Middle class is disappearing
This article has been taken from mahfiegilmez.com
TÜİK (Turkish Statistical Institute) has announced the results of the Income and Living Conditions Survey for the year 2023, which is based on the previous calendar year, 2022. I am presenting these results in the tables below for comparative purposes with the 2021 results (The data in the tables are compiled by me based on the information from TÜİK's Income Distribution Statistics 2023 and 2022 Press Releases, as well as TÜİK's GDP and population data):
| 2022 | Income ratio | GDP (US dollars) | Population | Per capita income | Rate of increase compared to 2021 |
| Lowest 20% | 0.059 | 53,454,000,000 | 17,055,911 | 3,134 | 9.6% |
| Next 20% | 0.098 | 88,788,000,000 | 17,055,911 | 5,206 | 5.0% |
| Next 20% | 0.140 | 126,840,000,000 | 17,055,911 | 7,437 | 6.2% |
| Next 20% | 0.205 | 185,730,000,000 | 17,055,911 | 10,889 | 10.3% |
| Highest 20% | 0.498 | 451.188,000,000 | 17,055,911 | 26,453 | 11.7% |
| Total | 1.000 | 906,000,000,000 | 10,624 | 11.5% | |
| Gini coefficient | 0.433 | ||||
| P80/P20 ratio | 8.44 | ||||
| 2021 | |||||
| Lowest 20% | 0.060 | 48,420,000 | 16,936,055 | 2,859 | |
| Next 20% | 0.104 | 83,928,000,000 | 16,936,055 | 4,956 | |
| Next 20% | 0.147 | 118,629,000,000 | 16,936,055 | 7,005 | |
| Next 20% | 0.209 | 168,663,000,000 | 16,936,055 | 9,959 | |
| Highest 20% | 0.480 | 387.360,000,000 | 16,936,055 | 22,872 | |
| Total | 1.000 | 807,000,000,000 | 9,530 | ||
| Gini coefficient | 0.415 | ||||
| P80/P20 ratio | 8.00 |
We have two measures to assess the equality/inequality of personal income distribution: The first is the Gini coefficient, which ranges between zero and one, indicating that as it approaches zero, equality increases, and as it approaches one, inequality increases.
According to the tables, the Gini coefficient, which was 0.415 in 2021, has risen to 0.433 in 2022. Accordingly, income distribution has deteriorated in 2022 compared to 2021.
The second is the P80/P20 ratio, which shows the difference between the income obtained by the top 20% of the population with the highest share of income and the income obtained by the bottom 20% of the population with the lowest share of income. The P80/P20 ratio has increased even more in 2022 compared to 2021 (the difference has increased from 8 times to 8.44 times). In other words, the gap between those with the highest income and those with the lowest income seems to have widened.
The last column of the table above is dedicated to comparing the two years. While there are increases in the incomes of all income groups in 2022 compared to 2021, the most significant increase seems to have occurred in the highest-income group (15.7%).
To take a closer look at how the GDP is distributed, we need to refer to the table below:
| Share of GDP | 2021 | 2022 | 2023 |
| Highest 20% | 45.9 | 47.6 | 49.7 |
| Remaining 80% | 54.1 | 52.4 | 50.3 |
| Total | 100.0 | 100.0 | 100.0 |
Accordingly, the top 20% of the population with the highest income takes 49.7% of the country's total income (GDP), while the remaining population (80% of the total population) takes 50.3% of the total income. This distribution deteriorates from year to year, and the wealthiest segment is becoming increasingly richer.
The primary reason for this deterioration in income distribution is the interest rate reduction policy implemented from September 2021 until mid-2023. This policy, which caused a significant jump in inflation, disrupted income distribution.
We anticipate that this deterioration continued in 2023. This substantial deterioration in income distribution aligns with the phenomenon we observe in society, where the middle class is gradually disappearing. The income increases in the second and third income groups, which could be considered as part of the middle class, are significantly below the average, confirming our observation. (ME/HA/PE)