Low Wage Commission kicks off work on minimum wage revision

The Low Wage Commission has started working on revisions to the minimum wage, as promised in a 2017 agreement reforming minimum wage calculations.

The Low Wage Commission, through the Malta Council for Economic and Social Development, has engaged E-cubed Consultants to gather data and present recommendations on the revision of the minimum wage in Malta.

The commission was established following a 2017 agreement between the government and social partners to increase the minimum wage. It is chaired by David Xuereb, chairperson of the MCESD.

Xuereb told MaltaToday that the commission is working steadfast to consider all data and information that will inform the recommendations on Malta’s minimum wage.

“These recommendations will be offered to government after all studies and considerations by all the parties are made and a converged position is reached.”

There are various union, employer and government representatives on the commission. The General Workers Union, Union Ħaddiema Maqgħudin, Confederation of Malta Trade Unions, and Forum Unions Maltin are representing workers’ interests, while employers are being represented by the Chamber of Commerce, Chamber of SMEs, the Malta Employers Association and the Malta Hotels and Restaurants Association.

The government is being represented on the commission by Godfrey Pirotta, Mark Borg, and Philip von Brockdorff.

As per the agreement, people earning a minimum wage are entitled to a mandatory €3 increase per week upon completion of the first year of employment with the same employer, and a further €3 weekly upon completion of the second year.

The agreement also stipulated that in 2018 and 2019, persons on the minimum wage will earn an extra €1 per week in addition to COLA.

A study by the European Foundation for the Improvement of Living and Working Conditions (Eurofound) found that Malta registered the third lowest increase in its statutory minimum wage throughout 2022.

While minimum wage in Malta increased by only 27% between 2010 and 2022, from €647 to €835, in Slovenia the minimum wage has increased by a staggering 102% from € 647 to €1,304. In the same period the minimum wage in Lithuania increased by 262% from just €232 to €840.

The only countries where nominal rates have not increased between January 2022 and January 2023 was Spain, where negotiations are still ongoing, and Cyprus, where a statutory minimum wage has just been introduced.

A separate study from 2022, also by Eurofound, said that Malta experienced a significant decline in the real minimum wage rate due to the rising cost of living.

While the minimum wage in Malta increased by 1% between January 2021 and January 2022, in real terms minimum-wage earners experienced a 3% drop in income when inflation is considered.