Large drop in labor participation in the presidential system
TURKSTAT has announced the Standalone Annual Gross Domestic Product (GDP) data for 2022. The decline in labor’s share of national income was also reflected in the standalone GDP data.
The stand-alone annual gross domestic product (GDP), which is calculated independently of seasonal GDP projections, increased 5.5 percent in 2022 compared to the previous year, using the chained volume index.
However, labor’s share of this growth continued to decline in 2022, as it has in the past five years.
When analyzing the share of payments made to the labor force in current gross value added, a dramatic change in the share of labor and capital is observed.
DECREASE IN LABOR PARTICIPATION
Although the proportion of payments made to the labor force was 33.5 percent in 2018, this rate increased to 26.3 percent in 2022. Thus, the proportion of labor payments has decreased by 7.2 points since the regime presidential. While labor’s share of national income was 30 percent in 2021, this rate decreased to 26.3 percent in 2022.
The annual drop in the share of payments made to the labor force was 3.7 points in 2022. When the data is examined, labor’s share of national income was 33.5 percent in 2018, up from 34.7 percent in 2019, 32.9 percent in 2020 and 30 percent in 2021.
INCREASED EQUITY PARTICIPATION
On the other hand, the ‘net operating surplus/mixed income’ ratio, which is the ratio of capital coming from national income, increased from 52.3 percent in 2021 to 53.7 percent in 2022. This ratio was 19 .5 percent in 2018, 47.4 percent in 2019, 49.3 percent in 2020, and 50.3 percent in 2021.
Although the labor share increased again in 2019 after the 2018 currency crisis, the distributional shock that began with the coronavirus pandemic in 2020 accelerated with the 2021 currency crisis. This trend continued in 2022.
HOW IS THE LABOR AND CAPITAL SHARE CALCULATED?
When calculating the Gross Domestic Product (GDP), the distribution of income obtained as a result of production is calculated into 3 important components. These are total labor payments, consumption of fixed capital, and net operating surplus.
The share of wage earners and capital owners in national income is reflected in labor payments and net business surplus. While labor payments are calculated based on the income earned by workers, the net operating surplus defines the part that remains for the company, the shareholder.