While new hirings in the public administration have been
frozen, the crisis-hit private sector and the households’ social
and unemployment benefits, enough only to keep a single
person out of the 1.25 USD -a-day income poverty line, remain
the only hope for 142,000 officially registered jobless people
By Ervin Lisaku
TIRANA, Jan. 24 – Facing global crisis impacts with lower FDI, remittances, and domestic consumption, creating new jobs in Albania is becoming a mission impossible. This is proved by the latest publication by the country’s Institute of Statistics, INSTAT, whose data are often criticized as unreliable due to the methodology calculating people living in rural areas possessing land as self-employed and taking into account only those people who think it’s worth registering themselves as unemployed with state agencies.
Latest INSTAT data show Albania’s official unemployment rate at the end of the third quarter of 2011 dropped to 13.25 percent, down only 0.01 percent compared to the previous second quarter and 0.27 percent less year-on-year. While on paper Albania’s official unemployment rate is among the lowest among regional European Union aspirants, latest developments with the crisis impacts becoming more and more severe show only a few hundred of people were hired in the private sector, whose confidence has dropped to the lowest ever historical rate as shown by the latest central bank survey.
While new hirings in the public administration have been frozen, the crisis-hit private sector and the households’ social and unemployment benefits, enough only to keep a single person out of the 1.25 USD -a-day income poverty line, remain the only hope for 142,000 officially registered jobless people and dozens of thousands of unregistered, especially young men and women who have graduated in the past few years. As the number of university graduates rises each year, also due to the boom in private universities, the branches students are graduating on, are not responding to market needs. More and more are studying law, social sciences, philology and foreign languages at a time when more professionals are needed in tourism, IT and other vocational training courses. Some of the these students are already doing jobs which do not need a diploma such as working in bars and restaurants, trade and call centers while the remaining majority has lost hope after failing to find a job for several years. The few newly graduates who manage to get a job these days are either very good or have the right connections, otherwise it’s not even worth applying because you won’t even get an invitation for an interview, jobseekers say.
The high level of informality, at an estimated 30 percent of the GDP, remains a top issue, at a time when even registered businesses pay social security and health contributions for only few of their employees, further widening deficit in the pension scheme.
Businesses hire only 353 people
The latest INSTAT data and businesses’ expectations about employment confirm the difficult situation Albania is facing despite managing to keep the economy growing at moderate annual 3 to 4 percent rates after the 2009 global crisis.
Official data show the number of employed people in the third quarter of 2011 rose by only 353 people compared to the previous second quarter while the number of unemployment assistance beneficiaries grew by 429 people. The private sector was the only contributor to a negligible 0.01 percent drop in unemployment rate, hiring only 353 new employees. Meanwhile, the number of officially reported jobseekers during the third quarter of 2011 rose by only 14 people to 142,082.
Under the latest macroeconomic framework, government expects unemployment rates to drop to gradually drop from 12.9 percent in 2011 to 9.4 percent in 2014.
Albania’s official jobless rates are slightly higher compared to more prosperous Croatia, Turkey, Montenegro, but three times lower to also EU potential candidate Bosnia-Herzegovina, 2.3 times lower compared to neighbouring EU candidate Macedonia, and almost twice higher compared to Serbia, all of which have a higher GDP per capita compared to Albania, according to the EC and Eurostat, the statistical office of the EU.
According to INSTAT, only 6 percent of the total registered jobless people benefit unemployment assistance of 6,850 lek (64.5 USD). Full social assistance for a household stands at 4,195 lek/month (Euro 30), having increased by 172 lek for 2011. INSTAT data show the minimum monthly wage stands at 20,000 lek (Euro 145) under a mid-2011 decision while the average state pension stands at 12,000 lek, while village pensions at 5,650 lek.
At the end of the third quarter of 2011, the number of people employed in the private agricultural sector, covering rural areas where inhabitants possessing land are automatically calculated as self-employed, remained unchanged at 506,664 people based on the results of a 2009 labor force survey. Public sector jobs also remained unchanged at 165,000 after 400 jobs were cut in early 2011.
Labor Ministry data show the majority of registered unemployed people are jobseekers who have only finished compulsory education. Slightly more than 62,000 others have finished high school while only 3,763 unemployed people were reported to hold a university degree. A considerable number of registered jobless peopleנsome 9,000נare minors aged from 15 to 19 years old, followed by the age group of 21 to 34 years with 52,560 jobseekers. What’s characteristic about the Albanian unemployment rate is that during the past 10 years it has been dominated by long-term unemployment which ranged from 89.6 percent in 2000 to an average of 92 percent until the end of 2009, INSTAT says.
Labor unions and the opposition claim the real unemployment rate is at least twice as high as what state institutions like INSTAT and the government officially declare. “The real unemployment rate in Albania varies from 22 to 34 percent based on regions and professions but always counting as employed even seasonal workers or home workers,” says the Confederation of Trade Unions recently.
Informal work arrangements remain widespread across most economic activities. Female participation and employment rates are significantly lower than for males, while unemployment is higher, said the European Commission in its latest report on Albania.
Despite extreme poverty rates officially reported to have dropped to 12.4 percent, and Albania becoming an upper-middle income country since 2008, associations claim that the rising cost of living has put around 60 percent of the Albanian population below the poverty line.
The latest figures on poverty rates in Albania date back to 2009 , when a study conducted jointly by a team of INSTAT, the UNDP and the World Bank found that Albania continued to witness significant reduction in poverty between 2005 and 2008 before the global crisis broke out. Results for 2008 indicate that 12.4 percent of the population was poor compared to 18.5 percent in 2005 and 25.4 percent in 2002. This means that about 200,000 people out of the roughly 575,000 poor in 2005 have been lifted out of poverty between 2005 and 2008 alone.
3,000 state employees to be laid off
An additional 3,000 people, most of whom working in state-owned enterprises scheduled for privatization but also in public sectors will be laid off and awarded unemployment assistance this year, the Labour and Social Affairs Ministry says in its 2012 draft budget. The beneficiaries include current employees in Albpetrol oil company, which is 100 percent state-owned and is under privatization, workers in the former Distribution System Operator (OSSH) as well as in Albtelecom, whose minority stakes remain state-owned. Cuts will also be made in the public education and health sectors as well as the military forces in addition to expected private sector workers who might lose their jobs.
