Garment producers concerned over minimum wage increase

TIRANA, May 29 – Facing rising difficulty from lower demand by Italy and Greece, the country’s top trade partners, garment and footwear producers have called on government to freeze the minimum wage increase for this sector for a three-year period. Gjergji Gjika, the head of the Garment and Footwear Chamber said the expected increase of the minimum wage next July would further aggravate consequences for this sector, which produces Albania’s top exports and is one of the country’s top employers.
“The freeze of minimum wage increase for our sector would be great support for us to eliminate extra costs,” said Gjika.
Diversification of markets, considering that the majority 80 percent of these products go to Italy and the remaining share mainly to Germany and Greece is another concern for textile producers.
“We request the assistance of specialized institutions such as the Investment Promotion Agency (AIDA) or the Economy Ministry to influence on diversifying our market. We should target German and French markets more,” added the Chamber’s head.
Government has earlier said employers are also expected to face lower social security contribution rates from the removal of reference wages.
Government is planning to remove the value added tax for imports of machinery and equipment and merge the national council of business and labour into a single body as part of efforts to improve the business climate and increase Albania’s competitiveness.
Albania’s garment and footwear producers have warned 2012 will be a tough year for the country’s biggest exporting industry following lower demand from crisis-hit Italy and Greece, Albania’s top trade partners. The Chamber of Garment Producers says textile companies have already started cutting jobs after the drop in exports in early 2012.
Known as the fa谮 industry, the garment and footwear industry was the country’s top exporter for 2011 with exports rising by 15 percent to around 64 billion lek (Euro 450 million). More than 80 percent of Albania’s total garment and footwear products go to Italy and the remaining minority share mainly to Greece and Germany.
Latest INSTAT data show garment and footwear exports dropped by 4.3 percent in the first four months of this year.