[ANALYSIS] Busuttil’s cunning plan: How to outflank Muscat from the left

“I believe that this NGO proposal for an increase in the minimum wage is reasonable and ought to be supported,” Simon Busuttil tweeted, just two hours after Caritas and various anti-poverty and left-wing civil society organisations proposed a 10% increase in the minimum wage.

By the power of his mobile-tapping thumbnail, Busuttil is determined to assert his personal authority in his party, breaking up with the party’s minimum wage taboo but awkwardly, failing to make this radical commitment in his own reply to the budget speech last week – when he went as far as proposing a new mechanism to establish “the level of income required” to ensure nobody lives in poverty and to top up the income of all those falling under this established level.

Indeed, there was no increase in the minimum wage proposed in a pre-budget PN document presented to the Malta Council for Economic and Social Development on 28 September. And when recently quizzed over the Caritas report on whether he agrees with a revision in the minimum wage, he replied that “instead of simply increasing the minimum wage from X to Y, we believe that people on the minimum wage should be trained so that they will be able to find a higher-paying job.”

Following civil society

One can safely say that an increase in the minimum wage was never projected as part of an all-encompassing, reformist programme. But Busuttil preferred to follow civil society rather than take the initiative himself at an earlier stage. One has to recognise that Busuttil, who privately once described himself as politically centre-left before joining the political fray, has been paving the ground by adopting a more left-wing tone since the September 21 celebrations. On this issue, Busuttil is following his political instincts.

His ‘minimum wage’ tweet was not preceded by any grand, ideological discussion in the party. In a single social media chirrup, the party leader revoked his own party’s past reservations on a minimum wage increase, which were based on the belief that this would trigger a domino effect for increases on other wages.

I believe that this NGO proposal for an increase in the minimum wage is reasonable and ought to be supported. https://t.co/N1G9Y1s6Kf

— Simon Busuttil (@SimonBusuttil) October 29, 2016

In government, the most radical measure taken by the former Gonzi administration was giving free courses to minimum wage earners, for which only eight people applied.

Moreover the party’s present economic policy, An Economy for the People, authored by economy spokesperson Claudio Grech, which was approved last year, proposes an “entrenched” mechanism that links any wage increases with productivity increases. Indeed, the document starkly ruled out “zero sum pecuniary wage debacles” to instead favour “productivity enhancement”.

And the only concrete measure proposed by the PN to entrench redistribution of wealth consisted of a Private Public Partnership scheme to support low-income earners by seeking to increase their wages through productivity enhancement. The document even proposed “partnership with the President’s trust” in schemes to support low-income earners, and linked to productivity enhancement. There was nothing in this document to suggest that an increase in the minimum wage was on the party’s agenda. 

In this sense, the policy shift on the minimum wage could have been more elegant and less sudden but it shows a growing realization on the part of Busuttil that parties are only successful if they take risks and are able to change entrenched positions.  

Moreover Busuttil is imposing his own way without even consulting the party and parliamentary group. For while on issues like civil unions and the morning-after pill, Busuttil was paralyzed by different positions in his group, on the minimum wage he imposed his line through a tweet which conditions any further debate in his party and parliamentary group.

One may suspect that Busuttil has now earned himself a blank cheque to do whatever he deems necessary in his bid to make his party electable. The cost of this strategy is that it perpetuates a presidential system where loyalties are not towards the party but to the party leader himself.

Pre-empting Muscat’s final budget?

After having excluded an increase in the minimum wage for the past four years, opting for added social benefits to top up the income of low earners, Muscat has now hinted that he personally agrees with a revision of the minimum wage but would first seek consensus among the social partners.

Ironically, the PN’s final policy when in government was to usher in three years of tax cuts for high-income earners, rather than raise wages – a commitment upheld by Labour after it was elected. Before 2013 it was Muscat who had pre-empted the PN, by supporting the tax cuts for high-income earners before these were even announced in the budget.

