Wage growth in 2023 and gender equality

In 2018, according to Eurostat, women in Albania were paid 93.2 lek for every 100 lek paid to men, ranking Albania fifth among European countries with the lowest gender gap in average monthly salary.

In 2022, women were paid 95.5 ALL for every 100 ALL paid to men.

The gender pay gap has barely narrowed in the last 20 years and this has been strongly influenced by the drive to reduce the pay gap by aiming to address the underlying factors. The biggest identifiable causes of the gender pay gap are differences in the occupations and industries in which women and men are more likely to work.

One of the issues that has continued to gain ground and attention during 2022 and early 2023 is that of the gender wage gap between men and women in the labor market, according to sectors of the economy.

In the participation of women in the labor market, 40% of them work in the agricultural sector, 23% in public administration, 22% in services and trade in the private sector, 13% in the processing and production sector and 2% of women work in construction and extractive and energy industry.

In a comparison with the payment of women’s work in the labor market, even though there is a participation of them with at least 12% in agriculture, the woman’s salary is 6.2% lower than men’s, because the average salary for this sector is 35,600 ALL/month.

But even in administration, where the participation of women is 9.2% higher than the participation of men, the payment for women is 9.1% lower than the payment for men.

The same situation of inequality is also seen in the payment ratio in the services and trade sector, where while the participation of women is 7.8% lower than men, the payment for women is 9.1% lower.

There is no single explanation for why progress towards narrowing the pay gap has been so slow over the past decade. It’s a fact that women start their careers closer to pay parity with men, but they lose ground as they age and progress in their working lives, a pattern that has remained consistent over time.

The wage gap persists even though women today are more likely than men to have completed university and career-related specializations.

In fact, the wage gap between college-educated women and men is no narrower than that between women and men without a college degree. This points to the dominant role of other factors that still push women back or give men an advantage.

In this context of participation in the labor market, as well as the ratio between the wages that men and women benefit from their work despite what we mentioned above, there is still inequality in some basic activities of the economy and the private sector, as well as in the sector public.

In the last political decision of the government to increase public sector wages, addressing the gender inequality of wages, still evident, does not have a special focus.

Thus, starting from inequalities, a special moment in which there could be a more visible address based on the basic principle supported by the ILO “equal pay for work of equal value” should have a dedicated section on the future of closing the gap.

This approach of the government would also carry added values, starting from the fact that the promised increase in wages in the public sector is a historical increase in its content and should also include important policies for gender wage equality.

Inequality has its various aspects, where income inequality, gender inequality, or the inability to generate income due to health reasons and lack of chances to benefit from economic opportunities, all of these are closely related and mutually reinforcing in a society where inequality is complicated by the aging of the population, which is beginning to be felt for the first time in decades.

In this direction, parenting also takes on added value in dealing with the problem.

Mothers aged 25 to 44 are less likely to be in the labor force than women of the same age who do not have children at home, and they tend to work fewer hours each week when employed.

This may reduce the earnings of some mothers, although evidence suggests that the effect is either modest overall or short-lived for many. In turn, fathers are more likely to be in the labor force and work more hours each week than men without children at home. This is associated with an increase in fathers’ pay, a phenomenon referred to as the “fatherhood pay premium” and tends to widen the gender pay gap.

Even though the governing program has a special section related to the treatment of mothers and heads of households, the investment from the state budget as well as the policies governing the wage model in the private sector also needs a big push.

Based on the historical reality, that changes in the gender wage gap are also shaped by economic factors, because men and women tend to work in diverse types of jobs and industries, where their wages may respond differently to external pressures, we strongly suggest to first start with a new legal approach regarding the gender pay transparency initiative as a national policy.

Gender equality policies as an increased part of municipality-government programs, as well as organizations, should be optimized more with financial schemes, also achieving the implementation of the national strategy[1].

Based on good international experiences, an added value in this direction is related to the equality of income from work, which a large part of European countries is announcing as a more effective way for gender equality through the transparency scheme of wages. The strategy will need to adapt, but it should learn from the incomplete addresses of the past.

[1] https://shendetesia.gov.al/wp-content/uploads/2021/07/Strategjia-Kombetare-per-Barazine-Gjinore-2021-2030.docx