Why is the Minimum Wage Rate So High in Turkey?

The rate of workers working for minimum wage in the past few days is at 60% had been claimed. Vedat Bilgin, Minister of Labor and Social Security, made a statement on the subject. 37% of the rate of workers with minimum wage had stated that.

Although the statements of Minister Bilgin are that the minimum wage rate is 37%, According to DİSK data, this rate is around 57%. In other words, there are different discourses and figures on the subject. As a matter of fact, even the number announced by Bilgin is quite high compared to the rate in different countries.

The minimum wage rates of some countries are as follows:

• Netherlands: 3%
• Germany: 5%
• France: 8%
• Ireland: 11%
• Bulgaria: 14%
• Poland: 17%
• Romania: 21%
• The European Union average is 9%.
• In Turkey, it is estimated to be between 37% and 60%.

While the minimum wage rate is 9 percent in the EU, it is around 40 percent in Turkey.

Baskent University Head of International Finance and Banking Department Prof. dr. Senol BabuscuWe asked why the minimum wage rate is so high in Turkey. According to Babuşçu’s answers, the main reason for this situation is that in our country There are not enough job opportunities for the number of people who want to work to be.

When we look at the TUIK 2022 workforce statistics, we can clearly see:

Another reason is “unregistered payments”.

Employers, in order to pay less SSI premium, from time to time, to their employees who receive a salary above the minimum wage. to pay by hand can choose. Employees who appear to be receiving the minimum wage in official records and who receive the remaining part of their salary also cause the minimum wage rate to increase.

On top of that, we are faced with the fact that our purchasing power has decreased.

As you know, we have left behind a difficult year economically. Last announced for 2022 the inflation rate was 64.27%. High inflation rates resulted in two hikes to the minimum wage. In these days when we just entered 2023, the minimum wage was increased once again and became 8,506 TL. Even though the minimum wage increased due to inflation, our purchasing power continued to decline.

As a result, as Şenol Babuşçu stated; When we divide the employees in our country by income class middle-income to low-income group It’s been a big transition. This resulted in a bloated low-income group and a narrow middle- and high-income group.

Compared to Turkey, inflation rates are quite low in many countries, to which we quoted the minimum wage rate at the beginning of our article. For example, only 5% of workers earn minimum wage. In Germany, the average inflation rate in 2022 was 7.9%. Although it may seem like a low figure for us, let us remind you that it is the highest inflation level in Germany in the last 71 years.

We hope that when we come to the end of 2023, inflation rates in our country will decrease, the number of people working with minimum wage and unemployment rates will decrease. Thus, we can see again that there is a balance between the low, middle and high income classes.