The increase of the average salary in Albania (2013 – 2024) and the Pros and Cons

In Albania, the increase of the average salary is a topic often used as an indicator of economic improvement by the government, but it is also criticized for how it is presented and the real impact it has on citizens.

The debate over the increase of the average salary often divides opinions into two camps: those who see it as a sign of economic growth, and those who see it as an illusion created by statistics and the way data is presented.

While the government uses this increase to show economic progress, a deeper analysis shows that the reality for citizens is not so simple.

Is this increase an undeniable success or an economic illusion?

In 2013, the average salary in the public sector was 52,150 ALL, while in 2024 it has reached 100,437 ALL. This represents a 92.6% increase over 11 years.

According to the government, this increase reflects:

• A stronger economy. Salary increases go hand in hand with economic growth and public investment. The Albanian economy has experienced moderate growth during this period, with GDP growing from €9.6 billion in 2013 (1.35 trillion ALL) to €25.2 billion in 2024 (2.5 trillion ALL), thus allowing room for wage increases.
• Closer alignment with regional levels. Albania, which once had significantly lower wages than neighboring countries like North Macedonia or Montenegro, has reached a smaller gap, making the labor market more competitive.
• Stimulation of consumption and increased welfare. A higher salary enables citizens to have greater purchasing power, stimulating domestic consumption and improving living standards.

In macroeconomic terms, wage growth is an indicator that the government sees as a success of its economic policies.

But does this increase translate into a real improvement in the lives of citizens?

Although wages have increased, they must be compared to inflation, cost of living, and the fiscal burden to understand their real impact. In the same period, the average cost of living has increased by over 40%. In 2013, an average family spent 65,000 ALL per month, while in 2024 this figure has reached 91,675 ALL. If the wage increase is 92.6%, but inflation has absorbed a large part of this increase, the real purchasing power has not increased as much as it appears on paper.

Behind this optimistic figure lies a more complex reality. Wage growth cannot be seen in isolation from other factors that affect citizens’ well-being.

The increase in wages has been necessary but not sufficient to cope with rising prices and fiscal changes. Therefore, instead of celebrating a nominal increase, it is more important to analyze how much the real purchasing power of Albanian citizens has improved.

If wages increase, but life becomes more expensive and taxes absorb a large part of this increase, then the wage increase remains more of a political statistic than a real change in quality of life.

Taxes and contributions do not allow employees to receive more

In 2013, employee insurance contributions were 11.2% of the salary, and income tax had a lower progressive rate. In 2024, taxation and contributions on wages have undergone changes that have impacted the net amount received by employees.

This means that a large part of the nominal wage increase has been absorbed by taxes and social security contributions, reducing its impact on the real lives of citizens.

The use of the Euro to manipulate perception, as a propaganda strategy

The government has presented the increase in average salary in euros, creating the impression of a larger increase. The average salary is presented in euros for two periods where the exchange rate has changed over 11 years by about 43% less. On the other hand, Albania uses the lek as its official currency, and this way of presentation creates the illusion of a bigger increase than reality.

In fact, the increase in salary in lek is what matters to citizens, since they spend in the local currency. The change in the exchange rate may make the increase appear larger, but it does not change the real purchasing power.

Nominal increase, but not necessarily real

At first glance, the doubling of the average salary may seem like a strong indicator of economic progress. Despite wage increases, the pace of rising prices, fiscal burdens, and living costs has been high, meaning that the real impact of this increase has not translated into a noticeable improvement in citizens’ welfare.

As a result, the increase in the average salary in Albania cannot be seen as an undisputed success, but rather as an illusion created by the way data is presented.

Citizens do not live on paper figures, but on what they can buy with their wages. And if life has become more expensive, then the wage increase remains more of a political statistic than a real improvement in daily life.

If the life of an Albanian citizen in 2024 is as hard or harder than in 2013, then the wage increase remains a success only on paper, not in everyday reality.

This analysis clearly shows that although the increase in the average salary is an undeniable fact, the economic reality for citizens is more complex and less optimistic than presented by the government.

This conclusion summarizes the economic reality of Albanian citizens, exposing the paradox between nominal wage growth and the deterioration of purchasing power. If an average family fails to improve their living standards despite wage increases, then this increase remains more of a propaganda tool than an indicator of real improvement.

What does this say about economic policy?

A sustainable and real increase in welfare cannot be achieved only through salary increases, but requires inflation control, fairer fiscal policies, and improvement in economic productivity.

Wage growth must follow real economic growth and not simply be presented as a statistical success.

The government must focus not only on increasing wages but also on reducing the tax burden and the cost of living so that the real benefit is felt by citizens.

At the end of the day, the average salary should not be seen only as a number but as an indicator of citizens’ real lives. And if it does not improve their welfare, then it remains just a figure in official reports.