REPUBLIC OF ALBANIA MINISTRY OF LABOUR AND SOCIAL AFFAIRS THE WORLD BANK CONFERENCE ON LABOR MARKETS, GROWTH AND POVERTY REDUCTION STRATEGIES Thesaloniki, Greece (May 27-28, 2005) Topic : Labor Market, Wage Disparities and Poverty Presented

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REPUBLIC OF ALBANIA MINISTRY OF LABOUR AND
SOCIAL AFFAIRS THE WORLD BANKCONFERENCE
ON LABOR MARKETS, GROWTH AND POVERTY REDUCTION
STRATEGIESThesaloniki, Greece (May 27-28,
2005)Topic Labor Market, Wage Disparities and
PovertyPresented by Ahmet CENI, Deputy
Minister Of Labor and Social Affairs
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LABOR MARKET, WAGE DISPARITIES AND POVERTY

• 1.Introduction
• 2.The characteristics of labor market in Albania
• 3. Wage disparities and poverty
• 4. Problems
• 5. Ways of intervention

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1.INTRODUCTION

• During 90, Albania was characterised by
• Mass unemployment and hight inflation
• Stabilization of economy in the first phase in
  1996 and at the end of 1999, after the second
  crash
• Implemented sensitive structural and
  institutional reforms
• During the period 1998-2003 GDP is increased
  constantly 6- 7 .

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2. GENERAL ANALYSE OF LABOUR MARKET

• 1.The participation of labor force and the level
  of employment.
• 2.The level of unemployment and its forms
  (reasons)
• 3.The structure of unemployed
• 4. The unemployed according to the time that they
  are registered at the emplyment offices
• 5. The unemployment analyze according to the
  professional status,
• 6. The afflux analyze in the labor market

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2.1 The participation of labour force and the
level of employment

• Total population 3 135 000
• Active working age population 1 863 000
• The participation on the labour market 1 088 000
• The rate of participation c/d 58.4
• The total number of employed 931 000
• The level of employment e/c 60.8

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2.1.2 Participation according to sectors

• Agriculture 50.5
• Construction 6.6
• 2.1.3 Participation according to ownership
• Public sector 176 000
• Private sector non agricultural
• Private sector agricultural

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2.2 The level and the forms of unemployment

• a. Structural unemployment
• b. Conjectural unemployment
• c. Fractional unemployment.

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2.3 The structure of unemployed

• Based on gender view
• females 17.5
• males 12.4
• total 14.4
• b. Based on the regions
• Northern area 25.8
• Central area 13.4
• Southern area 13.6
• Tirana district 7.6

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2.3 The structure of unemployed

• c. Based on age
• age 25-45 comprise 57.1
• age gt 45 comprise 26.6
• d. Based on education level
• elementary school 53.3
• high school 45.1
• university 1.6

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2.4 According to the time being unemployed

• Long term unemployed 60
• Most of long term unemployed over 45 years old

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2.5 Unemployment according to professional status

• Workers 50 and
• 29 of them are job seeker without a profession
• Agriculture workers 20

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2.6 The analyze of the flow in-out on the labour
market for 2004

• Unemployed (31.12.2003) 163 030
• Entering during 2004 33 392
• Going out during 2004 39 414
• The situation at the end of 2004 157 008

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3. DISPARTIES ON THE WAGES AND
POVERTY

• 3.1 The minimum living standard was established
  
• 3.2 The minimum wage was fixed
• 3.3 The real wage and poverty
• 3.4 The rapport of minimal wage with average wage
• 3.5 The minimal and average wages were increased
• 3.6 Minimal wage and social benefits
• 3.7 The disparities on the level of wages between
  sectors

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3.1 In 2001 the minimum living standard was
established.

• 8860 lek per capita, or equal to 90 USD.
• 14888 lek per employee, or about 150USD,
• 24426 lek per one family with 4 persons, or about
  250 USD per month.
• The minimum living standard was made in
  collaboration with the Trade- Union

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3.2 The obligatory minimum wage was fixed.

