Minimum wage negotiations in Turkey: A brief overview

* Photo: Pexels

Chaired by Minister of Family, Labor and Social Services Zehra Zümrüt Selçuk, Turkey's Minimum Wage Determination Commission began the minimum wage talks for 2021 on December 4, 2020.

Unlike the previous years, this year's negotiations are held via video conference due to the novel coronavirus (COVID-19) outbreak. Since its first meeting earlier this month, the commission has convened twice so far and the third meeting is scheduled for tomorrow (December 22).

Ahead of this meeting, we have compiled some basic information as to the current minimum wage in Turkey and how it has changed over the years, the ongoing procedure for determining the minimum wage as well as the demands of labor unions and opposition parties, especially amid the increasing economic hardships brought about by the pandemic.

Over 600 liras deducted from gross wage

The International Labor Organization (ILO), a tripartite United Nations (UN) agency bringing together the governments, employers and workers of 187 countries, defines the minimum wage as "the minimum amount of remuneration that an employer is required to pay wage earners for the work performed during a given period, which cannot be reduced by collective agreement or an individual contract."

According to the estimations of the Confederation of Progressive Trade Unions of Turkey (DİSK), 10 million people in the 83-million country get a minimum wage or earn a monthly salary close to this amount.

The current net minimum wage in Turkey is 2,324.71 Turkish Lira (TRY), which is approximately 303 US dollars or 240 Euro. 

The gross minimum wage, on the other hand, is 2,943 TRY, which is some 600 liras higher than the net wage earned by workers in a month.

When this gap is examined in detail, it is seen that the following deductions made from the gross minimum wage lead to this difference: 

412.02 TRY (14 percent) is deducted for social security premium; 29.43 TRY (1 percent) for the unemployment insurance fund; 375 TRY (15 percent) for the income tax; and 22.34 TRY (7.59 percent) for the stamp duty.

In other words, taken together with the minimum living allowance, a total of 618.29 TRY is cut from the minimum wage of a worker in a month.

How has it changed over the years?

Following the minimum wage talks last year, the minimum wage was increased by 15.03 percent, which was 3 points higher than the official inflation rate announced by the Turkish Statistical Institute (TurkStat).

Accordingly, with this pay rise, the minimum wage was increased from 2,020.90 TRY to 2,234.70 TRY for an unmarried worker.

As for the net minimum wages in Turkey in the previous years, it was 1,603 TRY in 2018, 1,404 TRY in 2017 and 1,300 TRY in 2016. While the net minimum wage was 949 TRY as of January 2015, it was increased to 1,000 TRY as of July 2015. While the net minimum wage was 773 TRY and 803 TRY as of January and July 2013 respectively, it was then increased to 846 TRY as of January 2014 and to 891 TRY as of July 2014.

However, at this point, the simultaneous changes in the foreign exchange rates over the years might give us a better idea of how the purchasing power of minimum wage earners might have changed in this period.

That is, according to the data of the Central Bank, the average exchange rates of US dollar and Euro against Turkish Lira were 1,90 TRY and 2,52 TRY in 2013 respectively. However, as of 11.23 a.m. on December 20, 2020, 1 US dollar was 7,62 TRY and 1 Euro was 9,35 TRY.

In other words, as reported by daily Cumhuriyet, while the net minimum wage was 451 US dollars in 2013, it is now 389 dollars in 2020.

Within this context, a recent study conducted by the Confederation of Turkish Trade Unions (TÜRK-İŞ) has also shown that in order for a four-member family to have a healthy, balanced and sufficient diet (which shows the starvation line), it must spend at least 2,516 Turkish Lira a month, which is higher than the current net minimum wage.

As for the poverty line, which also includes the money spent for clothing, housing (rent, electricity, water, heating), transportation, education, health and similar needs, it has been calculated as 8,197 TRY.

In other words, considering that the minimum wage is 2,324 TRY in Turkey, these figures show that the poverty line has hit 3.5 times the minimum wage.

