With the general elections of April 25th approaching, the promises of the opposition to increase the minimum wage are intensifying. “Faktoje” found that the promise made by the DP Leader Lulzim Basha on Thursday regarding the increase of the minimum wage, was no longer 400 Euros as promised in September 2019, but it had gone down to 300 Euros. What is the experts’ opinion on these two promises?

On September 18th, 2019, the opposition leader Lulzim Basha, in his speech at the 7th Congress of the Union of Independent Trade Unions of Albania , promised that the minimum wage during his term as Prime Minister would be 400 Euros.

“I declare before this assembly, the DP’s decision to increase the minimum wage to 300 Euros within the first six months of our term, and to 400 Euros within 4 years. As a necessary measure for employees, without whom there can be no free market and welfare.” – stated Mr. Basha.

Why is the minimum wage important for citizens and business, according to experts?

“Faktoje” consulted with experts in the field of economy regarding the importance of the minimum wage.

“Minimum wage is important for the citizens, the economy, the business and public finances. It should be considered from two points of view: The real minimum wage and the official minimum wage, based on which the securities and taxes are calculated. Increasing the real minimum wage is a result of reforms, economic development, business health and the quality of human capital.” – stated the experts to “Faktoje”.

Their evaluation is as follows.

“Increasing the real minimum wage will directly affect the welfare of the citizens, meaning that it is tangible to them. It is an important indicator of the health of economy and business, as well as an indicator of the category of wages in general (such as the average wage).

However, what happens when the minimum wage is not supported by a real increase?

“Increasing the official minimum wage when not supported by a real increase or when informality is high, meaning that it will not be applied in reality, will increase the cost of formal business compared with the informal one, thus not resulting in any direct impact on the citizens’ revenue. It may promote informality and affect the level of employment. On the other hand, only the official increase of minimum wage would translate into more revenues for the State Budget from formal businesses and the self-employed.” – conclude the experts to “Faktoje”.

In regards to the promises made by Mr. Basha, today, during the presentation of the Democratic Party’s economic program, the promised minimum wage increase was no longer 400 Euros, as he had stated in September 2019, but instead it was 300 Euros.

“I undertake to increase the minimum wage to ALL 36,000 per month” – said Mr. Basha.

“Faktoje” asked the Democratic Party’s Leader about the reasons for his withdrawal of the promise made one and a half years ago to increase the minimum wage to 400 Euros.

As of the publication of this article, we have yet to receive a reply from Mr. Basha.