• actually it is at the level 10800 lek in month,
  or about 110 USD.
• Actually the minimum wage is 16 time more than in
  the year 1992 ,
• At the non budgetary sector, the minimum wage
  has an important role in the protection of the
  poor part of the population

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3.3 The real wage and poverty,

• The inflation was higher than the wages pensions
  growth during the 90-93 period
• Because of this it was an reduction of the real
  wages,
• During the years 94-96, the wage growth was
  higher than the prices increase

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The real incomes are increased as follow
Years Inflation Real wage
1994-96 33.2 19
1997 32.1. -16.9
1998 20.9 1.0
1999 0.4 10.0
2000 0.00 17.0
2001 3.1 11.6
2002 5.2 8.1
2003 2.4 6.0
2004 3.0
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3.4 The ratio between the minimum wage and
average wage

• The minimum wage is increased more than the
  average wages, during the years 2000-2004 , in
  order to approximate to the indicators of the
  minimum living standard.
• The ratio between the minimum wage and average
  wage was reduced from 0,79 in 1990, to 0,37 in
  year 2001, and now it is 0,47.

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3. 4 the minimum and average wage growth .
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3.5 Minimum wage and the social benefits

1. Minimum pension is calculated 70 of the minimum
   wage
2. Unemployment assistance is 64 of minimal wage
3. The social assistance tend to go to minimum
   living standard
4. Invalidity pensions tent to go to minimum living
   standard.

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3.6 The Differences at the wage level between the
economic sectors

• 3.6.1 the disparities between sectors according
  to the ownership. (Look at the table / shih
  tabelen)
• 3.6.2 the level wages differs between different
  sectors according to the economic activity. (Look
  at the table/ shih tabelen)
• 3.6.3 The disparities of wages according to the
  regions.

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3.6.1 The disparities of wages according to the
ownership of sectors.
Wages interval Budgetary Budgetary Non Budgetary Firms
Number of employee The structure in The structure in Number of employee The structure in Number of employee The structure in
to 10800 1489 1.2 1.2 849 1.9 43079 51.3
10800-14000 12860 10.0 10.0 4544 10.2 18780 22.3
14001-18000 33766 26.4 26.4 12557 28.2 9426 11.2
18001-25000 43279 33.8 33.8 13386 30.1 6499 7.7
25001-37000 26610 20.8 20.8 9016 20.3 2684 3.2
37001-51000 9968 7.8 7.8 4109 9.2 3558 4.2
Total 127972 100 100 44461 100 83986 100
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3.6.2 the level wages differs between different
sectors according to the economic activity
Economic branch Minimum wage Average wage Ratio min wage/ average wage
Shipping 9400 48499 0.20
Rail transport 9400 13916 0.67
Roadway transport 10583 15000 0.70
Fishing 9000 14167 0.64
Manufacturing grocery industry 8667 12834 0.67
Textile industry 8083 12750 0.63
Hotels and restaurants 9000 12750 0.71
Electricity, gas and water supply 12917 16384 0.79
Construction 8750 16250 0.54
Leather, shoes industry 8250 15417 0.54
Plastic Manufacturing industry 9083 28334 0.32
Paper Industry 7667 16416 0.47
Chemical Industry 9083 28334 0.32
Metal manufacturing industry 10417 24250 0.43
Mining Industry 8917 27417 0.33
Telecommunication 9000 35917 0.25
Wholesale trade 8917 15750 0.57
National average 9400 18680 0.50
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3.6.3 The disparities of wages according to the
regions

• The average wage in the northern area is 50 of
  the average wage of central area,
• The average wage in the southern area is 80 of
  the average wage of central area,

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4. THE PROBLEMS

• After the appliance of an income policy for the
  reduction of the poverty
• Albania has 123000 families at the poverty level
  with incomes less than 2 USD per capita in day
• about 30000 families with incomes less than 1
  USD/day
• There is long term unemployment
• There is high emigration
• The growth economic rates do not cover the higher
  supply of the work force

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5. THE SETTLEMENT WAYS.

• One of the most important document is
• 1. National Strategy for Social-Economic
  Development (NSSES ),
• 2. The increase of the quality and the
  flexibility of the vocational training system
• 3. The enlargement and the modernization of the
  information services and intercession at work.
• 4. The appliance of the special employment
  programs for the poor category

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5. THE SETTLEMENT WAYS

• 5. The establishment of the conditions for the
  functioning of the national and regional market
  on equal and non discrimination bases.
• 6. The reduction of the informality and the
  improvement of the legal system .
• 7. The linkage between the monetary- budgetary
  policies- development policies- employment
  policies.
• 8. The improvement of the structure of budgetary
  expenses in the favor of investments and
  increasing the control of to maximize their
  efficiency.