By Justin Mays:
Turkey President, Recep Tayyip Erdogan, announced the minimum wage increment for 2022 by 50%. The increase of wages was fueled by price hikes and exchange rate inconsistency in the country.
On Thursday, 16 December President Erdogan announced on a televised address in Ankara that the wage increment will become effective on the 1st of January 2022. The minimum wage which was TL 2,826 ($186) will be increased to TL 4,250 ($275.4). He also highlighted that this is the highest rise in the last 50 years.
"There are some problems right now, and we will overcome these problems as soon as possible," said the President. "I believe that with this increase, we have shown our determination not to allow our employees to be crushed by the price increases," he added.
Erdogan stressed that new measures to ensure stability in the economy of the country are underway. He went on to announce that the government will remove both income tax and stamp tax on minimum wage so as to ease the burden of employers and to remove possible effects on employment.
President Erdogan also highlighted that he is determined to "put an end to the recent fluctuations in the exchange rate and the associated exorbitant price uncertainty as soon as possible".
The Social Security Institution of Turkey records that 40% of all workers in the country of around 84 million earn minimum wage. The commission that determines the minimum wage has 15 members, five representatives from the Labour and Social Security Minister and unions representing employers and employees.
The Central Bank indicated that the inflation pressure is temporary and necessary in order to expand the economic growth and balance the current account. Staples such as food and gas prices have increased and the annual inflation of the country accelerated to 21.31% as of November 2021 which is the highest reading since November 2018. The lira weakened as much as 3.57% after the CBRT's Monetary Policy Committee (MPC) meeting on Thursday to 15.34 against the U.S dollar.
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