Albania has the lowest average monthly salary in the region, according to estimates by the International Monetary Fund.
Salaries in Albania are no more than 340 euros a month, as Albania's neighbors offer very high salaries. The average salary in Macedonia, according to the data, came to 600 euros per month, while in Bosnia, more than 700 euros.Similar estimates of productivity and salaries in the Balkan region show that there is a difference between wages and a large number of beneficiaries who are paid at very low wages. The high wage gap is also the biggest driver of inequality in the Balkan region.
Montenegro and Bosnia have the highest salaries in the region and on the other hand, Albania with the lowest wage level.
A convergence report on wage levels in Western Balkan countries compared to Austria shows that in 2016 there was a decrease, especially in Albania.
Measured with purchasing power, the salaries in Albania are at around 25% of the average salary of Austria, while the average salary in Montenegro is 54% of Austria's average. Albania lags far behind at the lowest end of the wage scale. All Balkan countries (except Albania) have reported higher wage levels than Bulgaria. Salaries in Montenegro also exceeded Hungary's level.
In general, Western Balkan countries have reported high growth rates in real wages before the 2018 crisis. After the crisis, wage growth has accelerated in European transition countries, but not in Western Balkan countries.
According to a World Bank's study on wages and productivity in 2018, it was reported that Albania was the only country to note real wage cuts in 2016, among the 10 countries in Central and Western Balkans.
As the International Monetary Fund estimated that the investment climate in Albania emphasizes structural shortcomings. A weak system of justice, infrastructure deficiencies, an overly complex tax system, limited access to finance, and lack of skilled labor are not creating a favorable environment for investors, particularly in export-oriented sectors.
Low wages are an advantage, but lack of labor force capability is hindering the country to increase labor productivity and increase the value of its products.