Albanian workers are still cheaper Interview: Emma Engel

Artan Xhiani is Managing Partner of the Albanian Consulting Network UHY Elite and member of Confindustria of Albania. So, let us read about what a finance manager thinks about fair working conditions connected to fashion.

 

You mentioned that the gap between the minimum wage and the live spending is wider in Albania compared to other countries like for example China. How is that possible?

There are many reasons for low wages. The Albanian governmental system is still weak and cannot have a full control in the labor market. Therefore in some areas, there are employees who are working under difficult conditions and earn less than the minimum salary, and sometimes paid in black (not declared for tax purpose) .

The most people working for textile companies never learned that job and so get lower wages because there is a higher risk for mistakes in the production process. Albanians will embrace a different workplace for “only” 5,00 € more a month because of the financial gap.  There have never been official figures published regarding the minimum life expenditures per person or per family in Albania. However, there are some indicators which tell us that the minimum living cost per person is 200-250 Euro per month excluding the dwelling expense.

The minimum salary defined in the law is 180 Euro per month since May 2017 and most of the workers get paid close to this amount. Still, it is not enough to cover living costs and other expenses such as taking care of their children and families at the same time.

Why do employers hire uneducated employees when there is an existing risk in failing the quality control of those textiles she/he sewed?

 The educational system in Albania has been focused on universities and high college in the last 25 years, that is why there are too many jobless accountant, lawyers, engineers, dentists, etc. and there are not enough qualified labors because the education system for the qualified labors was almost in-existent up until 5 years ago. Looking at the high demand for qualified labors in the market, the government is now investing and sponsoring professional schools which produce skillful/qualified labors. In this context, the employers have had (and still have) difficulties to find already qualified employees for their business. There are two options:

  1. hire unqualified people and show them the ropes. Which means more costs for the business (time, money, and high risk for low quality production).
  2. “steal” qualified employees from each other.

Even though with the new policy of developing professional schools by the government, the demand for skilled labors is much higher than the actual supply. It will take some years (5-6 more years) to narrow this gap for the professional labors. Not to be surprised, some Albanian companies are looking for skilled labors from Far East Countries to fill their immediate needs for skilled labors.

It is still cheaper. You do not need to pay as much salary for an uneducated worker even though there might be a 20% higher risk in failing the quality control compared to the educated sewer.

What would be your idea to improve the system and to make the employees stay?  

The thing is that a company that hires an uneducated worker, needs to invest money to teach him everything he needs to know. The problem about this is that it is lost money as soon as the worker decides to leave for another workplace. The best approach to retain an employee is not to keep him through a contract saying, “You need to stay for three years after we taught you the profession of a sewer”, because it does not have any consequences when the employee leaves anyway.

I think that one will make the best approach by saying, “We will teach at our cost and we want you to stay loyal and offer you therefore a savings book at our local company. This is how it works: You will earn 5,00 € extra each month in the first year that will go straight to your saving account. The second year will be 8,00 € and the third year will be 10,00 € if you stay. You will get the money after five years if you do not quit.” So, the idea is to pay the workers a bonus for their loyalty additional to their monthly wage.

What about welfare? Can one apply for it if she/he does not have a job?

Yes, there is welfare in Albania but you can only apply for it if you worked for one year and only then you will receive welfare for one year. You can get up to 60,00 € a month per person which does not even cover the living spending.

You said that you want the clothing label to say, “Made in Albania” instead of “Made in Italy”. Why and why does that not work out?

Well, first of all the clothing is made in Albania and not in Italy! The problem is that there is no agreement between the EU and Albania to enter into the European market because of the standards that Albania does not fulfil. The garments get shipped from Italy to Albania, get sewed in Albania and then get shipped back to Italy so the company can sell it all over in Europe. The label says: “Made in Italy” because the main process takes its place there.

However, there are quite many brands which do provide the label “Made in Albania” such as: Caprice, Camper, Ferrari, GF Ferré, Byblos, Laura Biagiotti, Beverly Hills, Gas, Bonavita, Sorbino, Relish, Meltin Pot, Ted Baker, Jack & Jones, Tommy Hilfiger, Angel & Devil, Sixty, La blanche, Plaetor, Cotonella, Essere, Tod’s, etc.