The low labour costs are of the key reasons for huge investments in garment and footwear companies and the boom in call centers which have emerged as the country’s top employers, but experts are skeptical these two sectors can drive the economy at a time when they attract mostly unqualified people often at minimum wages of around 22,000 lek (€ 154) per month
TIRANA, May 4 – Albanians work the longest hours and are among the poorest paid in Europe, a survey published by the country’s state statistical institute, INSTAT, has found.
Albanians work an average of 2,102 hours a year and cost employers only Euro 2.2 per hour, ranking Albania the cheapest country in Europe in terms of labour costs for employers, but the worst in terms of income for employees.
In Albania, the average hourly labour cost, two-thirds of which includes wages and bonuses, is at least twice lower to regional EU aspirants such as Macedonia, Serbia, Bosnia and Herzegovina and Montenegro where labour costs range from Euro 3.5 to 5.8 an hour, according to INSTAT.
However, the differences with new EU members are narrower with Bulgaria ranking the second cheapest country with Euro 3.4 per hour and Romania being the fourth cheapest with Euro 4.1.
Meanwhile, in the EU28, average hourly labour costs in the whole economy excluding agriculture and public administration stood at €24.2 and €29.3 in the euro area EA18 in 2012, according to a report by Eurostat, the statistical office of the European Union.
Full-time employees worked on average 1,750 hours per year in the EU28 and 1 661 hours in the euro area in 2012 with the average number of annual hours worked ranging from less than 1,600 hours in Belgium (1,462), France (1,555), Italy (1,565) and Denmark (1,571), to more than 1,800 hours in Romania (1,850) and Malta (1,961).
The labour cost survey in Albania was carried out in late 2013 with non-agricultural enterprises with at least 10 workers.
Full-time employees accounted for the overwhelming majority of 98.2 percent of total workers, compared to only 1.7 percent as part-time workers and 0.2 percent as interns.
Non-agricultural enterprises with at least 10 employees operating in sectors such as education,
public administration, defence and mining and quarrying, have the highest number of employees, the survey found.
Wages and salaries, bonuses and allowances account for 82.4 percent of the annual labour costs in Albania, followed by social contributions paid by employers at 15.3 percent, recruitment costs and spending on workers’ clothing at 1.96 percent and 0.4 percent on vocational training and employment taxes.
Non agricultural enterprises with 10 to 49 employees have the lowest average hourly labour cost per employee in full time units at 265 lek (€1.8).
The economic activities with the lowest average hourly labour cost per employee in full time units were water supply; sewerage, waste management and remediation activities at 210 lek (€1.5), accommodation and food service activities at 215 lek, and manufacturing at 219 lek.
At 545 lek/hour (€3.81) financial and insurance activities have the highest hourly labour cost per employee in full time units in Albania, the report shows.
The low labour costs are of the key reasons for huge investments in garment and footwear companies and the boom in call centers, which have emerged as the country’s top employers, but experts are skeptical these two sectors can drive the economy at a time when they attract most unqualified people often at minimum wages of around 22,000 lek (€ 154) per month, the lowest in Europe.
GDP per capita, price levels
Albania’s GDP per capita, an indicator of the standard of living, dropped to 2,904 Euros in 2013, the lowest level in the past seven years and the poorest among enlargement countries, according to data published by Eurostat, the statistical office of the European Union.
At 2,904 euros in 2013, Albania’s GDP per capita was lower even compared to potential candidates Kosovo and Bosnia and Herzegovina and at only 11 percent of the EU 27.
At around 8.4 billion euros in 2013, Albania which has a population of around 2.9 million people had a higher GDP compared to Kosovo, Macedonia and Montenegro which have smaller populations.
Albania’s GDP per capita, a measure of economic activity, and the actual individual consumption, an indicator of the material welfare of households, ranks among the poorest in Europe, at almost a third of the EU 28, according to the latest Eurostat data.
Albania’s GDP per capita expressed in purchasing power standard, an artificial currency unit that eliminates price level differences between countries, was at 28 percent of the EU 28 in 2013, ranking the lowest in the region.
Meanwhile, Albania’s actual individual consumption per capita in PPS was at 33 percent of the EU 28 in 2013, ranking Albania on the bottom of a 37-country list which includes 28 EU member states, three EFTA members, four EU candidate countries and two potential candidate countries.
While Albania has one of Europe’s lowest GDP per capita, price levels for consumer goods and services are also among the lowest in 37 European countries, according to a recent report published by Eurostat, the statistical office of the European Union.
At 51 percent of the EU 28, Albania’s price level indices for consumer goods and services in 2013 was higher only compared to Macedonia’s 47 percent and Bulgaria’s 48 percent in a 37-country list which includes 28 EU member states, three EFTA members, four EU candidates and two potential candidate countries. The results reconfirm that Albania is one of the cheapest countries to live in across Europe although it has the lowest wages in the Balkans.
Price levels for consumer goods and services among EU candidates and potential candidates in the region varied from 47 percent in Macedonia, to 53 percent in Bosnia and Herzegovina, 54 percent in Serbia, 56 percent in Serbia and 64 percent in Turkey.
