126 economists warn Turkish gov’t to not raise minimum wage by only expected inflation

Duvar English

A joint statement signed by 126 economists working in universities from Turkey and abroad on Oct. 27 emphasized the negative impacts that the government's planned increase in the minimum wage based on "expected inflation rate" would have on workers' lives.

Turkey’s Central Bank Governor Fatih Karahan stated during a meeting with investors at the annual meetings of the International Monetary Fund (IMF) and the World Bank in the U.S. that a 25 percent increase in the minimum wage would be consistent with "inflation targets." 

Additionally, Alfred Kammer, Director of the IMF European Department, expressed that minimum wage increases in Turkey should be made once a year, adding, "There's a trade-off that the authorities have to make and they're quite aware of it."

Academics stated in their release that the prolonged issue of high inflation in the Turkish economy has made low-income citizens and those working for the minimum wage more economically vulnerable and has significantly lowered their living standards.

Economists noted that the recent monetary and fiscal policies have been shaped in line with the goal of combating inflation. However, they expressed concern that avoiding minimum wage increase in July and the plan to determine the hike for 2025 based on an expected inflation rate of 25 percent instead of the actual inflation would be scientifically and socially alarming.

The Central Bank's latest survey shows that market participants' year-end inflation expectations rose from 43.14% to 44.11% while the inflation only be expected to reach 25% at the end of 2025.

The government and the labor unions will start their negotiations in December for the minimum wage of 2025.