Turkey's wage issue: Why do we talk about the minimum wage so much? Evaluation Note/ H. Ekrem Cunedioğlu

At least one month every year, minimum wage negotiations are the main topic of the economic agenda. While the Minimum Wage Determination Commission met only once a year in the 2016-2021 period, it has started to meet twice a year for the last two years due to high rate of inflation. The rapid convergence of the minimum wage to the average wage and the fact that it has become the indicator that determines the standard of living of millions of laborers, and the fact that the minimum wage is below the hunger limit announced by Confederation of Turkish Trade Unions (TÜRK-İŞ) are frequently addressed by representatives of the labor sector. On the other hand, employer representatives accept the convergence of the minimum wage to the average wage and accordingly argue that high minimum wage increases will drag Turkey down in terms of competitiveness, investment attractiveness and boost informal employment. Apart from all these debates, the fact that Turkey is discussing the minimum wage so intensely can be regarded as one of the signs that the country is unable to move out of being a mediocre economy or that it is stuck in the middle income trap. The government needs to be aware of the causes and possible effects of the increasing intensity of the minimum wage and the increasing convergence of the average wage to the minimum wage in order to get the country out of the middle income trap.

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