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The minimum wage in Albania is not only the lowest in Europe (except Kosovo), but it is worth much less if you calculate what you can buy with it.
Eurostat, in addition to publishing the minimum wage in value, also provides the minimum wage indicator, measured according to the purchasing power standard.
While the difference with Bulgaria (second after us) in the minimum wage in value is about 17%, when measured by the standard of purchasing power, the gap widens significantly, especially with countries in the region, which turn out to have a cheaper cost of living.
The Purchasing Power Standard (PPS) is a common artificial unit of reference currency used in the European Union that eliminates differences in price levels between countries.
So a PPS allows you to purchase the same volume of goods and services in all countries.
Theoretically, a PPS could buy the same amount of goods and services in each country. However, price differences across borders mean that different amounts of national currency units are needed for the same goods and services depending on the country. PPS are obtained by dividing each economic aggregate of a country into the national currency by the parity of its respective purchasing power.
According to Eurostat, the minimum wage in Albania, measured by the purchasing power standard is 365 PPS, while in Montenegro and Serbia, this indicator is around 590-600 PPS, almost twice as high as in Albania.
Northern Macedonia has the cheapest cost of living in the region, with PPS units, more than twice as much as Albania.
Compared to the developed countries of Western Europe, the purchasing power of the minimum wage in Albania is four times lower, for example, compared to Germany.
Other data show that Albanian households have the highest share of food expenditures in Europe, in the total budget, an indicator of the high level of poverty.
About 41% of the total expenses of an Albanian family go for food and non-alcoholic beverages, a percentage that is the highest in the region and in Europe, according to Eurostat data, which refer to 2019 and INSTAT for Albania.
After Albania, the highest percentage of expenditures for food and non-alcoholic beverages is in Northern Macedonia, with 30.6%, followed by Bosnia and Herzegovina (29.5%), Montenegro (24% .5), Serbia (23.6%) – data on Kosovo are missing.
For the European Union-27, this weight is 13%. The lowest in Europe is in the United Kingdom, with 7.9%, while in the countries of the European Union, Romanians have the highest share of food expenditures with 23.1% of the total.
The high budget spent by Albanian households in relation to the total they have available in a month is an indicator of higher poverty (food is a necessary expense for survival), but also relatively high prices in relation to income.
Our country has the lowest level of per capita income in Europe, compared to the EU average, but on the other hand the price level in our country is among the highest Regional, approaching closer to the EU average for 2020. In particular, food prices are approaching the European average.
Eurostat calculated that in 2020 food prices in Albania were 83.4% of the EU average and also the highest level in the Region.
Even in relation to Gross Domestic Product (GDP), Albania holds the record. According to Eurostat, final consumer spending on food and non-alcoholic beverages was 31.5% of GDP in 2019, while the second place behind us is Montenegro with 22.7% of GDP. The European Union-27 average for this indicator is only 6.8% of GDP./Monitor
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