{"id":17401,"date":"2022-05-11T13:05:00","date_gmt":"2022-05-11T13:05:00","guid":{"rendered":"http:\/\/ndiqparate.al\/?p=17401"},"modified":"2022-06-25T13:30:03","modified_gmt":"2022-06-25T13:30:03","slug":"minimum-wage-and-loss-of-consumption-power-from-lack-of-actual-indexation","status":"publish","type":"post","link":"https:\/\/ndiqparate.al\/?p=17401&lang=en","title":{"rendered":"Minimum wage and loss of consumption power from lack of actual indexation"},"content":{"rendered":"\n<p>Open Data Albania is conducting a research concerning the indexation of the official minimum wage in Albania over the years, more specifically during 2000-2022. During this period there has been a regular increase in the formal minimum wage, excluding 2007, 2014-2016, 2018 and 2020. For 2022, the minimum wage increased in advance in April, although it was planned for mid-year. The move came a result of the hike in the level of prices, due to rising economic costs, following the Russian aggression in Ukraine. When we look at the annual change in inflation (CPI) from January 2021-March 2022, we can clearly see the upward trend in prices, culminating in the latter.<\/p>\n\n\n\n<iframe width=\"600\" height=\"371\" seamless=\"\" frameborder=\"0\" scrolling=\"yes\" src=\"https:\/\/docs.google.com\/spreadsheets\/d\/e\/2PACX-1vQJCmI5m1TNOJOpehhJm0xpApufk2XNHVvw1yprpry5AZXtJ8wLkYWiV02ckRpumK57EPMx9Jg-lmRT\/pubchart?oid=1744341604&amp;format=interactive\"><\/iframe>\n<br>\n<p style=\"font-size: 11px;\"><small>\nSource: <a href=\"http:\/\/databaza.instat.gov.al\/pxweb\/sq\/DST\/START__PKP__PTV\/PKP1319\/\"> INSTAT, Statistical Database <\/a> \n<br>\nComments and Analyses: Open Data Albania\n<\/small><\/p>\n\n\n\n<iframe width=\"600\" height=\"371\" seamless=\"\" frameborder=\"0\" scrolling=\"yes\" src=\"https:\/\/docs.google.com\/spreadsheets\/d\/e\/2PACX-1vQJCmI5m1TNOJOpehhJm0xpApufk2XNHVvw1yprpry5AZXtJ8wLkYWiV02ckRpumK57EPMx9Jg-lmRT\/pubchart?oid=141514515&amp;format=interactive\"><\/iframe>\n<br>\n<p style=\"font-size: 11px;\"><small>\nSource: <a href=\"<a href=\" https:=\"\" databank.worldbank.org=\"\" reports.aspx?source=\"2&amp;series=FP.CPI.TOTL.ZG&amp;country=\"> World Bank, Statistical Database <\/a> <br>\nSource: <a href=\"http:\/\/databaza.instat.gov.al\/pxweb\/sq\/DST\/START__PKP__PTV\/PKP1319\/\"> INSTAT, Statistical Database <\/a> <br>\nSource: <a href=\"http:\/\/www.instat.gov.al\/al\/temat\/%C3%A7mimet\/indeksi-i-%C3%A7mimeve-t%C3%AB-konsumit\/\"> INSTAT <\/a>\n<br>\nComments and Analyses: Open Data Albania\n<\/small><\/p>\n\n\n\n<iframe width=\"600\" height=\"371\" seamless=\"\" frameborder=\"0\" scrolling=\"yes\" src=\"https:\/\/docs.google.com\/spreadsheets\/d\/e\/2PACX-1vQJCmI5m1TNOJOpehhJm0xpApufk2XNHVvw1yprpry5AZXtJ8wLkYWiV02ckRpumK57EPMx9Jg-lmRT\/pubchart?oid=1069992675&amp;format=interactive\"><\/iframe>\n<br>\n<p style=\"font-size: 11px;\"><small>Source: <a href=\"http:\/\/databaza.instat.gov.al\/pxweb\/sq\/DST\/START__PKP__PTV\/PKP1319\/\"> INSTAT, Statistical Database <\/a> \n<br>\nComments and Analyses: Open Data Albania\n<\/small><\/p>\n\n\n\n<p>The minimum wage is the lowest wage (remuneration) employers can declare they paid their employees. Based on the declaration, the net salary is calculated after the deduction of taxes and mandatory social contributions. The minimum wage is defined via sub-legal act and becomes an obligation by law. The salary that employees actually receive is the net minimum wage, is the minimum wage after the abolition of taxes, health and social insurance. Specifically, for a minimum wage of ALL 32,000 (declared), the employee receives a net salary of about ALL 28,000 as the rest is deducted as mandatory contribution taxes. The indexed minimum wage, subject of this article, is calculated based on the previous year \u2018s minimum wage, plus the previous year&#8217;s inflation rate. In principle, the indexed minimum wage makes it possible for citizens receiving the minimum wage to buy in the present the same amount of products and services they bought with the previous minimum wage.