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MINIMUM LIVING AND POVERTY, ALBANIA COMPARED TO THE COUNTRIES OF THE REGION

Authors

Dr.Natasha Hoda, Doc.Dr. Hysen Hoda

Rubric:Management
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 The purpose of this article is to determine the living minimum for the year 2022 for Albania, as well as to highlight the impact that the formalized living minimum has on the standard of living of the citizens of a country. Although three decades have passed since the overthrow of the communist regime in Albania, a considerable number of families live in misery. Albania is the only one among the former socialist countries of Eastern Europe, without an official indicator of the defined living minimum, which means that our country currently lacks the basic level of poverty measurement. The payments benefiting individuals unable to work are very low, as well as pensions both in the city and in the countryside are extremely low, social support is in modest amount, and therefore the life of many Albanian families is at the limits of the struggle for survival. There are poor people in every country of the world, even though the goal of every country is to continuously reduce poverty. The living minimum and poverty are generally related indicators of a country's economy and both of tham are also related to inequality.  If we are going to talk about well-being and the poverty line, we must definitely have defined the living minimum and formalisation of it. The determination of the living minimum and the formalisation of this indicator must be an obligation for our country. On the other hand, the living minimum constitutes one of the most important social indicators of a country, which in a way shows the quality of life of the population. If they have to find out the number of poor families or individuals, we must first formalize the living minimum and then to define how many individuals or families are below this minimum, where is their location and then intervene with social policies and programs differentiated to reduce poverty. The calculation and formalization of the living minimum constitutes the low limit, below which should not have any type of payment, that is, the minimum wage, the amount of pensions, payment for individuals with limited ability to work and other social indicators must necessarily be at least in the level of the vital minimum. Since the living  minimum  is a variable indicator and expresses the dynamics of the standard of living of individuals in a society, it should be continuously indexed depending on the country's economic development, inflation etc.

The methodology of this study consists in the use of the secondary data method and the absolute poverty method, a method which is mainly used to determine the living minimum for countries in transition and developing countries such as Albania.

The objectives of this paper is to determine the structure of the basic products necessary for a normal life, the determination of services and other basic needs and the calculation of the living minimum for capita for the year 2022, referring to the previous authors as well as the updating of data for the year 2022, acording to the Tirana Institute of Statistcs (INSTAT) database.

Keywords

absolute poverty
relative poverty
basket products
food goods
non-food goods
poverty line.
minimum wage
Living minimum

Authors

Dr.Natasha Hoda, Doc.Dr. Hysen Hoda

References:

1. Harvey S. Rosen, Princeton University, Public Finance, 6th Edition, Translated into Albanian by "Albin" year 2003

2. ILO, "Methodology of Living Minimum Assessment in Kazakhstan and its Problems", 2012

3. Fabo, Brian; Belli, SharonSarah, (Un)believableWages? An analysis of minimum wage policies in Europe from a living wage perspective, IZA Journal of Labor Policy, 2017, ISSN 2193-9004, Springer, Heidelberg, Vol. 6, Iss. 4, p. 1-11, pp. 3

4.Arjana Fullani, Dritan Shano, Mirela Sota World Development Indicators, 201830 report Supported by UNDP.

5. Richard Anker ILO Calculation of the subsistence minimum. Review of the methodology

6. Schulten, Thomas; Müller, Torsten, Living wages cited in the research of  Arjana Fullani, Dritan Shano  and Mirala Sota. Report on the living minimum standard in Albania 2021

7. Wills and Linneker May1982 typically expressed as a wage necessary for survival based on the real cost of living

8. Glickman 1999; Brenner 2002. The Living Wages Movement.

9. Clean Clothes Campaign Policy Paper pg.5)

10. Ruggles, "Measuring Poverty", 1992, http://www.irp.wisc.edu/publications/focus/pdfs/foc141a.pdf also mentioned by ACER in the work Calculation of poverty in Albania 2016 pg.29

11. ACER (Albanian Center for Economic Research) Calculation of the living minimum in Albania, year 2013.

12. R. Bici and A. Mancellari, "Multidimensional Measurement of Poverty – The Case of Albania", 2015,

https://dialnet.unirioja.es/descarga/articulo/5575862

13. Disability Service Ireland, 'Guidance on a reasonable standard of living and living expenses' reasonable", 2013, http://www.isi.gov.ie/en/isi/guidelinesundersection23- final.pdf/files/guidelinessubsection23-final.pdf

 

14. Anker, R. (2011). Estimating a living wage: A methodological review. ILO.

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16. Martin Guzi WagesIndicator Foundation -Estimating Living Wage Globally-65 Coutries Evropian Conference on Living Wages – November 2013 Berlin

17. Arjana Fullani, Dritan Shao Marinela Sota" Report on the Living Minimum Standard in Albania 2021, pg. 24" Supported by the Norwegian Embassy, the Ombudsman and UNDP

18 Disability Service Ireland, 'Guidance on a reasonable standard of living and living expenses' reasonable", 2013, http://www.isi.gov.ie/en/isi/guidelinesundersection23-

final.pdf/files/guidelinessubsection23-.

19. Food and Agriculture Organization (FAO) Statistcl Woeld Food and Agriculture Statistcal Year book 2021

20. ILO An analysis of the Social Protection System in Albania. Coverage, Costs, Adequacy and Funding

OPEN DATA ALBANIA Living minimum, comparative approach between the countries of the Western Balkans and the EU

21. Institute of National Statistics of Albania (INSTAT) Family budget survey 2021

22. Institute of National Statistics of Albania (INSTAT) Price list of food products for 2022

23. Poverty Reduction Agency, "A summary of proposals for the revision of the national anti-poverty strategy", 200

24. Scott Adams and David Neumark Working Paper 9702 http// www.nbe.org/paper 9702. Living Wage Effects New and Improved Evidence

25. Ernset Engel Statistical Theory, Economic Theory, Poverty

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