A new EU report shows that Malta’s booming economy, with GDP growth well above the EU average in recent years, is not trickling down to wages. Due to uncontrolled high inflation, Maltese households have much less purchasing power than before the 2019 pandemic.
The EU’s Joint Employment Report, published on Wednesday in Brussels, shows that despite the government’s intervention to pump millions into subsidies, particularly in water and electricity bills, Malta still registered a staggering decrease of -4.4 % in real wages in 2023 compared to the previous year.
Malta’s real wage growth is the worst in the EU, at -0.8% on average. This means that even though workers in Malta may be taking home a higher salary than they did in 2022, the high cost of living is quickly eating away at these gains, leaving them with less purchasing power than when they were earning less.
Moreover, while real wages in Malta are not expected to improve, those on the minimum wage are the worst hit, possibly becoming much poorer.
According to the EU’s study, between January 2022 and July 2023, those on the minimum wage suffered a decrease in their purchasing power of almost 10%.
“In Malta, no additional discretionary updates have taken place since January 2023, and as a consequence, the persistently high inflation has continued to erode minimum wages in real terms,” the EU report notes.
The same situation was only mirrored in Croatia, Ireland, and Portugal. In Malta, the situation may improve slightly this year with the introduction of an increase in the minimum wage but inflation is still expected to remain above the EU average.
While many Maltese workers are not on the minimum wage, most third-country foreign workers, who now amount to more than a third of the country’s workforce, earn either the minimum wage or just slightly above it.
Apart from their low income, this economic model, introduced by the Labour government, also keeps average Maltese wages generally low despite registering above-average economic growth.
According to the EU study, in 2023, wages in Malta had the same purchasing power as those earned by salaried employees in 2018.
The EU’s report confirms a local KPMG study issued last March. The study found that Maltese real wages—wages after accounting for inflation—have stagnated over the past few years and fell in 2023.
“Wages in Malta grew by just 1.5% in 2023 – the lowest rise in the EU – with inflation eating up this increase and more, and have remained practically at 2018 levels at real levels,” the KPMG reported stated.
So now the Maltese landlords have a perfect excuse to hike the rents two fold. As of Jan 2025, 1 room shitholes will go for 1500 eur minimum, very nice…
The burden of this will be weighted on foreign labour force. Problem solved (for the locals). Untill they start leaving massively.
Good luck Malta.
The real reason for this is that the PL government is more capitalist than the USA.
Massive fraud, corruption in high places is certainly a major cause. The few are getting much richer whilst the majority and the poor are getting poorer.
A thorough investigation of unexplained wealth, the wage structure and the increase in crime are the effects of bad fiscal management by the current administration.
Both Ministers of Finance, one now sitting pretty and earning more than what are the salaries and perks in the private sector, after serving a term and stating that “he was never included in the Kitchen Cabinet”. The current Finance Minister is totally excluded in the financial overview and control of government’s spending.
Absolutely. Well said.
Apply the rules of the Very Big to the Very Small and the result is Unpredictable, Extreme and Bizarre, Stephen Hawking!
Looks like my decision to turn down a job in Malta in favor of one in Latvia was the correct decision.
If there will be a real law to regulate the rents, like 4+4 contract, the prices will continue to grow. The Maltese are not understanding the foreigners are the only resource that they have and if they don’t treat well them, since are people these people can decide to change the country to live and the worst thing is even the youngs Maltese want to leave Malta.
Malta is the EU country with the highest rate of expatriates.
The conclusion is: Malta for sure will have an economy issue in the future I do not know when but there will be and Malta will have concrete everywhere, destroyed landscapes, ugly beaches, etc.