Minimum wage deal open to abuse by employers, activists warn

A deal to increase the minimum wage could incentivise employers to sack their staff after one year of employment, a group of activists campaigning for a decent minimum wage have warned.

The deal, which was formally signed by government, opposition and social partners on Friday, will see the minimum wage go up by €8 a week by 2019. Minimum wage earners will be automatically entitled to a €3 weekly increase upon completion of the first year of employment with the same employer and a further €3 weekly upon completion of the second year.

Caritas director Leonid McKay warned that this could backlash, leading employers to sack their staff after a year of employment and that workers on definite contracts and part-time workers are particularly at risk.

He dismissed concerns that a sharp rise in the minimum wage could lead to high inflation, arguing that inflation – particularly on food and property – have increased dramatically in recent years, despite salaries remaining stagnant.

He also sounded a word of caution over recently published national statistics which indicated that the number of people living in material deprivation is down by half when compared with 2013 figures.

“Those surveys don’t take into account homeless people, people who live in institutions and people who receive services from shelters,” he warned. “They don’t show the full picture.”

By 2019, therefore people on the minimum wage will be earning an extra €416 - in addition to the normal cost of living adjustment (COLA) assuming they remain in the same job.

It is a far cry from what the Campaign for a Decent Minimum Wage was calling for: an increase of 11% spread over three years. The campaign argued that the increase should be based on the principle of social justice, not on the principle of eradicating poverty.

Charles Miceli from the Alleanza Kontra l-Faqar and Erica Schembri from Moviment Graffitti said that their proposed rise was already a very conservative demand and that the final deal will not even be half of their proposal.

“It is nowhere near enough to ensure decent wages to workers,” Schembri said. “Everyone keeps saying that the economy is doing well, so if we don’t properly increase the minimum wage now when will we?”