Muscat vows to build new middle class, will not raise minimum wage

Labour leader Joseph Muscat left no doubt as to his party's plans not to raise the national minimum wage, claiming the "populist move" would burden employers with new costs and increase pressure on workers from their employers.

He was answering to one of the appeals raised by a General Workers Union section secretary who called for a national study to revisit the minimum wage.

But Muscat said raising minimum wage would only create a vicious circle that would burden businesses, pledging instead to reduce energy tariffs in a bid to "improve people's quality of life" and improve businesses' competitiveness.

"Raising the minimum wage would be an irresponsible thing for us to do," Muscat said, while pledging to reduce Enemalta's water and electricity bills, something that has earned finance minister Tonio Fenech's rebuke.

The evening's proceedings were the flipside to Labour's encounter with the business community last week that kick-started its national congress: GWU deputy secretary-general Michael Parnis was adamant to refer to the newly adopted motif of the party to "let business work" while sending a stark reminder that business should work, "but within the confines of the law".

There was a fleeting reference by Muscat to Parnis's observation, to which he replied that Labour's manifesto would not be a series of promises contradicting each other. "We're not about pleasing everybody... this manifesto is a roadmap that must take us from one place to the other, to improve people's quality of life."

In dubbing Labour 'the party for work', Muscat placed both employees and self-employed and entrepreneurs on equal footing. "We have already told businesses that we will let them work. But I don't define a worker by the money he earns, but by the fact that every single morning both employees and businesspeople must think of some way of earning a living.

"So we have to create a new middle class, one that has been falling behind for some time now," Muscat said, speaking of a generation of parents who are concerned about what opportunities will be in store for their children in the future. Here he reiterated Labour's youth guarantee pledge to ensure youths are in employment, training or studying after leaving secondary school.

The big union presence in Labour's 'Future Of Work' policy theme made a resounding appeal to curb precarious employment by government contractors and other private companies, with General Workers Union secretary-general Tony Zarb putting his union four-square behind Labour in fighting unfair and so called 'precarious' working conditions. "Union binds workers. But this government has managed to infect workers with the disease of egoism... we want work that comes with good working conditions and not precarious employment."

Stories of workers employed by different subsidiaries of the same parent company, as a ruse to avoid paying overtime, or other workers employed on a self-employed basis by contractors, formed the bulk of appeals by union reps.

The unions were less vocal on raising the national minimum wage. One of the section secretaries of the GWU, whose recent pre-electoral proposals have called for a six-monthly revision of the Cost Of Living Allowance, stopped short of calling for a raise in the minimum wage, instead appealing for a national study to revisit the national minimum.

There was no reference to Muscat's 'living wage', a proposal once floated by the Labour leader to encourage private employers and public companies to offer an improved minimum wage.

The Union Haddiema Maqghudin was also present, promoting its Active Labour Market Policy. The UHM's Josef Vella said Malta's youth cohort would decrease from 40,000 to 30,000 by 2020, in the face of a growing ageing population.

"We are going to need to take big decisions here - with less people to be dependent upon, we need to be more efficient and productive as workers. The UHM's Active Labour Market Policy's proposals have to be implemented forthwith."

Vella however also appealed for a spirit of 'national interest' that dissuaded benefit fraud and tax evasion. "We cannot talk of the national interest and then claim social benefits or medicines we are not entitled to or evade our taxes. We have to be sincere with ourselves."

Other participants lamented about the lack of jobs for particular workers. One woman said the labour market brimmed with discrimination towards older workers and the disabled. A university graduate, Liam Gauci, said only two graduates out of 15 from the University of Malta's history course had found jobs, but none related to their field of study. "The government prizes IT students because their jobs are in demand by the industry, by paying them higher stipends. But graduates like myself haven't managed to find jobs except in some secretarial posts."

The GWU's Roberto Cristiano also denounced Malta's low level of investment in human capital, putting the figure at €31 million or 0.5% of GDP in 2010. "Compared to the spend for the new parliament building, this is not a sufficient investment in human capital."

Another participant pointed out that the €2,000 tax credit for women returning to the labour market after five years was neutralised by the increased national insurance contributions and income tax payable on a joint computation, claiming a €14,000 salary would be whittled down to a mere €6,000. "We need concrete fiscal incentives that do not discourage us from seeking full-time employment."