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How much salary do you want to live in Albania?
Written by Fatos Çoçoli 27 Mars 2023
A few days ago, the necessity of increasing wages to curb the high emigration to the country, brought the meeting of Prime Minister Rama with business representatives. It is good that the government realized that the central problem of the country is the flight of people prepared for a better salary and more dignified living conditions in Germany and Great Britain. It is a bit late, but people say "Better late than never". The Prime Minister said that the time has come for greater cooperation between the government and private businesses, to increase wages and thus motivate employees more in their workplace. Albania has more than 82 percent of its workforce engaged in private sector activities, while less than a fifth is employed in the state administration in the center and in the local municipalities, as well as in state-owned joint-stock enterprises. The increase in the minimum wage is not only necessary at this moment, but perhaps even necessary, as it will affect the inhibition of the contraction of the labor force and the departure of citizens from the country. Only for the year 2022, 42 thousand people left Albania, the vast majority of them of working age and employed in the country. High emigration is, in fact, a global phenomenon and the entire Western Balkans region is affected. Not only Albania, but also other countries in the region, are facing labor shortages in their markets. The trend of immigration, combined with demographic developments, has long dictated the need to increase the minimum wage. The government, starting from April 1, 2023, will increase the minimum wage in the country by 17 percent, from ALL 36 thousand to ALL 40 thousand. This is the sixth increase in the last ten years. After April 1, 2023, the minimum wage will be 81 percent higher than the minimum wage of 22,000 ALL in 2013, a decade ago. Albania will rank third in the region, after Montenegro and Serbia and together with North Macedonia, for the level of the minimum wage. But despite these movements, people's desire to emigrate is irresistible. However, by guaranteeing workers a more dignified wage in the country, this can mitigate the high rates of emigration for economic reasons, thus addressing issues of the shrinking labor force in the country, in the presence of the phenomenon of population aging. In the surveys carried out, both by the Investment Council and by the Balkan Barometer, the lack of labor force appears to be an essential challenge for businesses, where low wages are defined as one of the determining factors of dissatisfaction and discouragement, both for employees and job seekers. The workforce itself is constantly looking for a more dignified wage. Until the decision to increase the minimum wage in the country to 40,000 ALL, the minimum wage in our country was among the lowest in the region. The growing demand of jobseekers for a standard of living comparable to the countries of the region, but also beyond, has constituted another factor that influenced the decision-making of the government, to increase the minimum wage, beyond its objectives of the governing program. The further increase of the minimum wage, which is 3 times higher than the economic growth, will motivate all the beneficiaries of economic assistance, which are more than 83 thousand people in the country. Increasing the minimum wage is an obligation within all integration processes, one of which is the European Social Charter, where it is determined that the minimum wage should not fall below 60% of the average wage in the country. On the other hand, the International Labor Organization also suggests this. Before the decision to increase the minimum wage, the ratio was 51.5 percent. The Prime Minister emphasized that the time has come for businesses not to expect to be competitive only with the free labor force. It's time to change their business model. We have strong demographic changes. The aging of the population (we are the fourth country in Europe that is aging faster) brings the necessity to keep the labor force here by any means possible. Especially the qualified one. In the conditions of high immigration in the country, private businesses should also reflect, which have to pay their employees more. The Prime Minister called for them to declare their full salaries and not give a part of the salary to the employees in hand, while the rest in the bank. According to him, entrepreneurs have two solutions, either remaining without employees, reflect, or become aware and create a new relationship with employees.