Albania and Kosovo ranked as countries with EU’s lowest minimum wages

Tirana Times
By Tirana Times February 4, 2020 11:55

Albania and Kosovo ranked as countries with EU’s lowest minimum wages

Story Highlights

  • Kosovo is in a similar situation to its neighbouring country according to official national data, as the current minimum wage in the country is 130 euros for employees under 35 years old and 170 euros for those over 35 years old.

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TIRANA, Feb. 4 – A recent report by Eurostat showed that Albania and Kosovo pay their employees less than in any other European country in terms of the minimum wage as stipulated by the law. According to the data, at the beginning of 2020, the gross minimum wage in Albania was 213 euros. 

While the minimum wage in the country has increased overall, it still remains the lowest in Europe, following Kosovo. As such, the growing migration during the last few years has also been linked to the low minimum wage in proportion to the overall prices of goods and services in the country.

Kosovo is in a similar situation to its neighbouring country according to official national data, as the current minimum wage in Kosovo is 130 euros for employees under 35 years old and 170 euros for those over 35 years old. The country’s minimum wage has remained the same since 2011, despite the consumer price index rising; although many called for an increase in the minimum wage to 250 euros last year, it was not achieved. 

As regards the rest of the countries in the region, they generally do not perform well in this area in comparison to European Union countries. Nevertheless, the minimum wage is still higher than that in Albania and Kosovo. According to Eurostat, the gross minimum wage in North Macedonia is 282 euros, while in Montenegro this is 331 euros. The highest minimum wage in the region is in Serbia, at 343 euros.

MAccording to Eurostat, the monthly minimum wages are generally under 600 euros in the eastern part of the EU and over 1 500 euros northwest of the EU.The 21 EU Member States that have national minimum wages can be divided into three main groups.

To begin with, Central and Eastern European countries accounted for the lowest minimum wages in the EU. Out of these, Bulgaria had the lowest gross minimum wage, precisely at 312 euros. Nine other eastern member countries followed with minimum wages between 400 euros and about 600 euros per month: Latvia at 430 euros, Romania at 466  euros, Hungary at 487 euros, Croatia at 546 euros, the Czech Republic at 575 euros, Slovakia at 580 euros, Estonia at 584 euros, Lithuania at 607 euros and Poland at 611 euros.

In the other five southern member states, minimum wages ranged between 700 euros and just over 1,000 euros per month: Portugal at 741 euros, Greece at 758 euros, Malta at 777 euros, Slovenia at 941 euros and Spain at 1 050 euros.

In the remaining seven Member States, all located west and north of the EU, minimum wages were over 1 500 euros per month: France at 1 539 euros, Germany at 1 584 euros, Belgium at 1 594 euros, The Netherlands at 1 636 euros, Ireland at 1 656 euros and Luxembourg at 2 142 euros.

 

Employment Opportunities

 

The low minimum wage is accompanied by another relevant issue in the country, as Albania did not perform well in regard to employment opportunities according to the World Economic Forum Global Social Mobility Report 2020. Based on 10 main indicators, Albania achieved an average score of 56 points, ranking alongside Georgia and Thailand. However, in terms of employment opportunities, Albania scored only 32.5 points, making it the second worst performing country in the report.

According to the report, only 46.2 of firms offer formal training for their employees and labor market policies in general scored only 30 points. Those with an intermediate education had a higher employability rate as opposed to those with an advanced education, which could explain the ongoing workforce decline as more professionals are leaving Albania. 

Additionally, over half of the workers are in vulnerable employment. This may also be related to the low minimum wage in the country, as INSTAT reported a while back that almost one-third of employees in Albania pay insurance with a minimum wage of 26,000 lek.

The results of the report raise concern over the current employment situation, considering the increasing ‘brain drain’ phenomenon in Albania. Officials have sought to bring more foreign professionals through facilitating policies; Recently, the government announced a draft law on the abolition of pension income tax for different categories of foreign citizens living in Albania. Additionally, the time for obtaining residence permits for foreign employees has also been reduced.

 

Tirana Times
By Tirana Times February 4, 2020 11:55