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The "generous" market with uneducated people! INSTAT: They have the biggest drop in unemployment and the highest wage growth
Written by SOT.COM.AL 29 Shtator 2023
The labor market has given positive signals in recent years in terms of reducing unemployment, but for people with low education it is showing higher flexibility. The INSTAT data refer to the fact that in the second quarter of 2023 unemployment among people with 9-year education marked the highest drop than in other groups of unemployed with secondary and higher education. Specifically, the unemployment rate among people with 9-year education reached 9.3% in April-June 2023 with a decrease of 1 percentage point from the same period last year. In contrast, the unemployment rate among persons with secondary education reached 12.7 percent with an annual increase of 0.3 percent. Among persons with higher education, the unemployment rate reached 9.8% in the second quarter of the current year with an annual decrease of 0.7%.
In general, the labor market in the country is more effective towards uneducated people. The Albanian economy is still based on a model that uses cheap labor. The processing industry, agriculture, construction, etc., which are large employers, do not have education as a criterion in employment policies for most needs.
Of the 20 developing countries in Europe, Turkey and Albania rank first for the large labor force with a low level of education. In the Balkan region, Serbia and Montenegro have the highest percentages of the workforce with higher education. Serbia and Bosnia, on the other hand, have the largest percentage of the labor force with secondary education and therefore have less working-age population with primary education. In a broader comparison of the 20 developing countries of Europe, it can be seen that the Czech Republic and Slovakia are the countries that have about 70% of the workforce with secondary education.
The education system and the labor market have been in a vicious circle for years, as businesses accuse the government of not responding with education systems that suit the labor market. On the other hand, in university circles, professors think that Albanian businesses are not developing branches of the economy that require high qualifications.
For example, branches related to agriculture have the lowest number of pupils and students, while the sector is the largest provider of employment in the country with about 40% of the total. Low occupations also have the highest salary increases, narrowing the gap with high management levels. On the streets of the capital, you often find notices for waiters, cleaners, where salaries over 40,000 Lek net are offered, or laundry workers with 80,000 Lek and bakers with over 100,000 Lek per month.
INSTAT data show that salaries have increased at a faster rate for professions that do not require high qualification such as "Qualified workers of agriculture, forestry and fishing", "Workers (elementary professions)", "Employees of assembly and use of machines and equipment", which in nominal value at the end of the second quarter of 2023 were over 30% higher than in the second quarter of 2021, when with the end of the pandemic the lack of labor force began to be felt more. For the same period, the average salary in the economy increased by 25%, while the salary for "Managers, Legislators, senior officials of the state administration and executive directors" recorded the lowest expansion with 18%, followed by "Specialists with high (professionals)", with 21%. (see the chart:
The faster growth of low wages in relation to that of managers has significantly narrowed the gap between the incomes of managers and specialists with higher education and unqualified professions.
For example, in the second quarter of 2021, the average gross salary for the profession group "Managers, Legislators, senior officials of the state administration and executive directors" was 98,823 ALL/month and that for "Workers (Elementary Professions)" was 34,747 ALL. A manager was paid an average of 184% more than a worker.
At the end of the second quarter of 2023, a manager is paid 116,627 ALL/month and a worker 46,387. The gap has narrowed, as the manager now receives 151% more than the unskilled worker from the 184% more he was paid two years ago./MONITOR