Ensuring a guaranteed basic income

The need for a decent basic income is an all-time issue among those who have a social conscience. However, it assumes more importance in times like these, when prices of essential goods are spiralling upwards, almost out of control.

The perennial question is whether the income received by each person through employment (or a pension) should be sufficient or else whether such income derived from employment or a pension should be supplemented through a social wage, when, on its own, it is insufficient for ensuring a decent living.

Various jurisdictions are experimenting with this idea through pilot projects. As a result, they are seeking to reinforce a social net, protecting the vulnerable through ensuring that each is guaranteed a basic income irrespective of his or her circumstances in life. Each person has the right to have the basic means to ensure a decent life.

The basic facts should, by now, be clear to all.

The three Caritas studies published to date have revealed a widening gap between the official minimum wage and three different categories of vulnerable households.

In the case of a household consisting of 2 adults and 2 children this gap is approximately 40 per cent, at 2020 prices. In fairness it has to be clarified that this gap does not include the receipt of social solidarity income, amongst which children allowances and the various forms of supplementary social income which may be applicable to specific circumstances. When this is taken into account, I believe that in most cases the gap is substantially reduced.

The current price rise of essential goods, average close to a 25 per cent rise in a number of cases, (although a number of items have had much steeper price increases) brings to the fore another worry. Cost of living adjustments to wages and pensions are effective at the beginning of the year, and reflect the cost of living of the previous twelve months.

The last statutory cost of living increase has been of €1.75 per week, less than the cost of a cappuccino. During the past years such increases have varied from a €5.82 per week increase in 2010 to a €0.58 per week increase in 2015.

At times this increase is deemed to be too low as was the 2015 COLA adjustment.

It is essential that the basket of goods and services utilised to measure the actual cost of living is updated on a regular basis in order to ensure that the results obtained are realistic and reflect actual needs.

Finance Minister Clyde Caruana has over the past weeks emphasised that he is considering proposals to introduce a new form of COLA for low-income people. So far, however, nothing has materialised. The Minister has hinted that he is discussing various proposals behind closed doors. Would it not be a much better idea if the discussion is externalised? Everyone of us is interested in the proposals being drafted and discussed.

One possibility which should be considered is not to keep accumulating the cost-of-living dues and carry out adjustments to the minimum wage (and pensions) on the following January. It should be possible to carry out cost of living adjustments to the minimum wage as well as to pensions twice a year, towards the end of June and towards the end of December.  In times of steep price increases, as the present, such an initiative could make a substantial difference to the vulnerable and those on low income.

Ensuring that each has a basic decent income is a basic requirement in the development of the welfare state.

published Malta Independent on Sunday : 30 January 2022

A minimum income for a decent living

Within the European Union structures a debate has commenced on adequate minimum wages throughout the Union. Commission President Ursula von der Leyen had stated on her appointment that she would be proposing a legal instrument to ensure that every worker in the Union has a fair minimum wage.

The consultation process within the EU was launched over one year ago. As a result, a proposal for an EU Directive on adequate minimum wages has been finalised together with a number of supporting documents, including a 240 page long extensive impact assessment

In an explanatory memorandum published by the EU together with the text of the proposed Directive it is emphasised that “in the majority of EU Member States with national statutory minimum wages, minimum wages are too low vis-à-vis other wages or to provide a decent living even if they have increased in recent years.” In its impact assessment, the EU Commission calculated that an increase of national minimum wages according to the double decency threshold (60% of the median and 50% of the average wage) would improve the wages of around 25 million workers in Europe.

Malta is one such state with a low minimum wage which does not suffice, in particular, for vulnerable categories. A Caritas study published last Friday once more identifies short-comings of the minimum wage in Malta, when this is the only source of income for a number of vulnerable households.

The Caritas study entitled “A Minimum Essential Budget for a Decent Living 2020” follows previous studies published by Caritas in 2012 and 2016 as a result of which detailed research illustrates how the basic needs of vulnerable households, cannot be addressed if these households are dependent on one minimum wage as their only source of income.

