Don’t blame Marie Louise Coleiro. We know she’s never been fit for purpose. Just blame the people who thought it a great idea to elect a party that would inevitably make her a cabinet minister.

Published: January 8, 2014 at 10:33pm
Marie Louise Coleiro Preca, an unreconstituted Mintoffian who was secretary-general of the Malta Labour Party when Dom Mintoff and KMB were leader.

Marie Louise Coleiro Preca, an unreconstituted Mintoffian who was secretary-general of the Malta Labour Party when Dom Mintoff and KMB were leader.

The Malta Chamber of Commerce and Enterprise released a statement today, tearing apart cabinet minister Marie Louise Coleiro’s suggestion that the minimum wage be increased – you know, just like that, in a vacuum, because that’s how Mintoffians think the economy works.

Come on, is the Chamber really surprised? This was inevitable. You can’t put unreconstituted Mintoffians and their political offspring in power and not expect them to put the cart before the horse on a steep incline and wonder why it’s the horse that’s being dragged downhill at speed rather the cart being pulled uphill.

It’s not as though all this wasn’t predictable. I’ve been tearing off the calendar pages waiting for Mrs Coleiro Preca, who was secretary-general of the Malta Labour Party when Dom Mintoff and KMB were that party’s great leaders, to announce her view that the government should raise the minimum wage.

In the event, she held out for 10 months. Not bad.

The Chamber of Commerce’s statement today:

No Short-Cut Solutions to Address Poverty – Malta Chamber

The Malta Chamber takes strong exception to the suggestion made by the Minister for the Family and Social Solidarity that Government is considering an increase in the minimum wage.

This reported suggestion squarely contradicts the Labour Party’s solemn pre-election declaration that the minimum wage would not be increased beyond cost of living adjustments.

The Malta Chamber firmly maintains that wages are a function of productivity and not of spending power. It certainly does not agree that an increase in the minimum wage is a viable solution to eliminate poverty. Poverty is a sensitive matter to which there are no short-cut solutions such as the one being proposed.

Increasing the minimum wage is a short-sighted approach. Besides, the effect of this measure on the intended beneficiary would be short-lived. On the contrary, any measure to address poverty needs to be carefully designed and targeted specifically at supporting, in a sustainable manner, the spending power of the cohort of people who are at the risk of poverty.

It is certainly unrealistic to assume that the minimum wage can be altered in isolation. Such an increase will inevitably bring about a domino effect further up the ranks and across the whole economy to the detriment of cost competitiveness. Whilst it is acknowledged that wages are not the sole determinant of competitiveness, the Malta Chamber insists that no further burdens are placed on Malta’s labour competitiveness, particularly at this time when certain other EU member states are instituting painful reform which include an aggressive re-engineering of their cost base. These countries have redesigned their work practices and in some cases instituted pay cuts of 20 per cent or higher.

On this count, the Malta Chamber meanwhile continues to insist on the need for the COLA formula to be revised sooner rather than later to ensure a better alignment of wage and productivity developments through a formula that incorporates a measure for productivity besides inflation.

Besides wages, the safety net that safeguards people from poverty is sustained by the productive side of the economy that contributes taxes and social security contributions. This productive side must never be weakened or this could bring about unnecessary risks to the country’s social security system.

All in all, the Malta Chamber continues to stress that wealth creation must precede wealth distribution and this sequence must not be reversed as it would expose the country to the risk of having less resources to re-distribute. The country only needs to look at the pain and anguish experienced by other countries to realize what reversing the sequence would mean to Malta.

16 Comments Comment

  1. Jozef says:

    And the first to strike will be….the bus drivers.

  2. Mandy says:

    Mrs Coleiro Preca also saw fit to supposedly pay the children’s allowance (previously payable in a lump sum, in January) “early”.

    It was PARTLY paid in December, fine, but payments are now being made quarterly, rather than yearly, meaning that anyone who budgeted receiving it in January will actually receive the full amount 8 or months LATE, in September 2014, instead of January 2014.

    • claire says:

      Those who used to receive the lump sum in January are the ones who fall under the “high income” category and get the lowest amount of allowance.

      Things could have been left as they were. Being paid quarterly at the end the parents are receiving around 115euros. With the lump sum they could make a better, budget when with 115euros you cannot plan anything.

      Plenty of hassle and bussle for nothing, waste of paper and resources. Mainly those parents who fall under this catergory do no really depend on the allowances so in this case a lump sump made more sense.