Organization of the Minimum Wage Commission

As mentioned above, the pay rise to be made in the minimum wage next year is decided by the Minimum Wage Determination Commission headed by the Minister of Family, Labor and Social Services.

The commission consists of 15 members: Five members are appointed to represent the government, five people by the Turkish Confederation of Employer Associations (TİSK) and five people by the TÜRK-İŞ, the largest labor confederation of the country, to represent the workers.

While the majority of votes of these 15 members is enough in determining the minimum wage, the first meeting is held at the Ministry, the second and third meetings are hosted by the representatives of employers and workers respectively and the fourth and last meeting is again held at the Ministry. 

In the event of a tie in the final vote, the vote of the commission chair determines the new minimum wage.

1st meeting: 'Workers have no more staying power'

Within this framework, the commission had this year's first meeting on December 4, 2020. Ahead of this meeting, the TÜRK-İŞ, which represents the workers, announced that though the DİSK and HAK-İŞ would not attend the meetings, it was working in collaboration with both confederations.

Taking the floor after the opening speech of Minister of Family, Labor and Social Services Zehra Zümrüt Selçuk in the first meeting, TÜRK-İŞ General Secretary of Education Nazmi Irgat referred to the minimum wage as an "unjust practice" and underlined that there was a need for a fairer tax regulation for all employees, especially for the minimum wage earners.

Raising concerns over the increasing economic hardships, especially amid the pandemic, Nazmi Irgat briefly said:

"Millions of wage workers, out of desperation, and minimum wage earners, risking their lives to not lose their jobs, are waiting in hope. We expect our commission to make an evaluation by taking these difficulties into account.

"If we are talking about a sacrifice, this sacrifice needs to be made by those increasing their wealth amid this economic crisis. Workers have no more staying power to make any more sacrifices. 

"Those who are in a position to make sacrifices must do so. This morning, we made a joint statement as three labor confederations. We expressed our demand for a minimum wage that ensures a humane life.

"Hear this voice. Meet our demands. Don't put forward economic reasons. What we are talking about here is the minimum wage. No one should expect a cut-back from the minimum wage."

Addressing the commission on behalf of employers after Irgat, TİSK Secretary General Akansel Koç indicated that "the economic situation in the country and its effects on businesses had to be taken into consideration in determining the minimum wage."

Koç also said that they, as employers' representative, had some requests from both the Minimum Wage Commission and the government. Listing these requests, Koç demanded that the minimum wage support which had been in effect for five years in the country continue in 2021 as well.

2nd meeting hosted by employers' representative

* Photo: TÜRK-İŞ

The second online meeting of the Minimum Wage Determination Commission was hosted by the TİSK on December 15, 2020.

The meeting was attended by TÜRK-İŞ General Secretary of Education Nazmi Irgat, TİSK Secretary General Akansel Koç, Director General of Labor Nurcan Önder and other commission members.

During the two-hour closed-door meeting, TİSK Secretary General Koç shared the opinions and demands of employers with other members. Representatives from the Ministry of Treasury and Finance and Ministry of Trade also shared their economic data and reports with the commission.

While the Ministry of Treasury and Finance drew attention to the situation in terms of global competition, the Ministry of Trade talked about the developments in foreign trade through statistics and reports. Representatives from the TurkStat, the state agency commissioned with producing official statistics on the country, also made a presentation.

Releasing a written statement after the meeting, TİSK Secretary General Koç referred to the hardships posed by the pandemic and said:

"It has become all the more important to determine a balanced minimum wage in order to protect employment, ensure additional employment, create a new investment environment and reduce the pressure on the sectors that have been having hardships due to the outbreak."

"What is essential for us is to grow together with our employees," noted the statement of the employer's representative.