The latest Caritas study concludes that a household comprising two adults and two children require €13947 annually as a minimum for a decent living, while if the household consists of a lone parent and two children this requirement drops to €11038. This is well below the 2021 statutory minimum wage which is currently €181.08 per week even if one also takes into consideration the June and December statutory bonus. On the other hand, the requirements of a household consisting of an elderly couple adds up to €8157 annually, concludes the Caritas study. This last figure, which is manageable, is however qualified in the Caritas report in that it may vary substantially due to the myriad of costs specific to the lifestyle and health status of the elderly.

The above excludes cases where the minimum wage earner needs to fork out expenses for a privately rented dwelling, in which case subsistence is practically impossible. The Caritas 2020 report emphasises that impact of the rent due “can dramatically affect the financial circumstances and quality of life of low-income households”.

The agreement signed by government with the social partners in 2017 as a result of which after one year in receipt of a minimum wage there are mandatory increases of €3 per week and an additional €3 per week after the second year, was a step forward and without doubt lessens the burdens of minimum wage earners. But this is certainly not enough. An overhaul of the method of calculation of the minimum wage is essential as this has to be reflective of real and actual needs. It has to be capable of sustaining a dignified living.

The recent news that the Maltese government is among the EU Member states which are objecting to EU legislation that would set up a framework regulating the minimum wage is worrying as the Maltese Government has been reluctant to take steps ensuring that the minimum wage is revised periodically to reflect actual needs. ADPD has long been advocating for this revision. However, the Labour government has repeatedly indicated that it was more interested in helping the wealthy get even wealthier. It was more interested in defending the crooks in its midst.

Our society needs to guarantee a basic income for all which is sufficient for a decent living. A number of countries are carrying out trials to identify the best way forward in this respect. The Universal Basic Income or UBI is being tested in a number of countries through pilot projects.

There is much to learn not just from these pilot projects. Malta’s Covid-19 wage supplement, for example, was a worthy initiative which merits further consideration. If properly applied it can form the basis of a long-term initiative to guarantee a minimum income for all. Obviously, it is easier said than done but we need to start some long-term planning which addresses the need to guarantee a minimum income for all thereby ensuring that all have access to sufficient resources to live a dignified life. This is the next step for the welfare state.

published in The Malta Independent on Sunday: 7 February 2021

L-impatti tal-Coronavirus: inħarsu l-impiegi kollha

Il-Gvern ħabbar pakkett finanzjarju ta’ €1.8 biljun biex jilqa’ għall-impatti tal-Coronavirus.

Kif ser ikun effettwat il-ħaddiem b’kuntratt bla rabta ta’ numru ta’ siegħat li jaħdem (zero-hours contract), jew dawk f’impieg temporanju, dawk tas-sengħa li jaħdmu għal rashom, inkella n-negozjanti ż-żgħar? Il-pakkett finanzjarju imħabbar, ftit li xejn jaħseb fihom. Allura, minkejja l-merti tiegħu, il-pakkett finanzjarju tal-Gvern mhux tajjeb biżżejjed.

Il-ħaddiem iż-żgħir l-ewwel li jlaqqatha f’kull kriżi. Hu l-impatt fuqhom li għandu jservi ta’ kejl biex inkunu nistgħu niffurmaw opinjoni dwar kemm dan il-pakkett finanzjarju, kif ukoll dawk li għad jistgħu jiġu, huma effettivi.

Ilkoll nieħdu pjaċir b’inizjattivi biex jassiguraw li l-ekonomija u min iħaddimha jiġi fuq saqajh, mhux biss meta tiġi fi tmiemha din il-kriżi iżda ukoll fil-mixja li jeħtieġilna ngħaddu minnha biex nirkupraw. Imma kemm hu sew li noħorġu r-riżorsi tal-pajjiż biex tkun tista’ tirkupra ekonomija li mhiex kapaċi tirrispetta l-iktar dgħajfa fostna?

