Inequality deepens, the number of people with minimum and maximum wages increases in the second quarter

The government's decisions on increasing the minimum wage and doubling it for the top management levels affected respectively the expansion of the category of employees with the minimum wage and those with the maximum wage in the total number of employees with insurance.

According to INSTAT data, of the total number of employees who pay social insurance, 30.6 percent of them have salaries up to the minimum level of 40,000 ALL.

This category increased by 7.6 percentage points compared to the previous year. This happened due to the change in the limits of the minimum wage, which was increased in April 2023 to the level of 40,000 ALL from 340,000 ALL before.

In the first quarter, 21.6 percent of all female employees were paid up to the minimum wage of 340 ALL and 17 percent were in the 340-40 thousand ALL category.

The weight of employees with a salary of 40-50 thousand ALL in the total number of employees also increased at a higher rate than other categories. In the second quarter, 18.2% of employees with insurance were at this salary level, from 14% in the same period a year ago.

The significant increase was observed in the category of high salaries over 120 thousand ALL. People with high salary levels occupied 8.8 percent of the total number of employees with an increase of almost 3 percent compared to the same period of 2022. The expansion of this category came as a result of the government's decisions to double the salaries in the functions the top of the public administration after the local elections.

Despite the pressures that are coming from the lack of labor force, the employment structure in our country is dominated by people who are paid the minimum wage.

Our country has one of the lowest minimum wages in Europe according to comparable data from Eurostat. This level in Albania is imposed by the economic model based on free labor and in industries that require employment intensity such as the processing industry and agriculture.

For decades, the country has been unable to integrate into high value chains and orient economic development based on skills. Low wages are the main driving factor for the high emigration of the labor force and mainly young people.

All surveys on emigration show that over 90 percent of emigrants decide to leave for economic reasons.

Emigration at high levels further endangers the development of the economy, since with an aging workforce and a deep lack of skills in the labor market, the country risks remaining in the vicious circle of an unproductive economy./Monitor