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Ekonomia

The details of the government project are clarified, here is who benefits from the 900 euro salary and what is hidden behind Rama's move, economic expert Feriti Selimi reveals the unsaid of the decision

The details of the government project are clarified, here is who benefits from

Economy expert Ferti Selimi commented on Prime Minister Edi Rama's promise for the historic increase in salaries in the public sector. A few days ago, Prime Minister Rama emphasized that in July the average salary will increase to 900 euros. Such news was welcomed by all employees of the administration and not only. But who benefits from this decision and what is expected to happen. "TODAY" newspaper is bringing to the reader a detailed economic-financial analysis today, while it also contacted the expert Ferit Selimi, to learn more about this decision. Mr. Selimi, during a statement for "SOT" newspaper, said that this is a long-awaited decision to value work more in relation to other incomes. Meanwhile, economist Ferit Selimi shows the impact of this news on society. "It is a positive decision, expected for a long time, necessary for all categories and salary structure in the public sector and as an incentive and obligation for the private sector. The level of wages more than a social policy depends on the productivity of the economy and the financial possibilities that each country has to implement it. In Albania for years there has been a handicap related to the salary level, not only comparable to countries with similar economic performance to Albania. From every point of view, it is a long-awaited decision and I believe it will be a more structural policy to value work more in relation to other incomes. The positive effects of the increase in the average salary, specifically: employees would have more income, having more income they would have a more consolidated personal or financial budget. They would be able to buy more goods and services, which means that businesses would also indirectly increase their profit margins. Another very important element seen in the macro-economic aspect is the fact that the pension scheme would have more positivity, more pluses because there would be more income from contributions. However, we must emphasize that the increase begins immediately in the most sensitive categories, starting with teachers, doctors and defense. Those who benefited from the full increase last year do not benefit. In the meantime, the categories that have not benefited will benefit", declared the economic expert, Ferti Selimi, during a statement for the "SOT" newspaper. Meanwhile, below the newspaper "SOT" is also bringing an economic-financial analysis, referring to the statement of Prime Minister Edi Rama.

Economic and financial analysis

Data

Prime Minister Rama has declared that from July 1 the average salary in the state will increase to 900 euros. But what happened to salaries in the public sector? The data show that the average salary has currently reached 87,800 ALL. The salary has increased by an average of 12% per year, or in total for the last two years by 24%.

How much of this increase is left in the pockets of employees?

 

(GR2) Inflation, the indicator that testifies to the increase in prices, has increased in the last two years by 11.5% in total. This means that half of the salary increase in the state has gone to amortization of prices and the real increase is only 12% for two years or about 6% per year. Prime Minister Rama has promised that starting from July the average salary in the public sector will be 900 euros. In economics, comparison is made on similar indicators. This means that it is worth it for the prime minister to present what the salary increase would be in lek, since we do not buy food in euros, nor do we pay our electricity and water bills in euros. While we are all witnessing the strengthening of the lek against the euro.

Let us analyze this promise of Rama

The current average salary in the state is 87,800 ALL, which converted to Euros is 870 Euros. Rama promises 900 euros, i.e. an increase of 30 euros, where the beneficiaries will be more than 184 thousand employees of the public administration, including those of the local government, since the unification of salaries in all municipalities has been promised. Beyond the discussion of whether this increase is large or small in the conditions when the euro is 1 to 1 with the lek, it is worth noting that a very large beneficiary of the increase in salaries in the state is the government itself. This is because it collects more revenue from payroll tax. Albania has the highest tax rates for employees in the region, with several bands: 0, 8, 13 and 25%. While all other countries are below us. This means we tax the employee or the job more than everyone else. Consequently, from the salary increase, the government will collect more income, reports "A2 CNN" television.

This is not the only benefit of this move by the prime minister

The increase in wages, which also increases the disposable income of employees in the state, regardless of how much or how little, happens before the general parliamentary elections, so the electoral effect is inevitable. On the other hand, the government provides more income from the salary tax and not only. More income will also be collected from social security contributions and this will finance the deficit of the pension scheme. Money that the government would be obliged to give. But instead of giving it directly to the pension scheme, it gives it indirectly through salary increases, selling it as an efficient electoral product. Another benefit is the withdrawal of salary increases in the private sector, as the state becomes competitive with business, in conditions where the number of employees in the administration continues to increase.