The increase in wages is deepening the inequality between pensioners and employees

The increase in wages in the private and state sectors is deepening the inequality between pensioners, families with economic assistance and the rest of the population.

The gap between the average pension and the average wage in the country has been growing rapidly in recent years, as wages are growing at a much higher rate than pensions.

According to official data, in 2022 the average pension in the city was 44.4% of the average salary, while in 2021 this ratio was 48.3%. Before the pandemic in 2019, the average pension in the city was 50.6 percent of the average gross salary.

The difference between the pension and the average wage is even deeper for the countryside. In 2022, the average monthly payment for the village was 35% of the average salary in the country, while in 2021 this ratio was 39%. In 2018, this ratio was 41%.

The difference between the average salary and the average pension is expected to deepen even more this year, as the government is increasing salaries for the public administration with the aim of doubling them in the next two years, while only indexation and support with aid packages are foreseen for pensions when there are budget surpluses . For this year, an indexation is expected during autumn in October, with inflation rates. In the first 4 months of 2023, the average inflation was 6%.

According to INSTAT's determinations, which are based on international methodology, a pensioner is considered poor if the monthly payment is less than half of the national average salary.

Albanian pensioners for the most part receive payments much lower than the poverty line in Albania (6.7 USD per day), but last year pensions marked a sharp decline as a result of high inflation.

Official data from ISSH shows that in 2022 the average pension in the city with all compensations was 18,621 ALL with a 0.7% increase in value compared to 2021. However, during the past year the country saw an unusual increase in prices.

INSTAT data show that average inflation was 6.7% last year, causing real pensions to decrease by 6% in the city.

On the other hand, old-age pensions in the village remained unchanged. The monthly income for pensioners in rural areas reached 10,888 ALL with an annual increase of 6.8 percent, but meanwhile the real pension under the effect of inflation remained unchanged.

The measure of pensions in our country is below the relative poverty line by 6.7 USD per day, about 201 USD per month.

In 2022, the average pension in the city was 180 USD per month or 90 percent of the poverty line, while the average pension in the countryside was 105 USD per month or 52 percent of the poverty line./Monitor