    • rjc says:

      Worse than that, pensioners like myself used to receive the cost of living increase in one go with the first January payment, together with a statement of how the other 12 payments would be made.

      No statement has been issued yet (it used to arrive mid-December) and the lump sum has now been spread over the 13 payments throughout the year. So those pensioners who had planned some small investment, such as a new domestic appliance or a winter holiday, will have to forget it.

  3. anthony says:

    Hear, hear Marie Louise Coleiro go ahead and do it.

    You have the entire country, bar some within the MCCE and the MEA, behind you.

    Let’s face it, anything less than 300 euros per week as a minimum wage is obscene. Everybody needs, at least, 500.

    But that is a little bit too much

    Ignore those lousy fat cats within the Chamber and the Malta Employers Association.

    Do what is right for Malta and for Maltese workers.

    Double the minimum wage with a flourish.

  4. Alexander Ball says:

    We could hand-stitch passports for 500 a week.

  5. H.P. Baxxter says:

    The reply by the Malta Chamber of Commerce is not much of a winner either.

    They latch on to that blasted “competitiveness”, meaning low wages, meaning Mintoffianomics and Gonzianomics and every Maltese Prime Minister’s idea of economics since we raised that confounded Maltese flag.

    Do I hear you say the PN are economic liberals?


    If they were, they’d have managed to get the message through to at least the brighter segment of the population. But they never did, because they never had that message.

    Raising the minimum wage has the same effect everywhere it’s been tried. It just brings the median wage closer to the minimum wage. That’s so obvious it’s almost a mathematical axiom.

    The result? Mass discontent. Because the people who should be earning a damn sight more than the minimum wage suddenly find themselves only a couple of hundred euros away from the unskilled labour segment. What price education and job training?

    No one, but absolutely no one, has ever managed to raise average wages by raising the minimum wage. How would that work, for Christ’s sake? Cetta The Charwoman works at MegaPowerHouseCorp Consulting, earning the minimum wage. Zack Italofilo, a certified accountant, with a law degree, works at the same firm. The PM raises the minimum wage. Cetta’s paycheck increases. Will the CEO also increase Zack’s salary? No he won’t. He will just grumble that Cetta is now costing him almost as much as Zack, and he’d be better off hiring a Japanese robot. Or an – ahem – Mexican charwoman.

    That’s socia-bloody-lism for you. It pleases no one but the minimum wage earners. The CEO, of course, gets to keep his yacht, his massive villa and his pert wife. And Zack gets squeezed in the middle and rues the day he ever got into university.

  6. Gaetano Pace says:

    Give her a kitchen, give her marzipan, give her sweet pastry and lo and behold she serves you lamb at Easter tide. Some Prime Ministers do have them.

  7. Cikku il-Panda says:

    How about us pensioners? Previously we used to receive one-third of the Cola increase in one lump sum in January (in my case it was nearly €400).

    This has now been changed and the Cola increase will be spread monthly. Cash problems? Don’t think so seeing all the consultants this government have appointed recently.

    Marie Louise Coleiro Preca is employing four or five of them.

    This is ridiculous – how these people can easily find the money for their friends but for us pensioners gejjin bil-qamel.

  8. observer says:

    Ghandek tghid, il-gidra dejjem gidra tibqa’, tpoggiha fejn tpoggiha – anke jekk fuq siggu fil-kabinett tal-ministri.

    Mhux ghaliex hemmhek qieghda hi biss, tafx. Hemm bizzejjed ohrajn li jhabbtuha maghha u ma jaghmlulhiex ghib.

  9. Galahan II says:

    Taking my cue from this.. as I have always maintained, its always the middle class that gets it in the end.

    Sad to say but I find it more and more difficult to keep a straight face when I tell my children how important it is to study and how personal effort equates to future returns. It’s simply not true, not in this society at least.

    Financial success is all about who you know and how much you can bluff your way through.

    No amount of lifelong learning or dedication or hard work will get you to the top jobs any time soon.

    And you know what is really sad? It’s that the more educated and well-trained you are for a top job, the more you are able to perceive the sheer incompetence of the ones who have been chosen in your place. Talk about eternal torment.

  10. Bubu says:

    Hear hear! At last somebody talking some sense.

  11. ciccio says:

    What I found strange is that she did not make the announcement around a table in Castille, with David Curmi to her right, the Director of Caritas on her left, and the heads of Finance Malta and the MFSA on the extremes.

    Did she say anything about the “novel concept” of the “living wage”?

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