now a significant segment of the working class?

But giving foreign workers rights, including for example the right to vote in local elections would encourage more of them to dig their roots in the country and become Maltese. And while this may probably be the worst nightmare for xenophobes and racists, it may well be the most effective way to integrate foreign workers in the social fabric, even in daily matters like waste collection.

What we should be asking is whether we prefer having more foreigners who feel a sense of belonging towards Malta or more squeezed lemons living in ghettoes whose resentment may grow and become a problem.