Wages and demand in Turkey: Where were we, where are we going?

When a disinflationary stance is adopted in monetary policy, the development of demand in the three fundamental sectors of structural problems (long-term) and cyclical analysis becomes a matter of curiosity: housing, automotive, and technology. For as Baran and Sweezy stated in their books on monopoly competition: “The economic system can only be sustainable if it is planned rationally on the basis of social needs.”

If this is the case, we must say the following: Turkey’s growth strategy based on housing, the defense industry, and automotive must be replaced with rational planning that considers social needs, through investments that both substitute imports and a new strategy that will develop civil society and consider domestic demand.

Just as the US, falling behind in competition with China, has turned to domestic chip (semiconductor) investments.

However, since the US is moving in a direction that disrupts civil society with its ICE police force, it cannot establish a compensation mechanism. By intimidating society through the innocent working-class US citizens killed in Minneapolis, it is weakening the power of the US Dollar more and more every day. Furthermore, although the US is responsible for 13-15 percent of global warming, it withdrew from the Paris Climate Agreement and does not use climate data. For these reasons, it is also a bad example.

WHILE STRUCTURAL PROBLEMS HIT THE CEILING

The “partial slowdown” of the acceleration in inflation, which is approaching 50 months, is occurring with an unpleasant outlook in terms of domestic and external demand. First of all, in terms of the short term, we are at a stage where a period of slowdown in housing has begun and structural problems have hit the ceiling due to the extraordinary increase in prices.

Aside from the increase in the mass of people who cannot even dream of homeownership, we are experiencing a period where the average rent is converging with nominal average wages. We now know that the high increase in workplace rents is a determining factor in services inflation.

On the other hand, the fact that the increase in land costs is not slowing down gives an idea that the side benefiting from rent is still strong and that this problem is being carried into the long term. So, are the approximately 1.7 million housing sales and 1.35 million automobile sales that took place last year sustainable? Considering the demand for these two sectors and the process of surplus value absorption, our answer is no. Moreover, a significant portion of the incoming demand comes from the 15 percent of the population in the top income bracket, the “well-off.”

The high level of second-hand purchases, which avoid year-end tax and exchange rate increases, is also noteworthy. If we generalize this mass as approximately 14 million, we can understand that 4-5 million households out of 23 million are effective in buying and selling. Unfortunately, the remaining 85 percent of the large mass cannot create demand because they are struggling to survive. Here, too, we are faced with a demand that arises from the welfare tendencies of a “lucky” small group chasing rent and profit rather than the general needs of the public.

On the other hand, as in the example of Migros warehouse workers stopping work to seek their rights, if the low level of real and nominal wages is not reversed, a tendency toward stagnation is inevitable. We cannot think that only the defense industry can determine domestic and external demand. Being a country with 5 defense industry companies among the top 100 companies in the global defense industry should not require ignoring the basic needs of society. The annual exports of these companies in 2024-2025 are approximately 9 billion dollars. However, our foreign trade deficit last year was 10 times this value (92 billion dollars).

This means that with a very insufficient increase in value-added, welfare growth and, in the words of Sweezy-Baran, “surplus value absorption” cannot take place. The deep poverty experienced, especially by retirees, is now beyond relative poverty.

So, how did we get to this point?

FACTS AND STATISTICS

According to the DİSK Labor Studies Community and Cumhuriyet: Between 2015 and 2022, 230 legal strikes were postponed by presidential decree, meaning they were effectively banned. The number of workers expected to participate in these strikes is approximately 170 thousand. This means that 90 percent of legal strikes were effectively prevented in terms of the number of participants.

According to data compiled by the Labor Studies Community, workers who cannot strike are accelerating their workplace-based actions. The peak year for worker actions, 2019, was surpassed starting in 2024. In 2025, there were 558 workplace-based worker actions with an average duration of 10 days. Birleşik Metal is the most active union organization among organized unions. In any case, the year-end contracts made in the metal sector have brought wages (with additional benefits) to an average of at least 80 thousand liras. This also means that average wages, which are approaching 1000 euros in all sectors, will exceed 1500 euros in the metal sector starting in March.

Although this wage remains at the poverty line for a family of 4, it has shown a trend that will set an example for other sectors. Metal workers will also receive a raise at least at the rate of inflation next year. It is clear how important union struggle is in terms of raising the welfare level of the worker and increasing their share of the surplus value. However, again according to DiskAr, the situation is as follows:

“While the official unionization rate in Turkey is 14.5 percent, the actual unionization rate is around 12 percent.

In the private sector, only 5-6 out of every 100 workers can unionize.

Only one in every 10 workers, including public workers, is covered by a collective bargaining agreement.

The collective bargaining coverage rate in Turkey is around 9-10 percent.

The collective bargaining coverage rate in the private sector is around 4-5 percent.

Turkey is among the worst 10 in fundamental rights and freedoms!

And it is the 8th worst country in terms of worker and union rights.”

TOTAL DEMAND HEIGHT: A HOLLOW CLAIM

In summary, the path to unionization is long and the number of unionized workers is not even 15 percent. This is the main reason why average wages remain below the poverty line when considering postponed strikes.

With this as the foundation, the claims of some economists and financiers in the mainstream media that total demand is still high based on the number of houses and automobiles sold are hollow. It is not total demand, but the demand of high-income earners that is decisive. And that, too, will run out of breath, because as the amount of surplus value used by society decreases, the incomes of the 15 percent wealthy segment will also be trapped in the narrow corridors of financialization.

Again, moving from Sweezy’s distinction between “added value” and “surplus value,” it is as follows: As long as the added value in Turkey is prevented from approaching the average in the metal sector, it will turn into the surplus value of financialization. We know that bank profits are increasing, at least for 2025, they are increasing below inflation (excluding shadow banking).

If profits of nearly 1 trillion liras are not enough for them, you can imagine the state of wages.