Il-proposti tal-Gvern biex jilqa’ għall-impatti tal-Coronavirus ma jorbtux lill-operaturi ekonomiċi li jagħmlu użu mill-proposti differenti fil-pakkett milli jħarsu l-impiegi. Is-sensji diġa bdew. Il-ħaddiem iż-żgħir l-ewwel li jlaqqatha. Warajh ilaqqtuha oħrajn.

Il-pakkett tal-Gvern biex jilqa’ għall-effetti tal-Coronavirus jeħtieġ miżuri addizzjonali.

L-għajnuna li ser tingħata għandha tmur lil dawk li sofrew tnaqqis sostanzjali fid-dħul tagħhom meta kkomparat mas-sena li għaddiet. Il-pakkett tal-Gvern huwa iffukat biex jiffaċilita l-likwidità kif ukoll biex jgħin ħalli jkun iggarantit self bankarju. Filwaqt li dawn huma miżuri importanti, f’din il-kriżi hu essenzjali li l-għajnuna tkun iffukata fuq il-pagi tal-ħaddiema. L-għajnuna diretta lill-operaturi ekonomiċi għandha tkun marbuta mal-obbligu tagħhom li jipproteġu l-impiegi. Jekk ma jkunx imħares ix-xogħol m’għandhiex tingħata għajnuna.

Aħna l-Ħodor f’Alternattiva Demokratika mħassba dwar il-ħaddiem iż-żgħir. Hu l-ewwel ma jlaqqatha f’din il-kriżi: huma l-ewwel vittmi tal-Coronavirus. L-għajnuna li dawn jeħtieġu hi fil-forma ta’ dħul minimu garantit tul ix-xhur li ġejjin, kemm iddum il-kriżi. Huma l-iktar vulnerabbli u ħadd mhu jitkellem dwarhom.

Il-kirjiet ta’ residenzi għandhom jiġġeddu awtomatikament sakemm tintemm il-kriżi. Għandu jkun hemm provediment għall-ħarsien minn xoljiment ta’ kuntratti ta’ kera tul il-kriżi. Hemm ħtieġa ukoll li tul il-kriżi l-Gvern jimpenja ruħu iktar biex jassigura illi l-iktar vulnerabbli jkollhom saqaf fuq rashom. Dan għandu jsir dejjem imma b’mod specjali tul il-kriżi.

Aħna l-Ħodor tal-fehma li l-impatt ta’ din il-kriżi fuq l-impiegi turi difetti strutturali fil-qasam soċjali fil-pajjiż. Malta mhux l-unika pajjiż li qed jiffaċċja din il-problema. Huwa importanti li bħal numru ta’ pajjiżi oħra, fosthom l-Isveżja, in-Norveġja, il-belt ta’ Utrecht fl-Olanda, anke f’Malta nidħlu fil-fond u neżaminaw kif jistgħu jaħdmu skemi ta’ dħul minimu garantit li jirreferu għalihom bħala Universal Basic Income u Guaranteed Minimum Income schemes. Ikun għaqli li neżaminaw sewwa dawn it-tip ta’ skemi, għax dawn jistgħu joffrulna tarka tajba meta nkunu iffaċċjati b’dawn il-kriżijiet.

Huwa l-waqt li kulħadd iżomm rasu f’lokha. Il-paroli vojt fil-Parlament tal-Ministru Silvio Schembri iktar kmieni din il-ġimgħa kien barra minn postu u għamel il-ħsara, minkejja li wara skuża ruħu. Qatt mhi idea tajba li thedded bit-tkeċċija lil dawk li b’ħidmiethom taw kontribut biex il-pajjiż kiber, anke bix-xogħol tagħhom. Meta din il-kriżi tgħaddi jerġgħu jkunu huma, inkella oħrajn bħalhom, li nsibu biex jagħmlu dak ix-xogħol li għalih la hemm Maltin, inkella l-Maltin ma jridux jagħmluh għal raġunijiet diversi. Anke issa stess l-Onor Ministru jista’ jagħti titwila lejn is-servizz tas-saħħa u jara jekk hux possibli li jopera mingħajrhom, flimkien dejjem mal-kollegi Maltin. Flimkien qed jagħtu servizz impekkabbli lil pajjiż.

