Turkey's most critical problem is unemployment. This was the case in 2002; and this still is the case in 2010. In fact, no fundamental change took place since 2002. The striking issue concerning the discussions on unemployment is the fact that the emphasis is put generally on the unemployment among young people. News featured on the media with the caption "One out of four young citizens of Turkey is unemployed" grabs attention. But this statement is correct and incorrect at the same time. This is exactly what the figures tell us. Unemployment is really prevalent among young people; however the biggest group across the total number of unemployed is constituted by middle-aged people. If you want to learn about the structure of unemployment, please keep reading.

First, let us summarize the facts: Unemployment rate in Turkey have increased. In his column in Radikal daily, Fatih Özatay recently, inspired by analyses on inflation, said unemployment in Turkey "reaches an upper stage". This is a correct finding. Unemployment rate which stood at 7 percent level in the second half of 1990s reached 10 percent after the 2001 crisis and remained there as we insisted on not taking any precautions. Along with the 2008 global crisis, unemployment rate jumped to 14 percent level. And if we continue insisting on not taking any precaution, it will most likely be fixed at this level. So, the first point to state is that unemployment rate has increased. Last week we stated a second point: apart from the increase in the unemployment rate, period of unemployment has also been extended. Over the last three years the number of those unemployed for more than a year was decreasing when compared to the previous year. But this is not the case anymore. In 2009, number of people unemployed for more than a year increased by 150 thousand compared to 2008. We should expect a further increase in this number in 2010. So, this is the second point to keep in mind considering the unemployment issue.

Let us state the third point, which is the focus of today's commentary: as of 2000, almost 50 percent of total number of unemployed is in the 15-24 age group. However, as of 2009, 30 percent of total number of unemployed is in the 15-24 age group. As of 2009, number of unemployed people in the 15-24 age group is 1.1 million, and the number of those over the age 25 is 2.3 million. Therefore, 2.3 million among unemployed people is over the age 25. What does this mean? This means, currently unemployment is a prevalent middle-aged issue. The story is not simply about young people newly entering the business life failing to find a job. The problem is more serious than that. Middle-aged workers are losing their jobs with an ever-increasing rate. We should better state as follows: In Turkey, one out of five people in the 15-19 age group is unemployed; but 65 percent of total number of unemployed is over the age 25.  There are almost one million unemployed people in the 35-54 age group. Unemployment is a middle-age phenomenon in Turkey. Let this be the third point to consider.

So, what is the reason for this? Where does this structure stem from? It stems from two reasons. First is related to the fact that labor force participation rate is lower among young people. Young people prefer not to join the business life. Why? I guess because there is no award system encouraging them to join the labor markets. Wages are not high enough to encourage participating in the labor force. For instance, women can make a bigger contribution to the household income just by staying at home and not working. Please note that those preferring not to participate in the labor force also prefer not to seek a job. Therefore, Turkey first needs a market climate which will incentivize labor force participation for everyone. This can be done by advancing everybody's skills as soon as possible. If this is done, it will be realized that unemployment rate is much higher than the declared 14 percent. Second, middle-aged unemployed population in Turkey expands as the skill set required by the industry changes. People lose their jobs as their skills level do not match up with the technological requirement of the activity they carry out. So, the main reason for middle-age unemployment is the change in the structure of the industrial and services sectors. Shift to automation in industry creates the need for new set of skills and fewer workers.

What do employers look for? As a TEPAV study conducted in 2007 reveals, employers prefer to hire people who have computer literacy and a certain level of sufficiency in English. And these are the exact skills the middle-aged people lack.

Such is life. When I was a kid, cotton fluffers used to visit the neighborhoods in springs. They would ventilate, wash, and then fluff the cotton and the woolen mattresses. This way, mattresses would become softer. Then, the technology changed; now there is no need for cotton fluffers. So, what happened to them? They become middle-aged unemployed. This is exactly what happens today. Those who do not how to surf on the Internet are now unemployed.

There exists a structural problem. Economic recovery will not automatically reduce unemployment rate. So, what should be done? Are cotton fluffers confined to be left out?

Of course not!

This commentary was published in Referans daily on 01.04.2010