Majority of 52,000 non-EU workers in Malta on minimum wage, under tax threshold

Some 20,000 non-EU workers, mainly from Asia, Africa and other developing regions, work in Malta full-time but earn €875 a month, equivalent to the minimum wage, further increasing their risk of falling into poverty amid rising inflation and the high cost of living.

A further 14,000 earn under €16,000 a year, equivalent to €1,333 a month, and another 18,000 earn under €1,766 a month. Just 762 non-EU nationals in Malta earn more, according to figures given in parliament this week by Finance Minister Clyde Caruana.

The data he presented was based on tax declarations from 2022, which counted 52,106 third-country nationals working in Malta, but it is estimated there are thousands more working illegally and with even lower salaries.

In 2013, Caruana was the chairman of the government’s job agency, JobsPlus and had a big hand in engineering the current economic model, calling for more foreign labour to help grow the country’s economy.

Malta has since added 20,000 non-EU individuals to its workforce annually, mainly in the hotel, catering, construction, and healthcare sectors. Many of these workers are supplied by local agencies that arrange their visas and positions while taking a significant commission.

These agencies are largely unregulated and have increased despite calls for scrutiny.

Confirming how Malta’s economic model has been skewed towards cheap labour in the past years, Caruana told parliament this week that of the 52,106 non-EU workers currently in full-time employment, only 762 earn enough to pay their taxes at the highest rate of 35%.

The data shows that most third-country nationals do not qualify to pay taxes to the state. They do, however, contribute national insurance payments without any realistic prospect of being able to claim a pension when they retire.

Last June, Caruana said that Malta’s population should increase to 800,000 by 2040 to sustain its current ‘economic growth levels’.

With a population of just 600,000 (according to official statistics), many sectors of the economy and society are already at capacity, leading to problems with infrastructure, including electricity distribution, waste collection and sewage management.

It has also partly fuelled a construction boom, leading to rental costs going through the roof.

Many constituted bodies, including the Malta Chamber, the Malta Employers Association and others, have repeatedly called on the government to change the current economic model before it is too late.

The government, led by Prime Minister Robert Abela, has promised to reform the country’s reliance on foreign labour, including raising the minimum wage and changing the country’s economic model.

However, concrete measures still need to be implemented, and the Malta Chamber of Commerce has warned that hiking wages could accelerate inflation and “put the country on the path of implosion”.

Last week, The Shift reported that one in every six workers in Malta is paid just €1000 monthly. 

Malta’s workforce reached 290,000 last year, with the median income at €1,582 per month.