Ilkoll niftakru kif madwar sena ilu, l-Prim Ministru Joseph Muscat kien assoċja l-involviment tal-barranin fid-dinja tax-xogħol f’Malta mal-ġbir taż-żibel. Anke hu, dakinnhar kien għamel apoloġija. Imma sfortunatament il-preġudizzji tiegħu ħallihom warajh fil-Kabinett ta’ Robert Abela.

Ippubblikat fuq Illum : Il-Ħadd 22 ta’ Marzu 2020

Coronavirus fallout: the need to protect all jobs

Government has announced its financial package which it described as being a €1.8 billion stimulus package. What is in it for a zero-hours contract worker, the casual worker, the freelance tradesman, the small-scale businessman? Nothing at all. Hence notwithstanding its merits, Government’s package is not a suitable package.

Zero-hour contract workers, the casual worker, the freelance tradesmen and the small-scale businessmen are the first casualties in each and every crisis. It is in the assessment of their plight that we can arrive at a conclusion on the suitability or otherwise of this and any other Covid19 recovery package.

We all applaud initiatives to ensure that the economy and its operators can stand back on their feet not just when this crisis is over, but also along the long road to recovery. But, what purpose is there in pumping the nation’s resources to recover an economy which is not capable of respecting the most vulnerable ones amongst us?

Government’s Covid19 package proposals do not seek to bind economic operators making use of the different opportunities in the stimulus package to protect their labour force. Redundancies have already started. Casual workers and zero-hour contract workers are the first casualties. Others will soon follow.

Additional measures are called for in Government’s Covid19 package.

Assistance given to economic operators should only go to those which have suffered a drastic reduction in their income when compared to last year. Government’s package is predominantly focused on assistance in providing guarantees for bank loans as well as in facilitating and ensuring liquidity. While these are important measures, in this crisis, aid focused directed towards wages of workers is essential. Any direct assistance to economic operators should be linked to their duty of protecting jobs. No job protection should equate to no aid.

Greens are concerned about several freelance tradesman, small scale businessmen as well as casual labour and workers on zero-hours contracts. They are bearing the brunt of the very sharp decrease in work opportunities: they are the first victims of Covid19. Aid to these categories should be a guaranteed income scheme for the coming months, throughout the duration of the crisis. These are the categories which are the most vulnerable and which nobody is talking about.

The lease contracts for tenants should be automatically renewed until the crisis is overcome. There should be introduced a special protection from eviction throughout the Coronavirus crisis. There is also a need for a greater commitment by the government to offer adequate and decent housing to the most vulnerable in particular during this time of crisis.

Greens consider that the crisis’ impacts on employment is showing the structural defects the country has in the social field. Malta is not the only country to have to face this problem. It is important that like various other countries, notably Sweden, Norway, and the city of Utrecht in the Netherlands, guaranteed income schemes referred to as Universal Basic Income and Guaranteed Minimum Income are discussed in depth in Malta too. It would be wise to start considering such schemes for the future as they could offer a long-term solution.

It is time for level-headedness. Minister Silvio Schembri’s outburst in Parliament earlier this week was uncalled for and damaging, even though he eventually apologised. It is never the time to threaten with expulsion those who have contributed so much to our country and economy. When the crisis is eventually over it will be those whom the Hon Minister threatened with expulsion who will once more plug the gap. Even now, the Hon Minister should take a look at the health service and consider whether it would be possible to operate without the participation of non-Maltese medics and paramedical staff who are performing miracles through their professional service hand-in-hand with their Maltese colleagues.

We do remember that around 12 months ago then Prime Minister Joseph Muscat equated non-Maltese participation in the local labour force with refuse collectors. Though he too eventually apologised, his prejudice unfortunately lingers on in those he left behind in Robert Abela’s Cabinet.

published in The Malta Independent on Sunday : 22 March 2020