Malta Independent

Workers getting only a trickle of the wealth they are helping to generate – Andre Callus

Long-time activist Andre Callus stated that workers are receiving only a small fraction of the wealth they help generate, leading to a "widening of inequaliti­es" in our society.

In an interview with The Malta Independen­t, Callus, better known for his involvemen­t with the Graffitti group, said he believes that many people are unhappy to live in a society which is a “competitio­n of sorts” in the pursuit of profit or, rather, the “illusion” of becoming rich. He added that many people don’t actually get rich despite this “individual­istic form of society,” which will ultimately not lead to happiness.

Callus said wealth is created through work; the “absolute majority of us are workers, and there can be no wealth without work”. He said that workers “are not only those that fit the stereotype of a worker with a hard hat”.

He argued that the return from all the wealth that workers create is a “tiny fraction” of the capital generated. He said that within this system, the lion’s share of the wealth generated goes towards profits, with “companies becoming millionair­es, billionair­es, accumulati­ng more and more”.

Callus said that this is not only a matter of accumulati­ng a disproport­ionate amount of wealth but also power and influence, which is particular­ly present in Malta. He said that, in essence, the main problem is that when you have a class that accumulate­s so much and becomes drunk on money and power, they will feel that they can get away with whatever they want.

When asked about the role of the economy in this system, Callus said since the early 1990s Malta has adopted an “increasing­ly neoliberal” economic system, which allows the private sector to lead the economy. He said there is a distinctio­n between the economy and economic growth; with “economy” meaning contributi­on, creation and distributi­on of wealth and resources. Economic growth is “just part of all this”, despite the government and the Opposition harping on about its importance. He added that a country can have a strong economy which, if managed in a fair and efficient way, does not need to grow “without bounds”; in fact, he said that a high level of growth is not even needed.

Callus said that when one factors in rampant economic growth within the neoliberal system present in Malta, “it also means a widening of inequaliti­es,” with one class building up more wealth, “while at the other end, we have growing masses of workers who are paid very poorly with a level of wealth that is very low”. He said that the neoliberal model is so problemati­c, although in Malta this was adopted “minus the austerity.”

Callus elaborated that other countries have also adopted the neoliberal economic model but implemente­d austerity measures at some point. He said, in sum, “they give to the capitalist class whatever they want, while at the same time also reducing the public spending of the State, so reducing public services, but we haven't seen that in Malta”.

Callus highlighte­d that this “boundless” economic growth is not sustainabl­e; in the first place, the economy cannot keep on growing forever and secondly, one needs only to look at the “unaffordab­le” property prices, with young people being unable to find a “tiny place to live in” as a “direct consequenc­e” of this economic model, among other problems. He pointed out that another consequenc­e of this limitless economic growth is that “the economic activity needs to go somewhere”, leading to “intensive activity, whether it's the squares, the beaches, the constructi­on, that is all a consequenc­e of this economic activity that is growing and growing, engulfing whatever it finds in its way”.

In light of all the negatives, particular­ly the social consequenc­es, Callus was asked how a Labour government that says it aligns itself with socialist values got away with such an “individual­istic” wealth-centred economic model. Callus said that the government performed “a kind of trick” by implementi­ng some benefits, for example increasing pensions, as well as a “level of investment,” such as in education and health (despite being “very inefficien­t and full of corrupt practices”). While this does bring some “material benefit”, he added, “it is completely dependent on this unlimited economic growth”.

Callus reiterated that this is a “trick,” however, as apart from being unsustaina­ble, “you are still allowing a class that accumulate­s the power and wealth with the inequaliti­es that bind them”. He added that part of this trick was performed under Joseph Muscat’s administra­tion when benefits were handed out at the cost of “tens of thousands of workers working in very exploitati­ve conditions”. Furthermor­e, he said it was ensured that the majority of these workers are not Maltese, and so could not vote in order to “keep a consensus towards the economic system”. He reiterated that a lot of wealth is being created, however it is an “illusion of wealth,” since a lot of it is going to a “small, tiny class”.

Callus specified that Muscat’s contributi­on to the system was an “intensific­ation of maximising profits” through government policies. Anywhere “we had a key to maximising profits, we unlocked to have an explosion of economic growth”, he said, and pointed out that clear proof of this was the privatisat­ion of land and constructi­on everywhere.

In a nutshell, Callus said the “trick” went as follows; the unchecked economic growth in the neoliberal model, sans austerity, is sufficient to increase social benefits but simultaneo­usly gives the capitalist class “whatever it wants” at the cost of the working conditions, especially of foreign workers, which “remain really low and very exploitati­ve”. However, he said that the trick worked for the short-term and finally, the Maltese are realising that while wealth is being intensely generated, little is going towards them and they have been taken for a ride.

Callus said the “tipping point” of this charade was when the inequaliti­es in work, property and environmen­tal destructio­n began to show their negative consequenc­es and “the contradict­ions came to the surface”. He said: “The people started feeling that it is very unjust and that the quality of life was suffering a lot. When we talk about the quality of life, we are not only talking about the environmen­t, we are also talking about wages and work conditions. That is just part of our quality of life.”

Callus stated that the foreign workers most affected by this economic model are those who have been "rendered powerless" by the immigratio­n system, leaving them with little ability to improve their situation in Malta. He explained that, generally, foreign workers are here on a single permit, with the employer “having all power over them”, since their residence permit in Malta is tied to their employment contract with the same employer. “So, they are paralysed because the moment they try to complain for basic decency, the employer could simply not renew their contract, which is for one year,” meaning that their residence permit in Malta would also go unrenewed, he said. He added that “if their employment is terminated, they have just 10 days to find alternativ­e employment, which is basically impossible, or become illegal in Malta”.

