Experts doubtful Turkey’s new minimum wage will ‘make people smile’
Turkey is the country with the highest proportion of its workforce receiving the minimum wage in Europe. As minimum wage negotiations happen this week, we asked experts their expectations. Most experts expect an increase of around 15 percent, only slightly more than the official inflation rate. However, according to economist Taylan Büyükşahin, anything less than a 20 percent increase in wages is unlikely to satisfy workers who struggle with the pandemic and economic hardship.
K. Murat Yıldız / Duvar English
As minimum wage negotiations happen this week, there is a lot of speculation as to what the new increase will be, and whether it will be sufficient.
The number of people in Turkey trying to survive on the current minimum wage of 2,324 liras (297 USD) a month after taxes is around 10 million, according to data from the Confederation of Progressive Trade Unions of Turkey (DİSK).
However, the minimum wage level also impacts Turkey’s remaining 73 million citizens as it sets the standard for wages in general as well as retirement pensions.
According to the Turkish Statistical Institute (TÜİK), around 30 million people are employed in Turkey. Based on this data, one out of every three employed persons in the country earns the minimum wage.
However, Eurostat data shows increased numbers, with nearly half of Turkey’s workforce being paid the minimum wage, compared to 1 percent in Spain, 5 percent in the UK, and 8 percent in France.
This makes Turkey the country with the highest proportion of its workforce receiving the minimum wage in Europe.
The current practice of setting the minimum wage in Turkey dates back to 1951 and is based on Article 55 of the constitution, which states: “The state shall take the necessary measures to ensure that workers earn a fair wage commensurate with the work they perform and that they enjoy other social benefits.”
Article 55 also notes that, “In determining the minimum wage, the living conditions of the workers and the economic situation of the country shall also be taken into account.”
The 15-member Minimum Wage Determination Commission consists of five representatives each from the government, the Confederation of Employer Associations of Turkey (TİSK), and the Confederation of Turkish Trade Union (Türk-İş).
In principle, the commission meets four times before it announces its decision. After negotiations, a vote takes place with at least 10 members present. If a tie occurs, the head of the commission determines the outcome.
Türk-İş Chairman Ergün Atalay has said that they are hoping the government and employers will agree on an amount that “makes workers smile.”
However, experts, such as economist Taylan Büyükşahin, doubt that this will happen.
“Given the economic conditions of the country and when we look back at earlier decisions made by the commission, I expect an increase of around 15 percent, only slightly more than the official inflation rate,” Büyükşahin told Duvar English.
In explaining why many may consider this increase insufficient he said, “The inflation rate might be 14 percent, but what matters for the people is ‘food inflation’ which stands at around 20 percent. This is the minimum expectation of most people.”
Büyükşahin also believes that because of the current state of the Turkish economy and the ongoing pandemic restrictions, anything less than a substantial increase in wages is unlikely to satisfy workers.
“Given the lira’s losses against the dollar, some expect a 40 percent increase. Aside from existing economic hardships, the conditions of the pandemic have made life much harder for workers and I don’t think another increase in the rate of inflation will make the people ‘smile.’”