In a country where academics are largely silent or alienated from a sterile political debate dominated by partisan mudslinging, a memorandum issued by the University’s Centre for Labour Studies stands out as a wake up call for political parties to confront the issues that really matter.
Indirectly, the memorandum sends a message to the dormant intelligentsia: to stand up and be counted in the political arena.
The memo, co-authored by four distinguished sociologists and labour studies experts – namely Godfrey Baldacchino, Edward Zammit, Manwel Debono and Saviour Rizzo – dares to question widely held assumptions on the benefits of privatisation and labour market deregulation.
At the same time it offers a number of business-friendly proposals, including a reduction in the National Insurance contributions paid by employers consonant with the CLS’s goal of “win-win” solutions for both capital and labour.
In brief, the document calls on the government to reduce State-induced costs for employers to help them compete without resorting to low wages.
The report does not shy away from socially divisive issues like immigration. Unlike the Malta Labour Party, which is largely silent on this issue, the left wing academics address popular concerns without resorting to xenophobic clichés.
They do not refrain from criticising both main political parties for not “declaring clear ideological principles on this issue.”
Unlike the scaremongers of the Maltese far right, the “four wise men” observe that immigrants might be doing work shunned by Maltese workers and thus filling a gap in the supply side of labour.
At the same time the academics also see the other side of the coin: namely that immigrants could be sources of cheap labour which some employers are exploiting to the full.
“This is detrimental to Maltese workers as this pool of labour may undermine core working conditions,” the report warns.
The report does not minimise the risks posed by the new social phenomenon, warning that the concentration of immigrants in lowly paid and menial jobs could eventually create “an underclass of deprived persons leading to social upheaval.”
But rather than taking the easy way out – that of advocating a fortress mentality – CLS advocates the regularisation of the position of these people by letting them register as “guest workers”.
In this way their employers will have to abide by basic working conditions.
The memorandum also tackles the internal threat to working conditions posed by the outsourcing of work to companies which resort to low wages and sweatshop conditions.
Like the General Workers Union, CLS proposes that when subcontracting work public corporations and government should ensure that tenders include clauses about work conditions.
The present government has already announced that it would introduce green procurement principles to ensure that contractors respect the environment. By upholding the CLS proposal, it would merely be extending an extant principle to the social field.
One objection to such a policy would be that, by imposing higher wage costs on employers, they would end up hiring fewer workers.
But he memorandum disputes the logic whereby low wages create jobs and reduce unemployment, arguing that “growing inequality may hinder economic growth by amplifying the boom and slumps of economic cycles.”
In brief, lower wages result in lower consumption, which cripples the economy.
But the report is not insensitive to the costs faced by the private sector. Steering away from the political left’s traditional antipathy towards the private sector, the report seeks peaceful and “win-win” solutions for both capital and labour.
One “win-win” solution offered by CLS is to reduce State-induced costs for employers. Very concretely, the report calls on the government to remove the minimum threshold for employers’ National Insurance contributions.
But one area where the authors of the report are bound to create a stir in the business world is privatisation, which over the past years has been elevated to the status of a sacred cow.
Significantly the report calls for “reflection before going ahead with more privatisation of public utilities.” It questions the prevailing “dogma” which simply assumes that private entities deliver better than public ones and refers to the “low morale” and fatigue amongst public sector workers subjected to a barrage of reforms connected to the privatisation process.
According to CLS, “the low morale engendered by this fatigue is not conducive to higher productivity.”
But the memorandum comes a bit too late in the day, considering that there is little left to privatise, and also shies away from stating which sectors should be definitely “no-go areas” for privatisation.
The CLS warning comes in the wake of the complete privatisation of Maltapost Ltd – a case study of how an efficient public service was allowed to deteriorate as workers became demoralised in a decade-long process. Still, the very union representing these workers – the Union Haddiema Maqghudin – has ended up welcoming the final act in the privatisation process as an end to workers’ uncertainty.
Rather than seeing Malta as a sweatshop for low technology and low skill firms, the CLS sees Malta’s economic future in the research and knowledge intensive sectors which are consummate with the high levels of education achieved by many Maltese.
It welcomes the fact that the government is prioritising education and training but notes that working conditions in the IT sector are being left completely deregulated. Workers in e-gaming and call centres are not even covered by a wage regulation order and collective agreements which govern most other sectors.
One weakness of the report is that it lacks costings for increased state expenditure. By reducing costs for employers, while at the same time increasing social expenditure on childcare and education, the deficit could creep up again. But in the absence of higher wages, higher education standards and increased participation of women in the labour market, real and sustainable growth may prove elusive.