A recent Eurostat report said that workers in Malta earn €14.20 per hour before taxes which is less than half the EU-wide average. Moreover, a KPMG report had found that wage increases over the last two years were entirely eaten up by rapid inflation, leaving workers worse off in purchasing power and rendering real wages stagnant since 2018.

These indicators are not happening in a vacuum. They are further testament to the current economic model based primarily on consumption and cheap labour by third country nationals. While this approach may initially seem advantageous in reducing production costs and bolstering industries, it carries severe consequences that threaten the stability and well-being of both local workers and the economy as a whole.

In the short term this economic model appears to offer an immediate solution to plug certain labour shortages and cost concerns. However, the long-term repercussions of this strategy paint a grim picture, particularly for the local (Maltese) workforce. By flooding the labour market with inexpensive foreign labour, employers inadvertently create a downward pressure on wages across the board. This phenomenon, known as wage depression, erodes the purchasing power of local workers, exacerbates income inequality, and stifles economic mobility.

One of the most glaring dangers of relying on cheap labour is the displacement of local workers. As companies prioritize cost-saving measures, they often resort to outsourcing or replacing domestic employees with cheaper alternatives. Moreover, the influx of third-country nationals can strain public resources and infrastructure, leading to overcrowding, housing shortages, and increased competition for essential services.

Low wages often translate to poor working conditions, lack of job security, and limited opportunities for skill development. Consequently, productivity suffers, innovation stagnates, and the overall competitiveness of the economy diminishes in the global market.

The repercussions of prioritizing cheap labour extend beyond the economic realm and permeate into the social fabric of society. As local workers struggle to make ends meet in the face of declining wages, they are more susceptible to financial insecurity, debt, and poverty. This, in turn, leads to increased reliance on social welfare programs, higher rates of crime, and a decline in social cohesion. Moreover, the exploitation of migrant workers can result in human rights abuses, exploitation, and a perpetuation of systemic inequality.

Government must enact and enforce laws that protect the rights and interests of all workers, regardless of their nationality. Additionally, investing in education, training, and skills development programs is crucial to empower the local workforce and enhance their competitiveness in the job market. Furthermore, fostering a culture of innovation, entrepreneurship, and sustainable growth can help reduce reliance on cheap labour and promote long-term prosperity. A change in economic direction towards added value cannot happen overnight. On the other hand, adopting a defeatist approach on the grounds that it is too late to act, is just like throwing a time bomb to somebody’s else lap.

If we truly believe that this country has a better future we cannot turn a blind eye or stick our head in the sand.