TIRANA, July 22 – The private sector, which accounts for around 80 percent of Albania’s GDP and employs the overwhelming majority of four-fifths of the country’s population, has frozen wage increases in the past six crisis years losing its competitiveness to the smaller public sector.
Data published by the country’s state statistical institute, INSTAT, shows the private sector kept average monthly wages at about 36,000 lek (€253) from 2009 to 2013, a situation which is estimated to have continued even in 2014 although no data are available.
Gross wages in the private sector at the end of 2013 ranged from 31,734 lek (€223) in the trade sector to 35,113 (€247) in the construction sector and 51.638 lek (€363) in the transport and communication sector.
Meanwhile, the public sector, which employed 163,810 people at the end of 2014, increased wages by around 30 percent in the past six crisis year, becoming more attractive to employees.
Wages in the public sector rose from 40,874 lek (€287) in 2009 to 53,025 lek (€372) at the end of 2014, according to INSTAT.
Meanwhile, the minimum wage has increased from 18,000 lek (€126) in 2009 to 22,000 lek (€154) in 2014.
Increased wages and better working conditions in the public sector have made jobs in the public sector much more sought after with allegations of people paying bribes of Euro 3,000 to 5,000 for a job sometimes proven even by courts.
However, widespread informality in the private sector often makes official wages underreported to avoid paying taxes.
Although accounting for only 17 percent of total employment, the public sector contributes the majority 52 percent in the personal income tax, unveiling the high level of informality in Albania’s private sector which accounts for more than 80 percent of employment and GDP. A study carried out by Open Data research centre shows that the private sector which in 2013 had some 802,000 employees and contributed to 83 percent of employment had only a 48 percent share in the personal income tax in 2013 despite its workforce being five times higher. The situation is a result of the high number of uninsured private sector employees and non-declaration of real wages with tax authorities to avoid paying full social security, health insurance and personal income tax.
The data reconfirm the high level of informality in Albania’s private sector, estimated at more than 30 percent of the GDP.
The public sector workforce has been on a downward trend in the past decade as major enterprises have already shifted into private hands.
At the end of 2014, the public sector had 163,810 employees compared to 166,430 in 2009 and 191,000 in 2000 when major enterprises were still state-owned and the public administration was overstaffed.
Meanwhile, the private sector has been continuously growing over the past decade although agriculture accounts for 50 percent of total employment but only 20 percent of the GDP.
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 recently 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 labor costs for employers, but the worst in terms of income for employees.
