Mahfi Eğilmez's 'minimum wage' commentary: How much should it have been?
Economist Mahfi Eğilmez stated that based on calculations using purchasing power, the increase required for 2025 should be 45 percent. Eğilmez argued that the minimum wage of 17,002 TL set for 2024 should be 24,653 TL for 2025.
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The minimum wage amount of 17 thousand 002 liras, which was determined at the beginning of 2024, was increased by 30.01 percent and announced as 22 thousand 104 liras for 2025.
Economist Mahfi Eğilmez, who published an article titled 'From Minimum Wage to Subsistence Wage' regarding the determination of the minimum wage, calculated the figure that the minimum wage should have been based on purchasing power.
'IT MUST BE A MINIMUM LEVEL WAGE'
Starting his article by defining the minimum wage, Eğilmez stated, "Minimum wage: refers to the wage paid to workers in return for a normal working day, which is sufficient to meet the worker's basic needs such as food, housing, clothing, health, transportation, and culture at the prices of the day at a minimum level."
As can be understood from this definition, the minimum wage must be a wage sufficient to meet the worker's basic needs such as food, housing, clothing, health, transportation, and culture at a minimum level," he said.
HOW DID THE GOVERNMENT CALCULATE THE MINIMUM WAGE?
Eğilmez also addressed how the government calculated the minimum wage, stating, "If we calculate the average inflation of 2024 through the CPI index of TURKSTAT, we find it to be 60 percent. The MTP (Medium Term Program) forecast for the end of 2025 shows 17.5 percent. Assuming that 2024 will end at 45 percent, the average inflation for 2025 (even if we take the overly optimistic forecast in the MTP as a basis) comes out to roughly 30 percent.
I think the government made the minimum wage increase at 30 percent based on such a calculation. However, the correct calculation should have been made by taking the annual average inflation. Because the wage is received every month throughout the year, and prices change every month during the same period," he expressed.
HOW MANY LIRAS SHOULD THE MINIMUM WAGE HAVE BEEN?
Eğilmez, who calculated the figure that the minimum wage should have been determined based on purchasing power, included the following statements:
"Since the 2024 average is 60 percent and the 2025 estimated average is 30 percent, their average is 45 percent.
If we take 45 percent as a basis and accept the 17,002 lira minimum wage determined for 2024 as a correctly determined foundation, the minimum wage to be determined for 2025 should not have been less than (17,002 x 1.45 =) 24,653 liras.
In fact, this calculation was also the correct one in terms of replacing the purchasing power lost throughout 2024. Inflation seems to be 45 percent at the end of 2024. In this case, the purchasing power of the 17,002 lira minimum wage would have fallen to (17,002 / 1.45 =) 11,726 liras at the end of 2024.
The increase required to return to the purchasing power of the 2024 minimum wage is 45 percent. Which also leads us to the 24,653 liras we mentioned above."
