A case against an incomes policy for Malta

Abstract

Since certain terms used in this paper are apt to have a different meaning to different people, it is desirable to define these terms before they are used. Labour is to be interpreted as all those engaged in the productive activity, and labour's income is defined as the payment to labour. This definition is necessary because a significant proportion of the Maltese labour force is made up of self-employed, who unlike hired workers, do not receive a wage. Consequently, a labour incomes policy would in the case of Malta, be more accurate than a wages policy. In everyday language, incomes policy has got a loose meaning. it would be possible to describe as an incomes policy our present practice of wage determination, whereby wage rates are for the most part settled by individual or collective bargaining or by statutory wage regulation (wage councils), with little or no regard to the repercussions which the wage movements may have upon the economy as a whole. It would also be possible to say that no policy is a policy.