Is the state encouraging wage increases in the private sector? - Gjokutaj: It requires more than fiscal incentives
The increase in salaries in the public administration has brought back into focus the debate on the level of salaries in the private sector and the ways in which their growth can be encouraged. Unlike decision-making in the state sector, private business operates on the logic of the market, productivity and competitiveness.
Economic expert Eduart Gjokutaj estimates that salary increases in the administration do not automatically translate into the same rate for private companies, which face different operating costs and conditions.
"I think not directly, since the real wage increase that occurred in 2024-2025 failed to motivate the private sector to follow the same pace because there are other rules, decision-making is not political, but is a decision-making dictated by the market and by what companies and businesses have, but on the other hand it has to do with how competitive the economy is. In conditions where these do not exist, of course the private sector is in an increasing decision-making, but in such an increase that it does not burden the daily costs of doing business."
Among other things, it emphasizes that encouraging wage growth in the private sector should not rely solely on fiscal or financial measures, but on a broader reform approach to the labor market.
"First of all, the initiatives should not be financial and fiscal, but should be related to the labor market, that is, a reform of the labor market, in the context of how new employees will be approached, in order to increase that part of the validity, to increase the productivity of businesses, on the other hand, the part that has to do with how competitiveness in the country should change and their formalization in order that all of these together make the business interested in having the cheapest possible costs in the context of the rising cost of labor and on the other hand a more productive approach in terms of how it will operate, not just on a daily basis, but also in the medium and long term."
According to Gjokutaj, fiscal relief is a temporary aid but not an incentive, because according to him, it does not extend the effect long enough for costs to be recovered in the labor market.
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