Gjokutaj: Minimum wage in Albania a political decision, not aligned with reality

Economics expert and fiscal analyst at the company Altax, Eduart Gjokutaj, says for Kosovo Online that the minimum wage in Albania is defined as a political decision and is not aligned with the real economic situation in the country.

"The minimum wage in Albania is defined as a political decision. When minimum wage policies and economic policies in general are not aligned with market realities, they create problems during implementation and fail to meet the needs of the people," he explained.

Compared to the region, he says, the minimum wage in Albania has increased, but despite some convergence with other countries, it still lags behind.

"It is not normal to claim that the Albanian economy is growing while the minimum wage remains lower than in the Balkans. Just the neighboring country (North Macedonia) has at least 15% more than us, which shows how policies are made there," he emphasized.

Gjokutaj adds that couples with two minimum wages face significant problems, especially if they have children or are supporting other family members, which is a common situation in Albania.

"Last year, the minimum wage was 40,000 new lek, or around 400 euros at the current exchange rate. Of course, when we compare this to the minimum family expenses, we realize that it’s not enough. According to data from the Albanian Institute of Statistics (INSTAT), the average family spent 88,000 lek per month in 2023. For a couple with two minimum wages, the problems are substantial. It is important to note that people don’t receive the full minimum wage, as social and health contributions are deducted from the 40,000 lek, leaving them with less money," Gjokutaj explained.

He notes that many problems in Albania are addressed through the grey economy.

"From this, we understand that any increase in the minimum wage must be done within the context of the real situation. This increase is tied not only to people’s living standards but also to their productivity at work. Additionally, businesses need support to cope with political decisions, as these decisions increase operating costs. Political decisions must also consider the future direction of our economy," Gjokutaj concluded.