CEOs back ‘intelligent, sustainable’ increase in minimum wage

Business leaders are cautiously supportive of further increases to Malta’s minimum wage, while warning that any major increase must be introduced sustainably and backed by wider economic reforms.

Last week, Partit Momentum proposed increasing the weekly minimum wage by over 60 per cent, from €221.78 to €360, saying it “falls far short of what any person needs to live decently.”

Speaking to MaltaCEOs.mt, Managing Director of Sigma Coatings (Malta) Ltd Patrick Tabone said he believes Malta must move towards a system where the minimum wage allows people to “live on with dignity”.

“I certainly do think we need to move to a situation where the minimum wage becomes a wage you can live on with dignity in Malta,” he said.

At the same time, he cautioned against abrupt policy changes.

“Obviously, sudden shocks need to be avoided, and exact figures need to be carefully worked out.”

Mr Tabone also rejected the idea that higher wages alone would automatically improve productivity, arguing that broader investment is needed.

“I don’t think that simply raising wages is going to automatically increase productivity,” he said.

“For productivity to increase there needs to be investment, for example in education, training or machinery.”

He added that while wage growth should generally reflect productivity gains, the minimum wage should never fall below what is required for “a dignified life”.

Asked whether Malta’s minimum wage should increase in the current economic climate, Mr Tabone said the issue requires “serious study” rather than electoral promises.

“Yes, I do think that the MW should be increased to the level where it is a living wage. What that level is, and how fast you can get there needs to be the subject of serious study, and not election time promises.”

Mr Tabone also warned that Malta risks building an economy overly dependent on cheap labour, particularly foreign workers.

“We are on the way to creating a foreign underclass in Malta, and the economy is getting attuned to running on cheap labour,” he said.

“This is not the mark of a healthy or happy economy, and if the balance needs to change so that the real cost of a living wage becomes built into prices, then so be it.”

However, he stressed that reforms must be introduced “intelligently, in a balanced manner and at a sustainable pace”.

Meanwhile, Ozo Group of Companies Ltd CEO Fabio Muscat described the proposal as one rooted in legitimate concerns over the rising cost of living.

“Momentum’s proposal to increase the weekly minimum wage from €221.78 to €360 is undoubtedly driven by genuine concerns around the rising cost of living, which has affected both workers and businesses over the past years,” he said.

“It is important to recognise that many families are feeling increased financial pressure, and any improvement in workers’ income can have a positive social impact.”

Mr Muscat noted that Malta already has mechanisms in place aimed at protecting purchasing power, including the Cost of Living Adjustment mechanism and additional increases introduced by government in recent years.

“At the same time, Malta already has an established mechanism through the Cost of Living Adjustment formula, while government has also introduced additional incremental increases which are set to reach their maximum next year,” he said.

“Furthermore, various support schemes and subsidies were implemented in recent years specifically to ease inflationary pressures on households and businesses alike.”

While supportive of higher wages in principle, Mr Muscat warned that such a large increase would need extensive consultation across industries.

“Such a significant increase should be approached carefully and discussed extensively across all industries and stakeholders,” he said.

“Different sectors operate under different realities, and sudden substantial increases could place pressure on businesses, particularly SMEs, potentially affecting investment, employment sustainability, and Malta’s competitiveness in international markets.”

On productivity, Mr Muscat similarly argued that the issue is more nuanced than wages alone.

“Fair compensation can certainly improve morale, retention, and employee wellbeing, which may contribute positively to productivity,” he said.

“However, productivity also depends on factors such as training, efficiency, innovation, working conditions, and broader economic performance.”

Mr Muscat said future increases to the minimum wage should continue, but gradually and in line with economic realities.

“Gradual increases, guided by economic data, productivity levels, and consultation with social partners, are likely to deliver more stable long-term results for both employees and businesses,” he said.

He concluded by stressing the importance of maintaining dialogue between all stakeholders.

“Open dialogue between government, employers, unions, and industry representatives remains essential to ensure that any decisions taken are sustainable and beneficial for the country as a whole.”

Updated 13:45

Mark Cammileri Gambin, General Secretary of Momentum, candidate for the general elections on districts 3 and 11, and CEO at Talexio tells MaltaCEOs.mt that he is “pleased to see this well-received,” adding that the party’s focus “is the lowest earners.”

“This is the most effective, humane path to a decent living wage,” he says.

He adds: “As a CEO, I am also a firm believer that true well-being starts by giving people back their time away from multiple jobs and overtime. Crucially, this method is proven to boost the economy by increasing local spending power, while finally ensuring our most vulnerable can prioritise their families over survival.”