Wages are stagnating, in June they were the same as at the end of 2023

The wave of wage growth seems to have passed and now growth rates are back to normal.

The official INSTAT data show that the average monthly gross salary (the official salary declared in Taxes) reached 75,114 ALL in the second quarter or 5% more than in the same period last year.

Compared to the first quarter of 2024, the increase was only 2%, the same as inflation.

The highest increase was in the private sector with 6.7%, while in the public sector wages increased only 1.8%.

As can be seen in the attached graph, there was an aggressive increase in wages between the second quarter of 2021 and the end of 2023.

These developments were driven by the increase in wages in the public sector, especially the minimum wage which increased four times between the second quarter of 2022 and the end of 2023.

The level of the minimum wage in this period reached from 30 thousand to 40 thousand ALL. This increase encourages higher wages at all levels, also stimulated by the government's policy to bring the average wage in the public sector to around 900 euros.

According to INSTAT data, during the second quarter of 2024, the economic activities that offer an average gross monthly salary, higher than the national average salary, are Financial and Insurance Activities and Information and Communication.

Compared to the same quarter of last year, during the second quarter of 2024 the average gross salary for the financial and insurance activities group has the largest increase of 11.4%, while the smallest increase is for the activity group Public administration and defense; compulsory social insurance; education; health and social work activities of 3%.

During the second quarter 2024, the group-professions of "Managers, Legislators, Senior Officials of the State Administration and Executive Directors" and "Specialists with higher education (professionals)", offer the highest average gross monthly salaries, compared to the average salary at the national level.

The increase in salaries after 2021 in the private sector is also driven by the lack of labor force. Companies applied new human resource policies including wages as incentives to retain employees.

However, developments in the exchange rate have damaged the profits of export factories, which are also the largest employers of wage employment.

The damage to the industry, in addition to inhibiting the increase in wages, has also created unemployment in the main cities./ Monitor