Double trap in the increase in the minimum wage

While millions of employees focus on increasing the minimum wage, government statements increase concern.

After Minister of Treasury and Finance Mehmet Şimşek, in his statements in September and October, pointed to high salary increases as a reason for high inflation and said that salaries should be increased according to expected inflation, not the past inflation, yesterday, the Minister of Labor and Social Security, Vedat Işıkhan, received attention and a convincing statement came.

When asked by journalists yesterday after the cabinet meeting about the minimum wage, Işıkhan said: “As in July, the principle is not to be overwhelmed by inflation. As you know, the minimum wage was always once a year. “We’re still working on a single increase.” he replied he.

Işıkhan reminded that negotiations on the minimum wage will begin in December and said:

“Last July was extra. This happened when it was necessary, with the foresight of our President. But if the need arises, we can come together. Let’s hope that next year inflation will go down. We will not hold a second meeting in July, we believe that a second increase will not be necessary. Because all the parameters are going well.”

Statements also come from the business world demanding that expected inflation be taken into account in salary increases. In his statement two weeks ago, Istanbul Chamber of Commerce (ITO) President Şekib Avdagiç requested an increase in the minimum wage in line with the inflation target of the Medium Term Program.

HOW MUCH IS THE EXPECTED INFLATION?

The Central Bank (CBRT) announced that the inflation expectation is 65 percent by the end of 2023 and 36 percent by the end of 2024. The PMP also included an inflation expectation of 65 percent by the end of 2023 and 33 percent by the end of 2024.

CBRT expectations are that headline inflation will peak at 75 percent in May 2024 and cumulative inflation will be about 24 percent in the first six months of the year.

Unless there is an interim increase in mid-2024, there will be a serious loss in the purchasing power of my minimum wage.

‘IT IS NOT POSSIBLE TO ACCEPT’

Labor economics professor Aziz Çelik evaluated the discussions on the minimum wage on sozcu.com.tr.

Stating that no one can accept an increase in the minimum wage in line with expected inflation, that this is a trap and that the unions will not accept such an offer, Çelik said that these statements can be made to reduce the minimum wage. workers’ expectations of a raise.

Çelik noted that 30 percent of the 34 percent increase in the minimum wage in July was eliminated with four-month inflation and emphasized that it would not be possible to take into account the expected inflation of the minimum wage when increasing the pensions of retirees and civil servants according to past inflation.

Çelik said that a regulation should be made on the minimum wage that takes into account past inflation, economic growth and living conditions, and also pointed out that official inflation does not fully reflect the loss of wages.

Stating that the government made the provisional increase in 2022 and 2023 taking into account the elections, Çelik stated that after the May elections, the government tightened its belt in accordance with expectations and that austerity measures are likely to be adopted after the local elections in March.

‘THE MINISTRY GAVE WRONG INFORMATION’

Stating that Minister Işıkhan’s “one-time increase” statement contained incorrect information and helped workers, Çelik said that according to the law, there is no obligation to determine the minimum wage once a year and that, except for the increases intermediates in the last two years, before 2016, the increases would be every six months, he recalled that there were also years in which it was determined in this way.

Çelik also stated that the unions could demand a larger increase following Işıkhan’s statement.

Çelik stated that according to Türk-İş, the poverty line for a family of four was 44,573 TL in October and that the figure increases every month, and suggested that at least two minimum wages should be equivalent to the poverty line.