The minimum wage was set in December. By excluding earnings up to the minimum wage, the gross minimum wage was increased by 40%, while the increase in the net minimum wage was 50%. The gross minimum wage increased from 3577 TL to 5004 TL, and the net minimum wage increased from 2826 TL to 4253 TL.
The table in December, when the minimum wage was determined, was as follows:
The annual inflation between November 2020 and November 2021, announced by the Turkish Statistical Institute (TUIK), is 21.31%.
Inflation assumption for 2022 in the medium-term programme: 9.8%
Central Bank inflation forecast for 2022: 7.8%.
While the minimum wage was determined in December, it was also taken into account that inflation would rise slightly in the first months of 2022. However, the realization of inflation has upended expectations.
Before the ink on the new minimum wage dried, annual inflation hit 36.08% in December, 48.69% in January and 54.44% in February. This rate represents the highest annual inflation recorded since 2001.
QUARTERLY FOOD INFLATION EXCEEDS 39 PER CENT
Based on November, the Consumer Price Index (CPI) rose 32.35% over the 3-month period covering December, January and February. When we look at the index of the main groups of expenses that make up the sub-items of the CPI, we see that the greatest increase is in food and transport expenses, which affect citizens the most. The increase over the said three-month period was 39.45% in food and non-alcoholic beverages, 49.34% in transport and 26.19% in accommodation.
March inflation will be announced on Monday. The monthly increase should be between 9 and 10%. In this case, the total increase in the CPI will reach 45% in the 4-month period following the date on which the minimum wage is determined.
|What happened to inflation in 3 months?|
|November Index Value||February index value||Switch (%)|
|Food and non-alcoholic beverages||753.88||1051.29||39.45|
|Alcoholic beverages and tobacco||941.45||1281.95||36.17|
|Clothes and shoes||296.01||317.97||7.42|
|entertainment and culture||362.97||446.78||23.09|
|Restaurants and hotels||945.62||1177.29||24.50|
|Miscellaneous goods and services||878.92||1145.22||30.30|
HUNGRY LIMIT INCREASEED TO 4.928 TL
According to the Hunger and Poverty Line Survey published by TÜRK-İŞ for 35 years, the hunger limit for a family of four increased from 4,013.26 TL in December to 4,928.08 TL in March . During the same period, the poverty line went from 13 thousand 72 TL to 16 thousand 52 TL. In March, the monthly cost of living for a single employee was calculated at 6,000,474 TL.
THE DISCUSSION HAS STARTED
The extraordinary increase in inflation has led to talk of raising the minimum wage in July. Cahit Özkan, vice-president of the AK party group, was the first to voice the problem within the ruling wing. Nihat Zeybekci, a member of the Presidential Economic Policy Committee, followed suit.
TÜRK-İŞ Chairman Ergün Atalay said: “Can those who govern the country change the law? they do. If they invite us to this table in June, we will gladly sit down. If they don’t call, we’ll put our losses on the table in December (at the meeting), everything that’s been lost since January. We won’t sign the issue without it,” he said.
President Recep Tayyip Erdoğan, back from Brussels, answered journalists’ questions on the subject, leaving the door open for a further rise in the minimum wage. “We are now in the third month. When we get to the middle of the year, my Minister of Labor and Social Security informs me of the current situation. In fact, Vedat Bey has exchanged heartfelt views with unions so far. Following the negotiations that will take place, when such an evaluation is required in the middle of the year, we will certainly not refuse such a thing to our fellow citizens, especially our workers. The hand that gives is better than the hand that takes. »
ARE THERE ANY LEGAL OBSTACLES?
In order to increase the minimum wage in July, the Ministry of Labor and Social Security must convene a meeting of the members of the Minimum Wage Determination Commission in June. Within the commission, where workers, employers and the government are represented by 5 people, decisions are taken by majority vote.
Expert in labor law and social security Prof. Dr. Ufuk Aydın said that there is no legal impediment for the commission to meet in June and determine the new minimum wage without the need for changes to the law and regulations in vigor. While assessing discussions on whether the commission’s determination of the new minimum wage to be implemented between January 1 and December 31, 2022 at its meeting held in December, will pose an obstacle to determining the new wage minimum during the year, said Aydın, “Administrative law has a rule. The authority making the transaction can modify this transaction. The Commission has taken this decision. But economic conditions have changed. He can make a new decision based on the new conditions. Employers can make reservations and decisions can be taken by majority vote.
WHAT IS THE DIFFERENCE WITH THE MINIMUM WAGE COMPARED TO PREVIOUS INCREASES MADE DURING THE YEAR?
The minimum wage was increased twice a year, in January and July, until 2015. While the minimum wage was increased by 30% in 2016, the annual minimum wage was implemented. Since then, the minimum wage has been determined annually.
However, the minimum wage increases that took effect in January and July were determined at a single meeting held in December. The inflation recorded during the year was assessed at the only meeting held in December.
If the minimum wage is increased in July this year, the Minimum Wage Determination Commission will meet for the first time in June.
WILL THE EMPLOYER BE SUPPORTED?
From 2015, when the increase in the minimum wage was kept at a high level, until 2021, minimum wage support was granted to the employer by the Treasury. Last year the support was 75 TL per month per worker. While the minimum wage applied in 2022 was determined, the request for Treasury assistance ended when earnings up to the minimum wage were excluded from tax.
If a minimum wage increase is on the agenda in July, the employer may again apply for minimum wage assistance. The employer can request that part of the cost increase be borne by the Treasury.
WILL THERE BE ADDITIONAL INCREASES FOR PENSIONS?
With the collective agreement signed in August, it was decided to increase the salaries of civil servants by 5% in January 2021 and to increase the inflation gap in the second half of 2021. However, due to the high inflation in December , the increase in the collective agreement, which was 5%, was increased to 7.5% by decision of the president. Thus, in January, the salaries of civil servants and the pensions of retired civil servants were increased by 30.95%.
SSK and BAĞ-KUR pensions increase only at the rate of inflation. In January, there was a 25.47% increase in SSK and BAĞ-KUR pensions.
In unionized workplaces, wages are usually determined by a collective agreement reached every two years. An increase in the share of social protection is obtained during the first 6 months of collective agreements, and increases for the following 6 months are indexed to inflation.
Discussions of raising the minimum wage due to rapidly rising inflation have raised hopes of further increases for other workers, civil servants and retirees, who work with salaries above the minimum wage.