With Malta’s economy set to enter a recession, one sociology professor has called for 20% of all wages to be cut and a shift to a three-day week to combat the incoming downturn.
To prevent any major redundancies in the country, Godfrey Baldacchino also suggested dropping the retirement age to 59 and refund 10% of all wages to businesses.
All of the measures would run on an initial period of three months, starting from April.
In a social media post, Baldacchino, who stressed he was no politician but an academic, explained:
“We need to bite the bullet.”
“Malta’s economy now faces a critical juncture. Up until a few weeks ago, employers were still concerned with the LACK of local, skilled human resources. Now, overall demand in most sectors is down; tourism is in free fall; sales of certain products are down 80-90%. This situation is likely to last at least for another 3 months; probably longer.”
“The current danger is for business to issue mass redundancies and contribute to mass unemployment. And the foreign workforce that has kept our economy going of late will then have no choice but to leave.”
“While it may appear inevitable in the short-run, this approach would, in my opinion, be the WRONG strategy, and undermine Malta’s long-term competitiveness.”
“The local economy needs to be READY to pick up the slack and get back to full capacity when the Covid-19 pandemic has taken its course. To protect our competitive edge, employers need to protect and hold on to their employees.”
An outbreak of the COVID-19 coronavirus in Europe has had significant effects on Malta, while the government’s decision to impose mandatory quarantine for all new arrivals and the closure of schools, bars, restaurants and any mass public events is also leaving an impact.
The government has so far announced a €1.81 billion package to combat any negative effects. However, the opposition has noted that the vast chunk of this money has actually been dedicated to bank guarantees (€900 million) and tax deferrals (€700 million).
Plans to compensate businesses for quarantine leave or temporary shut down have also failed to assure Maltese businesses.
It remains to be seen whether the government will alter its plans in the face of current criticism.