Better in the state or in the private sector, how is the wage gap changing?

2025-09-15 07:21:00, Ekonomi CNA

In 2024, the average salary in the private sector was 22.7% lower than in the public sector, further deepening the difference compared to 2023 of 19.9% ??and 2022 of 16.3%.

In 2024, public sector employees received an average of 20.8 thousand lek per month more than private sector employees, in 2022 this difference was 16.3 thousand lek.

Official INSTAT data show that the average gross monthly salary in the state sector reached 92,069 lek in 2024, or about 12.4 percent more than in 2023. In the private sector, the gross monthly salary marked 71,179 lek with an annual increase of 8.5 percent more than in 2023.

The wage gap between the state and private sectors in 2024 widened mainly due to strong wage growth in public administration, while the private sector could not keep up due to high costs.

The latest data on average monthly salaries in Albania for the period 2014–2024 show a significant increase in salaries in both the public and private sectors, however, the difference between them remains significant. In 2014, the average monthly salary in the public sector was 53,025 lek, while in the private sector it was 41,970 lek, creating a gap of 11,055 lek or about 20.8% in favor of the public administration.

Over the following years, both sectors have seen significant wage increases, but the dynamics have been different. In 2018, the average monthly wage in the state reached 61,023 lek, while in the private sector it was 45,759 lek, widening the gap to 15,264 lek or 25%. This trend continued until 2021, when the percentage difference reached over 24%.

The data show that after 2022, the private sector has recorded a faster pace of wage growth, temporarily narrowing the gap with the public sector. In 2022, the gap fell to just 16.8%, marking the lowest level in the last decade. This is mainly due to more aggressive wage growth in the private sector, driven by stronger competition for labor, increasing demand and high emigration.

The situation changes again in 2023 and 2024. In 2023, the average salary in the state sector reached 81,887 lek, while in the private sector 65,566 lek, again increasing the gap to over 16,300 lek or about 19.9%. The trend is even stronger in 2024, where the average salary in the administration rises to 92,069 lek, while in the private sector 71,179 lek, creating a difference of 20,890 lek, which represents about 22.7%.

In 2024, the government undertook one of the largest salary increases in the public sector in the last decade. This is related to the salary reform, which aims to attract and retain professionals in the administration, especially in strategic sectors such as education, health, justice and national security.

While the public administration benefited from significant growth, the private sector failed to keep up with the pace. Many businesses, especially small and medium-sized ones, have faced high operational costs due to inflation and the rise in the cost of resources and the decline in foreign demand./ Monitor