Millions of workers have been awaiting the minimum wage talks, and the Family, Labour and Social Services Minister Zehra Zümrüt Selçuk announced that negotiations will begin in December. The Minister emphasized that this year a decision reflecting the consensus of all parties should be reached during the talks.
Minimum Wage Negotiations Begin
The Minister announced that negotiations for the 2021 minimum wage will start in December. In her statements she stressed the need for a decision that includes the agreement of all sides. She pointed out that workers paid at the minimum wage faced serious difficulties during the coronavirus pandemic in 2020, and therefore the minimum wage for the coming year should be set at a level that helps them overcome economic challenges. For this reason she highlighted the importance of reaching a common decision among all parties in the upcoming negotiations.
Negotiations will take place between the ministry, employer representatives and worker trade unions. Unions will first present their proposals, and employer representatives will respond on whether proposed amounts are feasible. If the parties cannot reach an agreement, the ministry together with employer representatives will decide on the minimum wage. The rate of increase will be determined primarily based on this year’s inflation figures.
How Much Will the Minimum Wage Increase?
One of the most anticipated questions is how large the minimum wage increase will be. Current inflation figures are used as the basis for determining the minimum wage. Including the final quarter of 2020 in calculations, an increase in the range of approximately 3% to 5% is expected. A higher increase appears unlikely. The central bank’s recent inflation and expectations surveys pointed to an overall figure near 12%, and when translated into minimum wage adjustments and after accounting for existing levels, the effective increase is estimated to fall around 3–5%.
If the minimum wage is raised by that rate, workers earning the minimum wage will continue to receive salaries based on the amount set for 2021. Experts warn, however, that such an increase may not provide sufficient real income gains. Due to the coronavirus and exchange rate volatility, prices of many goods and services have already risen. As in previous years, a rise in the minimum wage will likely coincide with price increases at the start of the year, which will erode the purchasing power of the wage increase and limit its ability to raise living standards for minimum-wage earners.
Where Does Turkey Rank in Minimum Wage Levels?
Among the 25 countries with the highest minimum wages, Turkey currently ranks 23rd. Although the nominal minimum wage has risen in recent years, it is important to consider the context of that increase. By structure, the minimum wage tends to rise each year, so simply comparing nominal figures from previous years can be misleading because purchasing power has simultaneously weakened. For example, an item that once cost 5 lira may now be sold for 15 lira, so focusing only on the nominal wage increase gives an incomplete picture. If inflation is not brought under control, minimum wage increases lose much of their significance: wage hikes effectively compensate for inflation but are then diminished by continuing price increases. Workers and unions have highlighted alternatives for determining minimum wage adjustments—such as moving away from only annual revisions or basing increases on different indices—and many propose conducting reviews every six months rather than annually to better protect purchasing power.