Home News Erdoğan raises Turkey’s minimum wage for second time in six months

Erdoğan raises Turkey’s minimum wage for second time in six months


Turkey announced its second increase in the minimum wage in six months, raising pay by 30 per cent in a bid to cushion households from soaring living costs.

The increase, which comes after the official annual rate of inflation reached a 23-year high of 74 per cent in May, lifts the take-home pay earned by around 40 per cent of the workforce from TL4,250 to TL5,500 ($254 to $328). 

But a 20 per cent plunge in the lira since the start of January — when the last increase came into force — means that the rise amounts to the equivalent of just $9.

President Recep Tayyip Erdoğan, whose refusal to allow the central bank to raise interest rates has fuelled runaway inflation, said the government would continue to strive to protect the public from the worst excesses of a cost of living crisis.

“We are taking many measures to compensate for the loss of prosperity of all our people, especially our workers,” he said on Friday. “We will continue to take them.”

The Turkish leader, who faces a challenging bid for re-election in a presidential vote that must be held before June 2023, has suffered a steep decline in opinion polls, partly as a result of the sharp erosion in living standards.

Analysts warned that the rise in the minimum wage, which applies to millions of workers in sectors including construction, hospitality and retail and is expected to have a knock-on effect on salaries across the board, would itself exacerbate inflation.

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Haluk Bürümcekçi, an Istanbul-based economist and analyst, said the 30 per cent increase was likely to add around 6 percentage points to the rate of inflation over the next six months.

Opposition parties said the rise was insufficient to protect households from soaring inflation at a time when many believe that the real rate of price rises is higher than the data published by the national statistical institute.

“Salary increases are no use until Erdoğan puts a halt to inflation,” Engin Özkoç, a member of parliament with the Republican People’s party (CHP), wrote on Twitter.

Nazmi Irgat, secretary-general of the Türk İş, a confederation of trade unions that was involved in negotiations for the increase, had pushed for a rise in the minimum wage to around TL6,400 — the amount his organisation said was needed to lift a family of four over the “hunger and poverty threshold”.

The Turkish economy has suffered from repeated bouts of currency depreciation and high inflation in recent years as Erdoğan, a life-long opponent of high borrowing costs, has asserted more and more control over the central bank.

The Turkish president, who has ruled Turkey for almost 20 years, last year ordered a series of aggressive interest rate cuts even as inflation was rising. That caused the lira to plunge to a record low, pushing up costs in a country that is dependent on imported materials, especially energy. Inflation has been compounded by a surge in global commodity prices caused by Russia’s invasion of Ukraine.

Erdoğan has argued that he is pursuing a “new economic model” and that the country will “leave inflation behind it” at the start of next year.


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