At a time when millions of low and middle-income earners in Turkey struggle to survive financially, the country’s finance minister, Mehmet Şimşek, has said the monthly minimum wage in the country is not low but rather is the highest among developing countries.
Şimşek, who spoke on joint program broadcast live on Bloomberg HT-Habertürk Monday morning about the latest economic developments in the country, dismissed criticism about the amount of the monthly minimum wage. He said the minimum wage, 17,002 Turkish lira, has significantly increased in terms of US dollars under the Justice and Development Party (AKP), which has been ruling Turkey as a single party government since 2002.
He said the minimum wage was $524 as of June 2024 and that minimum wage earners will experience real growth in their income this year thanks to the economic recovery.
The minimum wage in Turkey was equal to $126 in 2002 when the AKP came to power and was gradually increased. However, economists say the fact that the minimum wage has increased in US dollars over the years does not mean that people’s purchasing power has also increased.
“You can’t buy the same things you bought with 100 US dollars in 2002 with 100 US dollars now. There’s inflation,” says Özgür Demirtaş, a professor of economy.
Şimşek’s remarks came in the wake of disappointment and frustration among millions of minimum wage earners due to the government’s refusal to make an interim increase in the minimum wage for the second half the year despite expectations.
Labor Minister Vedat Işıkhan announced last week that there would be no interim increase in the minimum wage.
“We’ll meet to determine the new minimum wage in December,” Işıkhan said.
The last time the government adjusted the minimum wage was in December 2023, three months before the March 31 local elections.
At the time the minimum wage was set at 17,002 Turkish lira for 2024, a 49 percent increase from July 2023 and a 100 percent hike from January of the same year.
The minimum wage was equivalent to $578 in December and is now valued at $521.
With no elections taking place until 2028, interim adjustments to the minimum wage and pensions seem to no longer be on the government’s agenda.
Turkey is known for its relatively high percentage of the workforce making the minimum wage. Labor unions estimate that roughly half of all workers earn a wage similar to the minimum wage.
The country also has a significant informal sector, with many people working jobs unofficially.
Demands for an interim minimum wage hike stem from the skyrocketing cost of living in the country where inflation stood at stood at 75.4 percent in May, making it hard for millions of people to pay for their basic needs, pay their bills and rent.
Turkey’s annual inflation was 64.7 percent in December 2023, when the amount of the minimum wage was set the last time.
In a development that casts doubt on Şimşek’s remarks regarding the minimum wage, a labor union study put Turkey’s hunger threshold for June at TL 18,980 ($580), nearly TL 2,000 above the minimum wage of TL 17,002.
According to the study by the Confederation of Turkish Trade Unions (TÜRK-İŞ), the poverty threshold rose to 61,820 lira ($1,890) the same month.
In the study, the hunger threshold is defined as the amount of money that a family of four living in the capital city of Ankara needs to spend for healthy and balanced nourishment, while the poverty line takes into account other expenses such as clothing, housing (rent and utilities), transportation, education and health.