Is there no minimum wage increase on the AKP government's agenda?

In periods of high inflation, minimum wage increases used to be implemented in January and July. With the relative decline in inflation, minimum wage increases began to be made only in January, until July 2022. By the middle of 2022, when inflation began to rise again, the real income of minimum wage earners had experienced a serious decline, and as a result of public outcry, the minimum wage was increased in July for the first time in years. The minimum wage was also increased in July 2023, but in the current situation, we see that there will be no increase in the minimum wage in July 2024.

However, when we look at the TÜİK (Turkish Statistical Institute) figures, we see very clearly that 22% of the raise given to the minimum wage in January 2024 has been eroded as of May 2024. A 22% inflation rate in five months means that the minimum wage earner's salary has decreased by an average of 4% in real terms per month. In the Survey of Market Participants announced by the Central Bank this month, the year-end expectation for 2024 was set at 43%. If this expectation is realized, the minimum wage earner's real income will have decreased by 43% by the time they receive another raise.

However, if the minimum wage were increased in July 2024, the real loss of the minimum wage earner would be much lower, and it could be ensured that the minimum wage earner, who is already the segment of society that earns the least money by working, could be relieved to some extent until the beginning of the year. Especially considering that at least 65% of the working population works for the minimum wage, it is extremely clear that a wage increase in July is very important for the welfare of the entire country.

Furthermore, in this period when the accuracy of the inflation figures announced by TÜİK is being questioned, it is common knowledge that whether the minimum wage is revalued once a year, twice a year, or every month, it condemns people to poverty in real terms. The minimum wage, which was set at a net 17,002.12 TL in January 2024, is currently less than one-third of the poverty line (57,736.78 TL) announced by Türk-İş; it is an amount even below the hunger threshold (17,725.19 TL).

The common problem of all salaried employees living in our country, such as minimum wage earners, private sector employees, civil servants, and retirees, is actually that the inflation figures announced by TÜİK remain far from protecting the purchasing power of wages. The incomes of salaried employees are decreasing in real terms every day, and increases made at the rate of inflation cannot stop this decrease. The most important reason for this is that the inflation figures announced by TÜİK are not measured according to the purchasing power of the citizens. According to the statement on TÜİK's official website, approximately 608,594 prices are compiled every month for 406 items and 913 item varieties from 28,852 workplaces and 5,246 residences (rent) within the scope of 81 provinces and 227 districts in 2024 for the CPI (Consumer Price Index), which provides estimates for all of Turkey.

So, despite the tracking of so many products, why do wage increases made at the rate of inflation cause a real loss of income for citizens? The answer to this, of course, lies with TÜİK again. If TÜİK discloses the details regarding the inflation basket, then we can fully see why the inflation figures are far from reality. However, TÜİK prefers not to share this information with the public, and it does not even implement court decisions. TÜİK, which lost the lawsuit filed by DİSK (Confederation of Progressive Trade Unions of Turkey) demanding the disclosure of details regarding the inflation calculation, appealed the case and lost in the appeal as well. However, despite losing the case and the court result becoming final, TÜİK does not fulfill the court decision by not disclosing the calculation details.

The government is also aware that TÜİK figures are insufficient to protect the welfare of wage earners, as in the last two years, increases above inflation figures were made in wages based on justifications such as welfare share or the discretion of the President. It was done, but those increases could not protect the welfare of the wage earner, and the real income loss of the salaried segment continued at full speed.

Moreover, the wage increases made by the President are extremely dangerous in terms of style and state seriousness. These increases, which are made in a style as if giving a gift to the citizen, on one hand, offend the citizen who earns their bread with the sweat of their brow, and on the other hand, contradict the seriousness of the state. The state is obliged to protect the interests and welfare of its citizens under any circumstances, and it must do so with seriousness. Leaving the welfare of millions of people to the words that will come out of one person's lips is a style that does not befit any great state.

Another important issue regarding wage earners is tax rates. While taxpayers who earn income from other types of income can deduct many of their expenses and benefit from discounts, exemptions, and exceptions, the deductions that wage earners can make from their incomes are extremely limited, or even almost non-existent. While other income earners pay the tax on the income they earn the following year, the taxes of wage earners are deducted before they even receive the income. Although changes are made to tax laws every year in our country and various tax advantages are provided to the capital class, no tax regulation is made in favor of wage earners. The practices of the current Minister of Treasury and Finance Mehmet Şimşek, which foresee collecting more taxes from every item that occupies an important place in the expenditures of low-income citizens (especially increasing the VAT rate) under the name of spreading the tax base, also make life even more difficult for wage earners.

In summary, increases made to wages based on the inflation figures announced by the state reduce the welfare of the wage earner and decrease their income in real terms. To reduce the real income losses of wage earners and compensate for their past losses, the deductions, exemptions, and exceptions that can be made on their incomes should be increased, and the tax rate should not be applied as a progressive rate, but at a rate of 10% throughout the year.