Imagine, if you will, two workers standing side by side at the bus stop in Republic Street, Valletta. Both are dressed in their uniforms, ready to start their day. One is a bank teller, the other a bus driver. Both are essential to Malta’s economy, yet their wages tell a different story.

The Numbers Game: A Widening Gap

According to Malta’s National Statistics Office, the average monthly wage in the financial sector, where our bank teller works, was €2,347 in 2020. Meanwhile, the average monthly wage in the transport sector, where our bus driver works, was €1,258. That’s a difference of over €1,000.

This wage disparity is not unique to Malta. It’s a global phenomenon. But in a country where the cost of living is relatively high, it’s a stark reminder that not all workers are equal, at least not in the eyes of their paychecks.

The Skills Gap: Cause or Symptom?

Proponents of free market economics argue that wages are a reflection of skills and supply and demand. In Malta, where the financial sector is booming, highly skilled workers are in demand, and wages reflect this.

However, critics argue that this narrative overlooks the fact that many jobs in lower-wage sectors require just as much skill and effort. Our bus driver, for instance, needs excellent driving skills, patience, and customer service acumen to navigate Malta’s busy streets safely and keep passengers happy.

the skills gap argument doesn’t explain why wages in the transport sector have stagnated while those in the financial sector have skyrocketed. In 2010, the average monthly wage in the financial sector was €1,450, less than half of what it is today. In the transport sector, it was €900, and it has only increased by a third since then.

The Policy Puzzle: What Can Malta Do?

So, what can Malta do to address this wage disparity? The answer is complex and complex, involving a combination of policies that target both ends of the wage spectrum.

At the lower end, improving wages in sectors like transport and retail could involve a mix of collective bargaining, minimum wage increases, and tax incentives for employers. It could also involve investing in training and education to increase the skills and productivity of workers in these sectors.

At the higher end, policies could target the financial sector to ensure that its growth benefits all of Malta’s workers. This could involve progressive taxation, investing in public services to support the growth of the sector, and encouraging financial institutions to adopt responsible business practices.

Ultimately, the goal should be to create a more equal playing field, where all workers are truly equal, regardless of the sector they work in or the skills they possess.

“We’re all in this together,” says Joe, the bus driver we met earlier. “If one sector is doing well, it should help the others too. That’s how it should be in a small country like Malta.”