<\/p>\n\n\n\n<p>If we examine the minimum wage and apply some simple calculations, we can find out how much is the annual loss of consumption power resulting from the official minimum wage not being indexed (in the opposite cases, we will look at how much consumption power is gained in ALL through the indexation). Hence, looking at the 2001-2022 period, turns out that the largest annual loss due to non-indexation of the minimum wage, is in 2016. Citizens who were paid with the minimum wage, due to non-indexation, earned ALL 19 066 less than they should have been, in order to maintain the same living standard as in 2013 (ie the last official minimum wage indexation). Equally, employees &#8211; paid a minimum wage- were paid less than should have been in 2003, 2004, 2007, 2014-2016, 2018, 2020 and 2022. Also, in 2022, although we had an increase in the minimum wage of ALL 2000, compared to the previous year, it is not enough to cover the increase in the level of prices, based on the INSTAT calculations. To assess the losses in the most accurate way, we divided 2022 into two parts: before the indexation of the minimum wage (January-March 2022) and after (April 2022). Until April, the loss has been in the amount of 1800 ALL for the first 3 months. The estimation was based on the 2021\u2019s inflation rate (change in the level of prices). After the latest indexation of the minimum wage, the calculations are based on the March 2022 inflation rate. Thus, the loss for the April-December period 2022 is estimated in the amount of ALL 3 098\/ 9 months. Overall, despite the formal increase in salary, the loss from the inability to cope with the inflation level, for a citizen who works at the minimum wage, is estimated in the amount of 4 898 ALL 12 months.<\/p>\n\n\n\n<iframe width=\"560\" height=\"346\" seamless=\"\" frameborder=\"0\" scrolling=\"yes\" src=\"https:\/\/docs.google.com\/spreadsheets\/d\/e\/2PACX-1vQJCmI5m1TNOJOpehhJm0xpApufk2XNHVvw1yprpry5AZXtJ8wLkYWiV02ckRpumK57EPMx9Jg-lmRT\/pubchart?oid=344160045&amp;format=interactive\"><\/iframe>\n<br>\n<p style=\"font-size: 11px;\"><small>\nSource: <a href=\"<a href=\" https:=\"\" databank.worldbank.org=\"\" reports.aspx?source=\"2&amp;series=FP.CPI.TOTL.ZG&amp;country=\"> World Bank, Statistical Database <\/a> <br>\nSource: <a href=\"http:\/\/databaza.instat.gov.al\/pxweb\/sq\/DST\/START__PKP__PTV\/PKP1319\/\"> INSTAT, Statistical Database <\/a> <br>\nSource: <a href=\"http:\/\/www.instat.gov.al\/al\/temat\/%C3%A7mimet\/indeksi-i-%C3%A7mimeve-t%C3%AB-konsumit\/\"> INSTAT <\/a>\n<br>\nComments and Analyses: Open Data Albania\n<\/small><\/p>\n\n\n\n<p>For a full comparison, on how much money the Albanian citizens &#8211; living on minimum wage- actually receive, we\u2019ll make the same distinction as above. Even when taking into account the net minimum wage, it emerges that citizens suffered loses the very same years as in the first case. When we consider the 2015-2022 period, the net minimum wage was not indexed in the following years: 2015, 2016, 2018, 2020 and 2022. In 2016, citizens who were paid with the minimum wage had the biggest loss, amounting to ALL 12 153, resulting from the difference between actual income they earned after taxes and increase in the general level of prices.