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The wage market in Albania in recent years has begun to suffer from the power of monopoly, with which large companies, large employment providers have agreed to offer low wages.
The phenomenon was first noted by the International Monetary Fund in its latest report on Albania.
The concentration of the labor market in a few companies reduces the bargaining power of workers’ wages and may contribute to increasing poverty and inequality in the workforce, the Fund noted. In Albania, large companies represent only 1.4 percent of the total number of active businesses in the country, but they employ 41.4 percent of formal workers and contribute the most to net employment growth, which suggests the existence of monopoly power in some sectors, stressed the Fund.
Despite the 15 percent increase that the government applied to the minimum wage at the beginning of this year, bringing it to 30 thousand ALL, our country still has the lowest level of the minimum wage in Europe, with the exception of Kosovo.
The IMF said that the increase of the minimum wage up to 40 thousand ALL slightly affects the competition, but the further increase above this limit must be accompanied by decisive measures to reduce informality.
In recent decades concerns have grown about the dominance of a handful of companies controlling a large market share in a given industry. Large companies have the power to influence price levels and will exert pressure to keep wages low.
On the other hand, the power of trade unions not only in Albania, but everywhere in the world has been significantly weakened by the opening of labor markets and the transfer of production from developed countries to less developed countries.
In 2018, economists Alan Krueger and Eric Posner, authors of the “Monopoly Low-Income Workers’ Proposal and Secret Agreements,” found that secret labor market agreements or monopolization could help keep wages at bay. and this affects the increase in inequality.
They proposed a series of reforms to protect workers and strengthen the labor market. These reforms include obliging governments to ensure increased merger control over adverse labor market effects, banning non-competitive agreements that bind low-wage workers, and banning low-wage agreements. Monitor /
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