Now it is Busuttil’s turn to pre-empt Muscat. This may suggest that while Muscat was aware that he could only win the 2013 election by shifting his party to the centre-right, Busuttil is now aware that he can only win by outflanking Muscat from the left. Ironically in his bid to entice businesses before 2013, Muscat tried to ditch the minimum wage issue. After toying in an interview in 2009 with the idea of a “living wage” which would only have affected businesses bidding for government tenders, Muscat publicly committed his party not to raise the minimum wage (beyond COLA increases) during a convention in 2012.

Anti-poverty campaigners Leonid MacKay (Caritas), Charles Miceli, and Graffitti activist Erica Schembri announce the campaign for an increase in the national minimum wage. As Malta experiences bullish economic growth, the campaign is calling for a graduated, annual 3.5% increase in the national minimum wage over the next three years

Busuttil and big business

One may argue that circumstances have changed from 2012 and the economy is growing at an unprecedented rate, thus begging the question: if not now, when? But Busuttil’s decision is courageous in the sense that he has definitely broken with the tradition that the PN represents the interests of the business lobby, which is entrenched in its opposition to any suggestion of raising the minimum wage. It may well be that Busuttil’s decision may lose the party some support among the business community, especially among small businesses who employ a few workers on minimum wage levels.

This may be why in the next weeks the PN is expected to launch a policy on the self-employed sector and aggressively reach out to small shop owners and small businesses in a bid to forge a new social alliance. It also suggests that perversely the cedoli scheme has earned the PN a sufficient war chest that makes it less dependent on further funding from big donors.

Surely the scheme itself, which guarantees anonymity for party lenders, raises questions on obligations towards this restricted circle of people, but it may well have given the party greater financial peace of mind. For one cannot but note the PN’s more belligerent tone with regard to issues like high-rise developments – an issue which puts his party at odds with big developers – in the past weeks.

Yet Busuttil is also being strategic. While courting environmentalists on high-rise and land reclamation, which pits him against big business, he is ambiguous on the development of an airstrip in Gozo, a district that may well determine his party’s fortunes and where the promise of more development lures voters.

While Busuttil may be criticised for opportunism he has surely gone a long way in asserting his authority in the party. Gone are the days when Busuttil abstained in parliament on civil unions, despite being himself in favour. Moreover Busuttil has shown no qualms in attracting and courting people, and welcoming people (Salvu Mallia and Caroline Muscat are cases in point) who publicly profess left-wing and secularist views. Busuttil now has to match their expectations in terms of policy to set in motion a snowball effect which may attract others to follow their example. 

Busuttil’s electoral calculus

Truly for the first time Busuttil seems to know what he is doing. With surveys showing the party winning back half the switchers it lost in 2013, the party’s only chance of winning in 2018 is to win a segment of traditional Labour voters alienated by Muscat’s pro-business mantra.

Moreover Busuttil has also managed to pre-empt Muscat from taking ownership of the long due increase in the minimum wage by inserting the measure in a pre-electoral budget next year. In this way Busuttil is no longer showing his cards by seeking consensus within his own party before embarking on new policy ground.

In this sense Busuttil is behaving more like Muscat pre-2013. For it was Muscat himself who ditched his own declared personal opposition to gay marriages and adoption to accept the whole package proposed by the gay lobby before the election. Was that opportunism? It may well have been, but it has brought an epochal change in the country with regard to civil liberties.

Is Busuttil in his own way paving the way for a new realignment of the party with an increasingly restless civil society? Busuttil knows that time is short and he has to tweet his way fast.

Minimum wage across the EU

The minimum wage across the EU

In January 2016, 22 out of the 28 EU member states (Denmark, Italy, Cyprus, Austria, Finland and Sweden were the exceptions) had a national minimum wage.

The countries are divided into three groups based on the level of their minimum wages. The first group includes countries whose minimum wages were lower than €500 a month; the second group comprises five EU Member States (Portugal, Greece, Malta, Spain and Slovenia) and Turkey, each with an intermediate level of minimum wages, defined for the purpose of this article as ranging from €500 to less than €1,000 a month; note that in all five of these Member States the minimum wage was in practice below €800 per month.

The third and final group comprises seven EU Member States (France, Germany, Belgium, the Netherlands, the United Kingdom, Ireland and Luxembourg) where the national minimum wage was €1 000 or more per month; this group also includes the United States.