The minimum vital shows the figure that allows a citizen or household (in the case where the data is taken per household) to live a subsistence level of life. Different countries have different vital minimum values.
The European Union uses the poverty risk threshold indicator to measure the minimum vital. The poverty risk threshold is calculated at the value of 60% of the equalized median disposable income of the household.
The data for this article were obtained from Eurostat, which calculates the figure for EU countries and Western Balkan countries. The state in Albania has not extended to the Minimum Vital legal support. If the Minimum Vital would be decreed as a legal act, the State itself, through public social protection schemes, would have to guarantee Pensioners and beneficiaries of Social and Economic Assistance with a monthly income no less than said Minimum. In fact, in Albania, there are about 85% of pensioners, mainly from the countryside, who receive a pension lower than the Minimum Vital, as calculated by Eurostat for Albania. In the same way, beneficiaries of economic assistance (where the family does not benefit in any case more than 8000 ALL) are discriminated against the level of the Minimum calculated by Eurostat for Albania.
As far as the EU countries are concerned, the country with the highest level of the Minimum Vital for 2021 is Luxembourg, with a figure of 2,124 Euros/month per individual. The second country with the highest limit of the living minimum measured in the form above is Denmark with a value of 1,604 euros/month. The Netherlands, Ireland, Austria and other EU countries follow.
The countries with the lowest value of the Minimum Vital within the European block are Romania (242 Euros/month), Bulgaria (258 Euros/month), Hungary (331 Euros/month).
The average living wage for all EU countries combined together is calculated at 869 Euros/month for 2021.
Table: The Minimum Vital in the countries of the European Union, in 2021
Source: EUROSTAT
Comments and Analyses: Open Data Albania
Source: EUROSTAT
Comments and Analyses: Open Data Albania
The value of the Minimum Vital has clearly increased, year after year from 2012 to 2021, which shows that the minimum living costs have increased. Specifically, the average of the European Union for 2012 marks the value of 679 Euros/month, while in 2021 it marks 869 Euros/month, an increase of 28% in living costs.
Table: The Minimum Vital in EU countries during the 2012 – 2021 years (Euro/month)
Source: EUROSTAT
Comments and Analyses: Open Data Albania
Source: EUROSTAT
Comments and Analyses: Open Data Albania
The annual growing trend of the minimum living wage shows that most EU countries have experienced growth throughout 2021. For a more accurate reflection of reality, the two-year progress was taken into consideration. This is because 2020 presents a number of problems, because of the beginning of the crisis caused by Covid-19, leading to a review of the economies. The countries with the largest two-year fall of the living wage within the EU are Lithuania (27%), Romania (25%) and Bulgaria (22%). The countries with the lowest two-year growth rate are France (1%), Italy and Finland (2%).
Table: The annual and two-year increase of the Minimum Vital in 2021, for EU countries
Source: EUROSTAT
Comments and Analyses: Open Data Albania
Source: EUROSTAT
Comments and Analyses: Open Data Albania
As far as the countries of the Western Balkans are concerned, Eurostat has started measuring this indicator at a later period in time. For Albania, on the EUROSTAT website, we find data calculated for after 2017. In 2020, Montenegro displays the highest minimum living wage, with 196 Euros/month per individual. The second country with the highest Minimum Vital threashold is Serbia with 187 Euros/month per individual. North Macedonia follows with 149 Euros/month per individual. Only then comes Albania with a figure of 126 Euro/month subsistence level per individual. Kosovo has not calculated this index for 2020, but for 2018 it was at a level of 103 Euros/month per individual. Eurostat has not calculated this indicator for Bosnia and Herzegovina.
The indicator for 2020 determines that an Albanian citizen resident in Albania during a month needs at least 126 Euros/month to live a basic life.
Table: Minimum vital value, EU and Western Balkan countries, 2020
Source: EUROSTAT
Comments and Analyses: Open Data Albania
Table: The Minimum Vital for the countries of the Western Balkans (Euro/month)
Comments and Analyses: Open Data Albania
Living costs have risen in the country since in 2017, when the minimum was calculated by Eurostat at 88 Euros/month. The increase to 126 Euros/month in 2020 means that for anyone living below the poverty line, their economic power has plunged by another 43%. Therefore, an increase in Economic Assistance, Pensions and Aid from 2017 to 2020 is neccessary to guarantee the same level of basic living.
Table: The annual and two-year increase of the Minimum Vital in 2021, for the countries of the Western Balkans
Comments and Analyses: Open Data Albania
85% of Albanian pensioners live within the confines of the Minimum Vital, which has been calculated by Eurostat for Albania. 10% of the households, instead, live in extreme poverty. The article draws from official data published by the Institute of Social Security for Social Protection. The Government refuses to give the Minimum Vital the power of law, for that would force her to increase the size of Pensions, as well as Economic Assistance. There are 576,000 pensioners (85% of the overall number of pensioners in the country) and 61,445 households who live below the Minimum Vital, calculated at a rate of 126 Euros per person or 15,586 ALL (as per 2020 exchange rate). The fact that 85% of pensioners receive less than the Minimum Vital, as calculated by EUROSTAT, was disclosed in an Albanian Government report, which accompanied the March 2022 revisions in the State Budget, otherwise known as the Social Resilience Package. Meanwhile, the number of households currently receiving economic assistance is 61,445, as published by the Institute of Social Security, along with the fact that the economic assistance for a household with no other income varies from from 2,108 Lek to 7,689 Lek in the case that a family with 6 or more members.
With these indicators of the Minimum Vital wage, as well as of those of individuals and households living below such limit, it appears that Albania is one of the poorest countries in the Western Balkans and Europe.
The data was examined and processed by Open Data Albania data analysts, I. Brasha, B. Lesi and G. Rruci.
The methodology used to equalize disposable income, used by EUROSTAT, as follows: 1- All household income, deriving from any form is collected and all taxes and obligations to third parties are removed, leaving in the end only the Net disposable income. 2- equalization is done by dividing the total value of net income by the equalized number of family members. Family members are calculated as follows: the first adult member has a coefficient of 1, other adult members (over 14 years old) have a coefficient of 0.5, and other members have a coefficient of 0.3. These coefficients are added and then, this amount is divided by the total net income of the family. In the end, what is obtained is the limit of the risk of being poor, which is sometimes referred to as the Minimum Vital.
Download excel:Comments and Analyses: Open Data Albania
Contributed by: Ilir Brasha
Translated by: Rezarta Cushaj