Kosovar Stability Initiative-IKS, upon the request of KES (Social Economic Council), in 2016 has conducted a study on the methods and practices to determine the minimum wage, to assist the internal debate at KES on potential advantages and challenges for a salary increase decision. The study suggests that some of the criteria that should be included in determining the minimum wage, are: the economic development trend, the unemployment rate, the reference to the consumer basket and the average wage. But the average salary is currently extracted from ATK (Tax Administration of Kosovo) data which only records salaries from the formal sector. Given that informality in Kosovo is between 34 and 37 percent, there is a risk that data from ATK will produce incorrect results.
Our report recommends that salary calculation data should be taken from the Labor Force Survey when the methodology of this survey changes to record the pay as a constant variable. Because the entire process of agreeing on the minimum wage was not very inclusive, it is not clear how much the recommendations from the report requested by KES were taken into account.