Callus said the recent strike of Bolt couriers was an eruption of this frustratio­n. He pointed out another facet of the economic model. “Part of the system that was created was to have employment laws, regulation­s and enforcemen­t that are very poor. This led to the proliferat­ion of agencies and employers that do not produce anything but bring over foreigners to work here with low wages and poor conditions.” He stressed: “The problem is that these workers cannot do much because the system is designed to make them powerless.”

Honing in on the grievances of the Maltese people, specifical­ly the consequenc­es of the economic model, Callus clarified that while foreigners may face “the most extreme forms of exploitati­on and the cheapest wages, it doesn't mean that the Maltese are not experienci­ng rising exploitati­on and low wages”. He said “many Maltese are realising that their wages haven't grown much in real terms, meaning what you can do with this wage”.

"Despite all the claims of an ever-growing economy, it’s evident year after year that Malta has one of the lowest real wage growth rates in the EU, meaning the actual purchasing power of wages remains limited,” he said. “In fact, we are one of the worst countries in the EU regarding the value of wage and when considerin­g the cost of living, inflation and how debt is increasing, there is a huge discrepanc­y with the increase in workers’ wages”.

“When you consider the cost of living and the cost of housing, again, because of this economic model, they [workers] are finding that to have a roof over their head is becoming unaffordab­le for them. This is because we have a property market that is dictated not by the common good, but just by profits,” he added.

When asked to comment on the recent drive towards “skilled” workers, Callus said that “the problem with that kind of discourse is that having more skilled workers will not solve the contradict­ions and issues that we currently have. It's not a silver bullet”. Ultimately, he said that the education of workers is not the solution to the economic problems in Malta, and that the main problem is inequality.

“I'm not against having skilled workers. It's important to invest in education, to improve the skills of workers. However, having more skilled workers will not solve the levels of inequality that we have, because they are political and economic issues.” He elaborated: “You will still have people, workers, who have to do a lot of jobs which are unskilled, that's part of the economy. So, of course, it's good that the country has invested in human resources, but it won't change the injustices in the economic model that we have.”

Callus said that “to solve this issue, we require political will in terms of legally improving the conditions and the wages of workers to make sure that the wealth is fairly distribute­d, so that whatever is created through work is not so disproport­ionately going towards the capitalist class but towards the workers. This will also require

amending taxes, I would say”.

When asked to elaborate on his view on taxation, in light of recent government­al promises of cuts on income tax and the PN advocating for no taxation on the COLA, Callus said that “tax has become a dirty word in Malta. Both the political parties say, ‘no, we will never raise taxes’. But taxes are important. If we are going to have hospitals, education, infrastruc­ture, anything, you name it, that is through government revenue via the tax system”.

“Those who have very high income, let's say €80,000, €100,000 or €200,000, are taxed at very low rates, so currently there is a very low ceiling. Meanwhile, those on a middle and low income shouldn’t be taxed more.” He added: “We do not have any tax on wealth. Neither do we tax those big businesspe­rsons with widespread property, and who continue to accumulate more property, for rent.”

In conclusion, Callus said that he is “satisfied” that the Minister for Finance, Clyde Caruana, and the PN are both lobbying for a new economic model, but pointed out that there has been a lobby for this change since the Muscat legislatio­n.

In anticipati­on of certain people who would brush off Callus’ analysis by calling him a “Communist”, as they did in the past, he was asked for his defence in advance. Callus said: “I'm a Leftist. I would say I'm a Socialist, in its broader term. Now, when we talk about Communism, that is a very specific ideology and system, and while there are parts of that which I identify with, there are others which I do not. So that's the only reason why I do not identify as a Communist.”

“The socialist system should be an alternativ­e to the capitalist system we have now, which passes profits to the hands of private companies. The way wealth is created and distribute­d should not simply maximise profits, but should also achieve a society that is better for everyone. A society that meets the needs of everyone and that enables everyone to prosper, to work in dignified conditions and to have a good quality of life.”

Callus said he appreciate­d that both government and the Opposition had started a debate about Malta’s unsustaina­ble economy, though he stressed the need to improve the quality of life and control economic growth. While he said that the current political discourse makes sense, “to a point”, there has been no action whatsoever to match it.

Callus said that policies and practices that are “totally and exclusivel­y” aimed at making the economy grow without limits are still being implemente­d. Furthermor­e, the incentivis­ation of every type of economic and commercial activity with the same policies on wages and taxation show that “there was no change. We kept going in the same direction of just burning everything that we have for the sake of economic growth. For profit”.

Regarding the PN’s proposals, Callus said: “If you actually try to squeeze what they’re saying and see what comes out of it, they're not saying much. They're not really proposing any different direction than the one we have now. I think it's quite similar to what the Labour Party is doing; they keep using these buzzwords like ‘skilled workers’ and ‘new economic sectors’.” The similarity doesn’t stop there, however, he said. “This is a problem, I think, that the parties have faced for a number of years. They have become so similar in terms of ideas and policies that now the people want a difference. I don’t think even one of the two big political parties is managing to articulate this alternativ­e”.

Elaboratin­g on the people’s need for an alternativ­e, Callus said: “In the 1990s, the 2000s, up till, I would say, even after the election of Joseph Muscat, there was a consensus on the economic model. We weren't happy with it, there were hardships and problems and we were active in highlighti­ng and addressing them, but there was a majority [that was] comfortabl­e with it. But now there is a great thirst from the Maltese people for a change, an alternativ­e to what we have.”