Although the Turkish minimum monthly wage was increased by 50 percent for this year to help offset an increased cost of living, it has actually declined when calculated in dollars by as much as $26 compared to 2021, Deutsche Welle Turkish service reported on Friday.
The minimum wage, which is earned by more than 40 percent of all workers in Turkey, according to the country’s Social Security Institution, increased from 2,825 Turkish lira (TL) a month to TL 4,250 in 2022.
The minimum monthly wage of TL 2,825 for 2021 was equivalent to $319 since the lira traded at an average of 8.86 to the dollar last year.
However, the minimum wage as of Jan. 1, 2022 was TL 4,250, roughly $293 when calculated by the average exchange rate of 2022 so far, which is 14.51 lira to the dollar according to the latest data, DW said, pointing to a $26 decline in the minimum wage compared to 2021.
The Turkish lira, which started 2022 trading at 13.4 against the US dollar, weakened to 17.24 to the dollar on Friday, falling 28 percent since the start of the year, after losing nearly 48 percent in value over the past year.
Hikes in the salaries of medical specialists, police officers and teachers in Turkey also disappeared due to the depreciation of the Turkish lira against the US dollar, DW said, adding that specialists currently earn $159, police officers $102 and teachers $77 less than they did last year.
This is despite the fact that specialists’ salary was increased from TL 10,093 ($590) to TL 12,866 ($752) this year, while policemen’s salary saw a rise of TL 2,042 ($119) and increased to TL 9,473 ($554) and teachers’ salaries increased from TL 6,586 ($385) to TL 8,594 ($502) in 2022, according to DW.
Economists point out that the upward trend in the dollar/TL rate will continue in this period, with central banks around the world increasing interest rates. While the salaries are losing value due to the depreciation of the lira against the dollar, they are also adversely affected by increasing inflation, DW said.
Turkey’s inflation climbed to its highest level since 1998, hitting an annual 73.5 percent in May, official data showed last week, while the Inflation Research Group (ENAG), made up of an independent group of Turkish academics and economists, said that inflation actually accelerated by a whopping 160.8 percent, more than twice the official figure.
Over the past several years Turkey has been suffering from a deteriorating economy, with high inflation and unemployment as well as a poor human rights record. President Recep Tayyip Erdoğan is criticized for mishandling the economy, emptying the state’s coffers and establishing one-man rule in the country where dissent is suppressed and opponents are jailed on politically motivated charges.
A staggeringly high cost of living has become the new normal in Turkey, where recent increases in food and utility prices are pushing up inflation, further crippling the purchasing power of citizens.
An increasing number of Turks have complained on social media about rising electricity bills and falling into debt. Many have said even basic foods such as vegetables have become a luxury as prices have risen by nearly 400 percent.
Earlier this week Erdoğan insisted that his government was opposed to higher interest rates even as inflation in the country soars to its highest level in nearly 25 years.
“This government will not hike interest rates. On the contrary, it will reduce them,” Erdoğan said in a televised address after a weekly cabinet meeting.
Contrary to economic orthodoxy, Erdoğan is convinced that high interest rates fuel inflation rather than rein it in.
The Turkish economy has gone into a tailspin since last year when Erdoğan — who is up for re-election next year — put pressure on the central bank to start slashing interest rates.