Minimum 'subsistence' wages, 'real' wages, and merit in society

Today, will the “debated” minimum wage be able to lift theworker from the hunger or poverty line to asubsistence level?

It is as if we are in theearly 19th centuryWe have returned to thedebate on subsistencewages. A“minimum” level sufficient to meet the worker's physiological needsand reproduce their musclepower is being discussed.However, as time hasover the past century and a halfcapital has expanded itself sufficiently. According to the 2026 Global Inequality Report published this month,the 1 percentof the world's population (adults) consisting of the wealthyand their heirs,which amounts to 56 million people, possesses 2.5 times more income than the total income earned by 4 billion poor people.

If we take as a base the 5 billion people who make up60-65 percent of the world'spopulation of 8 billion, these 56 million wealthy individuals exceed their total income aswell. In this case, let's not discusswealth, if you like; it hasbeenformed overcenturiesWe will address the impact of social capital in another article.

Returning to Turkey: In the 15-member Minimum Wage Determination Commission,the state's quota of 5 seats has not yetbeen changed.If this does not change, it will likely result in an injustice against the 5worker representatives, alongside the 5 employer representatives.Due to reasons stemming from the law, DİSK's themajority, not having the authority toparticipate, withdrew from the Commission; Türk-İşwithdrew, and Hak- İşalso stated that they wanted to withdraw. Determining wages through a commission with weak representation for the working class lowers the expectation of a fairwage from the very beginning.It pulls down. For approximately50 years, the minimum we may be experiencing the most antidemocratic "moments" of thewage-setting process.

WHAT IS DETERMINING IS THE "MARKET" AND "PROFIT"

The state-capital "cooperation" sets the minimum wage according to the market's"needs," that is, probased on a market analysis, or will this wage truly be determined as amaterial foundation for social life? It appears that for now, it is the former, meaning araise of around 30percent does notchange thispicture, and laborvictimizes the worker. Because the hunger threshold will, within the year, destroy the "subsistence" identity of the minimum wage.

Classical economics productivity firstby increasing the share of those remaining in the poolwouldleavethe distribution to the market.The 'orthodox economics' behindneoliberalism, which was bornwithin classical economics, viewed wages as responsible for both costs and inflation.we know that.After the 2008 crisis, this economicapproach, sometimes called autistic, is entirely market-based and leaves wages to the discretion of the state.Because the monopolistic structure of the markets exerts pressure on costs,as a "lion'sclaw" in terms of profit margins.causes it to be kept at a certainlevel.

On the other hand, for inflation, the monopolistic market's "free" mark-up strategy continues to be the primary source of inflation. Inflation squeezes wages moreand real wage declinecaused it tois a reality.

In such an economic environment, instead of the state finding a middle ground in the commission, the laborer's subsistence conditions toa rate that will raiseshould determine it. It looksdifficult, because theworking class has no one but itself. Recently,market economists have been completely caught up in the magic of the economythey were, they are practically tying wages to "charity."They claim the state will provide this favor in the form of alms, "without upsetting the market," of course.

These are approaches entirely consistent with the neoliberal idea of "charity."Western businessesconsuming atChristmas marketswhile entering the food linethey are still hesitant, yet the anxiety ofhow I will manage the expensesis prevalent there as well. However, in these places, extreme poverty exceeding30 percenthas fallen to nearly 90 percent of thepopulationdeclineLow real wages are widespreadthese days. Profitsare squeezing wages quitehard, and mainstream economistshavebeen ignoring this phenomenon for a longtime.

REAL WAGES SHOULD BE THE BASIS

On the other hand, it is known that both rent and transportation, as well as sectors, mean that cities have different inflationary structures. For example, TUİK's dThelatest November inflation announced was more than 0.50 points lower on a monthlybasis comparedto the ITO inflation in Istanbul.Thisphenomenon,especially in Istanbul,emerged as due to the fact that rent, transportation, and food prices in major cities remain relatively high compared to other cities. The severity of inflation in citiesmakes real wage analysis necessary. The burning impact of urban inflationis felt. If you take real wages into account,you can also analyze the relationship between living conditions in cities and inflation, and the realyou move toward arealistic wage level.

Furthermore, everysector'sjob risk and working conditions are not the same. Therefore, the process ofsurplus value formation and differentcan be taken into account. Here, arather than a regional analysis, only the urban-ruraldistinction and sectoralstructuredifferences need to be focused on. We are not privy to what was discussed in the MinimumWage Determination Commission, but suchtypes of analysesshort time cannot be discussed. In any case, journalists only conveyassessments that reflect the demands of the market and the workers.For example, in France, sectors

differ according to merit.This is amatter that requiresreaching wages, education level offers a very wide wage spectrum. For this reason, the differences between average wages and the minimum wageare rising in France. However, in Turkey, nearly halfof the laborersreceive the minimum wagesince the other half a significant portion remains below the minimum living standards of 90 thousand TL, minimum wages that are close to the average wages are pullingthe level of welfare down.

Wages that lead to poverty have caused young people to lose hope for the futurejust as education level qualitycannotbe raised, unfortunately.

What do I mean? An increase in the quality of education, through merit workreflects on working life; when there is no merit, the number of people taking the KPSS exam decreases, as does the quality of education. And that is exactly what is happening. Need an example? Remember when it was said that for statehiring, the interview process would be abolished and only KPSS scores would be applied? All in vain, of course...

The state is an institutional structure that places the welfare of society and its citizensabove profit analysis. Historically, the institutional structureis. states that prioritize it have longer lifespans. Rather than producing consent, it is necessary to produce prosperity. This is possible with high wages. Why does a state that wants to increase productivity not focus on real wages in cooperation with the market? Thus, it escapes the blind darkness of the minimum wage, and tdeadwe imagine a production that passes through the filter ofthought.

Taylor Swift's employees an annual bonus of high amdoes not even attract the market's attention? If youprioritize productivity,thenyoumustponder justice in distribution and the wage spectrumwe must.

With a level where merit raises education and education raisesmerit,when we cananalyze average wages,wishing everyone a healthy and as happy a year as possible...

Prof. Dr. MEHMET ŞİŞMAN