<\/p>\n\n\n\n<iframe width=\"600\" height=\"371\" seamless=\"\" frameborder=\"0\" scrolling=\"yes\" src=\"https:\/\/docs.google.com\/spreadsheets\/d\/e\/2PACX-1vQJCmI5m1TNOJOpehhJm0xpApufk2XNHVvw1yprpry5AZXtJ8wLkYWiV02ckRpumK57EPMx9Jg-lmRT\/pubchart?oid=40911973&amp;format=interactive\"><\/iframe>\n<br>\n<p style=\"font-size: 11px;\"><small>Source: <a href=\"http:\/\/databaza.instat.gov.al\/pxweb\/sq\/DST\/START__PKP__PTV\/PKP1319\/\"> INSTAT, Statistical Database <\/a> \n<br>\nComments and Analyses: Open Data Albania\n<\/small><\/p>\n\n\n\n<p>To further expand the perspective on wage indexation, we also study the case of the average wage in the Public Sector. The data was retrieved from the INSTAT archives for the 2001-2020 period and we\u2019ll look at whether the average salary was indexed or not during this time. The losses in 2014 and 2018 are relatively small, but in 2016, they are estimated 1 403 ALL\/month or 16 832 ALL\/12 months.<\/p>\n\n\n\n<iframe width=\"600\" height=\"371\" seamless=\"\" frameborder=\"0\" scrolling=\"yes\" src=\"https:\/\/docs.google.com\/spreadsheets\/d\/e\/2PACX-1vQJCmI5m1TNOJOpehhJm0xpApufk2XNHVvw1yprpry5AZXtJ8wLkYWiV02ckRpumK57EPMx9Jg-lmRT\/pubchart?oid=853135809&amp;format=interactive\"><\/iframe>\n<br>\n<p style=\"font-size: 11px;\"><small>\nSource: <a href=\"<a href=\" https:=\"\" databank.worldbank.org=\"\" reports.aspx?source=\"2&amp;series=FP.CPI.TOTL.ZG&amp;country=\"> World Bank, Statistical Database <\/a> <br>\nSource: <a href=\"http:\/\/databaza.instat.gov.al\/pxweb\/sq\/DST\/START__PKP__PTV\/PKP1319\/\"> INSTAT, Statistical Database <\/a> <br>\nSource: <a href=\"http:\/\/www.instat.gov.al\/al\/temat\/%C3%A7mimet\/indeksi-i-%C3%A7mimeve-t%C3%AB-konsumit\/\"> INSTAT <\/a>\n<br>\nComments and Analyses: Open Data Albania\n<\/small><\/p>\n\n\n\n<p>If we consider the general average salary (for all employees: in the public and private sector), it turns out that during 2015 \u2013 2020, there was only one case when the average salary was not indexed, in 2016. The loss in this case is 2 055 ALL\/month or 24 661 ALL for the whole year. We only considered the 2015 &#8211; 2020 period, as INSTAT lacks data on the average salary in the private sector and as a consequence, also on the general average salary, before 2014.<\/p>\n\n\n\n<iframe width=\"600\" height=\"371\" seamless=\"\" frameborder=\"0\" scrolling=\"yes\" src=\"https:\/\/docs.google.com\/spreadsheets\/d\/e\/2PACX-1vQJCmI5m1TNOJOpehhJm0xpApufk2XNHVvw1yprpry5AZXtJ8wLkYWiV02ckRpumK57EPMx9Jg-lmRT\/pubchart?oid=1786023982&amp;format=interactive\"><\/iframe>\n<br>\n<p style=\"font-size: 11px;\"><small>\nSource: <a href=\"<a href=\" https:=\"\" databank.worldbank.org=\"\" reports.aspx?source=\"2&amp;series=FP.CPI.TOTL.ZG&amp;country=\"> World Bank, Statistical Database <\/a> <br>\nSource: <a href=\"http:\/\/databaza.instat.gov.al\/pxweb\/sq\/DST\/START__PKP__PTV\/PKP1319\/\"> INSTAT, Statistical Database <\/a> <br>\nSource: <a href=\"http:\/\/www.instat.gov.al\/al\/temat\/%C3%A7mimet\/indeksi-i-%C3%A7mimeve-t%C3%AB-konsumit\/\"> INSTAT <\/a>\n<br>\nComments and Analyses: Open Data Albania\n<\/small><\/p>\n\n\n\n<p>As we can see, the loss of consumption power from non-indexation in the general average wage, the wage in the public sector and the minimum wage, was higher in 2016. In short, in all three cases, 2016 emerges as a negative record for the 2000-2022 period.