Erdoğan raises Turkey’s minimum wage for second time in six months
Turkey announced its second minimum wage hike in six months, raising wages by 30 percent to protect households from the rising cost of living.
The increase, which comes after the official annual inflation rate hit a 23-year high of 74 percent in May, boosts net wages earned by about 40 percent of the workforce from TL4,250 to TL5,500 ($254 to $328).
But a 20 percent drop in the lira since early January—when the last hike took effect—means the rise is worth the equivalent of just $9.
President Recep Tayyip Erdoğan, whose refusal to allow the central bank to raise interest rates has led to runaway inflation, said the government will continue to strive to protect the public from the worst excesses of a crisis in China. the cost of living.
“We are taking many measures to compensate for the wealth loss of all our people, especially our workers,” he said on Friday. “We will continue to take them.”
The Turkish leader, who is to make a defiant bid for re-election in a presidential vote due before June 2023, has faced a sharp drop in opinion polls, partly due to severe erosion in living standards.
Analysts warned that the hike in the minimum wage, which will apply to millions of workers in sectors such as construction, hospitality and retail and is expected to knock-on salaries across the board, would itself exacerbate inflation.
Haluk Bürümcekçi, an economist and analyst from Istanbul, said the 30 percent increase is likely to increase inflation by about 6 percentage points over the next six months.
Opposition parties said the increase was not enough to protect households from rising inflation at a time when many believe the true pace of price increases is ahead of data published by the National Statistical Office.
“Salary increases are pointless until Erdoğan stops inflation,” Republican People’s Party (CHP) MP Engin Özkoç wrote on Twitter.
Nazmi Irgat, secretary general of the Türk İş, a confederation of trade unions involved in the raise negotiations, had pushed for an increase in the minimum wage to about TL 6,400 – the amount his organization said was needed to support a family of four over the “hunger and poverty line”.
The Turkish economy has suffered from repeated bouts of currency depreciation and high inflation in recent years as Erdoğan, a lifelong opponent of high borrowing costs, has gained more and more control over the central bank.
The Turkish president, who has ruled Turkey for nearly 20 years, ordered a series of aggressive rate cuts last year as inflation rose. That pushed the lira to record lows, driving up costs in a country that relies on imported materials, especially energy. Inflation has been exacerbated by a rise in global commodity prices as a result of the Russian invasion of Ukraine.
Erdoğan has argued that he is pursuing a “new economic model” and that the country will “get behind inflation” early next year.