Turkey’s minimum wage erodes by 45 dollars in one week due to exchange rate

When it was announced on June 20, Turkey's minimum wage was 482 dollars (11,402 Turkish Liras). However, due to the increase in the dollar exchange rate in just one week, it has eroded by about 45 dollars and now stands at approximately 437 dollars as of June 26.

Monday June 26 2023 09:58 pm

Duvar English

Turkey’s minimum wage has eroded by approximately 45 dollars in one week without no one getting paid with the raise as it is applicable after July 1.

After the negotiations with the labor unions, the government on June 20 announced that it raised the minimum wage by 34 percent to 11,402 Turkish Liras (TL), equivalent to 482 dollars based on the exchange rate of 23.60 dollar/TL.

The Central Bank on June 22 raised the interest rate by 6.5 points to 15 percent. Nonetheless, the markets did not find this increase sufficient and exchange rates have risen sharply for the past week. As of June 26, the dollar/TL reached a record high of 26.

The new minimum wage is now about 437 dollars according to the latest rates. Accordingly, the minimum wage has eroded by 45 dollars in a week.

Since the current new minimum wage will be valid from July 1, the workers will receive their first salaries with the increase on July 31 at the earliest. This means that workers will lose their purchasing power even more if the government cannot control the exchange rates.

The government-run Turkish Statistical Institute (TÜİK) calculated the annual inflation rate as 39.6% in May after President Erdoğan's move to provide free natural gas for a month as an election pledge. Inflation data for June will be released on July 5.