<\/p>\n\n\n\n<b>Download excel:<\/b><a href=\"https:\/\/ndiqparate.al\/wp-content\/uploads\/2022\/06\/Paga-Minimale-dhe-Fuqia-Blerese-humbja-nga-mos-ndryshimi-me-indeksim-1.xls\">Minimum wage and loss of consumption power from lack of actual indexation<\/a><br>\n<b>Comments and Analysis:<\/b> Open Data Albania<br> \n<b>Translated by:<\/b> Rezarta Cushaj <br>\n<b>Contributed by: <\/b> Ilir Brasha <br>\n<style>\np{\ntext-align: justify !important;\n}\n<\/style>\n","protected":false},"excerpt":{"rendered":"<p>Open Data Albania is conducting a research concerning the indexation of the official minimum wage in Albania over the years, more specifically during 2000-2022. During this period there has been a regular increase in the formal minimum wage, excluding 2007, 2014-2016, 2018 and 2020. For 2022, the minimum wage increased in advance in April, although it was planned for mid-year. The move came a result&hellip; <\/p>\n","protected":false},"author":1,"featured_media":17123,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false},"categories":[136,3030,57],"tags":[],"jetpack_featured_media_url":"https:\/\/i2.wp.com\/ndiqparate.al\/wp-content\/uploads\/2022\/05\/Data.Al_-Paga-minimale-zyrtare-2000-2022.png?fit=600%2C371&ssl=1","jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":23006,"url":"https:\/\/ndiqparate.al\/?p=23006&lang=en","url_meta":{"origin":17401,"position":0},"title":"Workshop organized by AIS, topic: \"Civil Society and Parliament in the Process of Drafting, Consulting, and Approving the State Budget","date":"December 2, 2024","format":false,"excerpt":"On November 27th, the organization AIS, a leading advocate for Open Data Albania, hosted a training session for local organizations, activists, and journalists on the topic: \u201cCivil Society and Parliament in the Process of Drafting, Consulting, and Approving the State Budget.\u201d The event was part of the project \u201cIncreasing Parliamentary\u2026","rel":"","context":"In &quot;ODA in Press Releases&quot;","img":{"alt_text":"","src":"https:\/\/i1.wp.com\/ndiqparate.al\/wp-content\/uploads\/2024\/12\/WhatsApp-Image-2024-11-29-at-15.11.02-4.jpeg?fit=1200%2C900&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":25187,"url":"https:\/\/ndiqparate.al\/?p=25187&lang=en","url_meta":{"origin":17401,"position":1},"title":"Civil Society Calls on Parliament Not to Undermine Transparency, Parliamentary Scrutiny, and Public Consultation in Accelerated Procedures for EU Integration Legislation","date":"March 14, 2026","format":false,"excerpt":"Joint Statement by Civil Society Organisations on the Draft Decision to Amend the Rules of Procedure of the Parliament of Albania\u00a0 Tirana, 13 March 2026\u00a0 A coalition of 31\u00a0civil society organisations, including\u00a0AIS \/ Open Data Albania,\u00a0has issued a joint statement raising concerns about the Draft Decision to Amend the Rules\u2026","rel":"","context":"In &quot;ODA in Press Releases&quot;","img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ndiqparate.al\/wp-content\/uploads\/2026\/03\/Screenshot-2026-03-14-153004-1.png?fit=1165%2C656&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":25285,"url":"https:\/\/ndiqparate.al\/?p=25285&lang=en","url_meta":{"origin":17401,"position":2},"title":"AIS Position on the Upcoming Rule of Law Report","date":"February 20, 2026","format":false,"excerpt":"The organization AIS wishes to express its concerns regarding several critical aspects of the rule of law in Albania, with a focus on the State-Owned Enterprises (SOEs) sector and legislation affecting Public Procurement, Public-Private Partnerships (PPPs), and the privatization of state assets. 1. 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