Minimum wage negotiations to begin amidst lira depreciation

Photo: Evrensel

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The Minimum Wage Determination Committee is set to meet on June 13, as announced by Vice President Cevdet Yılmaz, to establish the minimum wage for the second half of the year.

The 15 committee members, including representatives from workers, employers, and the government, will make decisions regarding the minimum wage and other forms of compensation, such as unemployment benefits, disability allowances, and internship allowances.

The height of the minimum wage hinges typically on the yet-to-be-established six-month inflation data. Based on the official inflation rate of 15.26% for the first five months of the year, the minimum wage, currently at 8,500 TL, would increase to 9,800 TL.

This amount would starkly contrast with the promises made by Vedat Bilgin, the Minister of Labor and Social Security, before the May elections. Bilgin pledged in a live broadcast on May 9 to raise the minimum wage to 500 dollars.

"We implemented an adjustment in January that raised it [minimum wage] to highest level in the history of the Republic, to over 455 dollars. We will do the same in July, to approximately 500 dollars," the politician stated.

Record lows

Based on today's exchange rate, this move would entail a boost of around 3,300 TL, bringing the minimum wage to approximately 11,800 TL. However, the lira has been rapidly depreciating against the dollar, reaching new record lows repeatedly in recent weeks and resulting in the current minimum wage being barely 360 dollars. 

Furthermore, Turkey's official inflation rate is often met with skepticism due to the Turkish Statistical Institute (TurkStat) not releasing its inflation basket for the past two years, despite a recent court ruling against the suspension of this data.

According to the unofficial Inflation Research Group (ENAG), the official claims regarding inflation are understated. They suggest that inflation is likely to be at least twice to three times as high. (HA/WM)