DİSK: Minimum wage must be 3,800 TRY

* Photo: DİSK

The third meeting of the Minimum Wage Determination Commission will be hosted by the TÜRK-İŞ confederation on December 22. While the TÜRK-İŞ, officially representing workers in the commission, has not yet expressed an exact number as to the pay rise to be made in the minimum wage, the Confederation of Progressive Trade Unions of Turkey (DİSK) held a press conference on December 7 and shared its demands with the public.

Addressing the reporters at the meeting, DİSK Chair Arzu Çerkezoğlu stated that the net minimum wage must be determined as 3,800 TRY (approx. 500 USD) and emphasized that no taxes must be deducted from the minimum wage, which is a demand raised by all labor confederations.

Noting that the minimum wage talks for 2021 began amid the economic crisis and the grave social and economic destruction brought about by the pandemic, Çerkezoğlu stressed that the crisis and the outbreak reduced the purchasing power of the working class.

"We have been impoverished," protested Çerkezoğlu, reiterating that it was of vital importance to increase the minimum wage to a level where workers could lead a humane life in the face of impoverishment caused by the COVID-19 outbreak and economic crisis.

Çerkezoğlu listed DİSK's requests briefly as follows:

• The minimum wage must be calculated differently during the outbreak. The gross minimum wage must be paid as the net minimum wage.
• In determining the minimum wage for 2021, the new burdens imposed by the COVID-19 outbreak must be taken into account.
• Funding must be provided from the budget to support minimum wage.
• Minimum wage must be entirely exempt from taxation; no taxes must be deducted from all wage earners' wages equal to minimum wage.
• The social security premiums of minimum wage earners must be paid from the budget during the outbreak.
• In calculating the minimum wage, not only workers, but their families must also be taken into consideration.
• In determining the minimum wage, the standards of living and the increase in the national income must be taken into account.
• A common minimum wage must be set for all workers and civil servants.
• The net minimum wage must be 3,800 TRY in 2021.

What does the opposition say?

Amid these ongoing talks and statements, the opposition parties have also expressed their demands concerning the minimum wage.

In a statement released by the main opposition Republican People's Party (CHP) earlier in December, it has been indicated that the net minimum wage in the country must be at least 3,100 TRY, which is some 700 TRY higher than the current minimum wage.

As for the İYİ Party, which is in the Nation's Alliance with the CHP, its Chair Meral Akşener has said that the gross minimum wage, which is currently 2,943 TRY, must be increased to 3,000 TRY and this amount must be paid as the net wage without making any deductions.

The Peoples' Democratic Party (HDP) also expressed its demands as to the minimum wage ahead of the talks on December 3.

In a press conference headed by HDP Labor Commission's Vice Co-Chair Şaziye Köse in the HDP İstanbul office, it has been underlined that the net minimum wage must be at least 4,000 TRY in Turkey.

'It is how we live, if we can call it a life'

Before concluding this brief overview of the minimum wage talks for 2021, we should perhaps once again lend an ear to what a minimum wage earner told bianet about his living situation earlier this month.

CLICK - 'Sometimes, we also get surprised at how we live'

Samet Barsan, a 29-year-old forklift driver of a warehouse in Kocaeli province, said briefly the following to bianet:

"If you ask me what was the last time when I made time for myself and did something for fun, believe me, I cannot remember it. Buying books, going to the cinema... We cannot do any of this anyway. I really cannot remember what was the last time when I went to a cinema. We do not have a social activity. As for a vacation, we cannot even dream of it.

"This is how all minimum wage earners live, if we can call it a life, of course. We are just getting by. We want the state to stand with the worker. Especially in such a period as this when low-income groups have been affected by the pandemic... But it does not. The company applied for a short time working allowance at the onset of the pandemic, it indeed received it. But we were made to work for normal working hours. The company made profit through us in an illegal way. As for us, we risked our health.

"The questions in people's minds are these: Will they exempt us from the tax? Will they give us a rise that will not drop below the starvation line in just the second month? These are the questions in people's minds." (SD)