A 'Wage' That Is Livable

Reducing the wage issue in Turkey solely to the question of “what should the minimum wage be?” means failing to see the real problem of the economic order we are in. The issue we need to discuss today is not just the amount of the wage; it is how much of the true value of labor is recorded, how the employee's right to social security is protected, and what kind of fiscal order the state has established through wages.

Official data shows that approximately 40 percent of those working in the private sector receive wages at the minimum wage level. However, when we look at the reality on the ground, it is seen that the portion of people working in private enterprises who are truly paid the minimum wage is much lower than this, at around the 10 percent level. The large gap between these figures points to one of the most important structural problems in Turkey's wage policy: a portion of the wage is left unregistered, and while the employee is shown as insured at the minimum wage, their actual earnings are a different figure.

At first glance, this situation might appear to be merely an issue between the employer and the employee. However, it is not. In the long run, both the state and the employee lose out from this system.

When an employee is insured based on their full actual wage, it may seem like they will pay more premiums today. But tomorrow, they will receive a higher pension, their right to unemployment insurance will be strengthened, and their severance pay and other social security rights will be shaped based on their actual earnings. The state, in turn, will generate more premium and tax revenue. Conversely, showing the wage at the minimum wage level and leaving the remainder unregistered not only creates a loss of tax and premium revenue but also leads to millions of people being condemned to low pensions in the future.

Today's underreported wage is tomorrow's low pension.

For this reason, we must evaluate the wage issue not only through the lens of today's living conditions but as a social state issue that encompasses a person's entire working life and retirement.

It must also be stated here as an open fact: The wage received by a person who truly earns the minimum wage is not a wage that can meet all the requirements of a humane life in today's Turkey. When housing, food, transportation, education, health, and other mandatory expenses are taken into account, the current level of the minimum wage as a return for human labor has ceased to be justifiable.

Therefore, we must separate two problems from each other.

First, raising the wages of those who truly earn the minimum wage to a livable level.

Second, ensuring that the actual wages of employees who are shown at the minimum wage despite actually earning more are recorded.

The way to achieve this is not just through audits and penalties. Of course, the informal economy must be fought, but it is also the state's duty to make it economically possible and attractive for the employer to “report the actual wage.”

I am proposing a realistic solution here:

The state should cover a certain portion of the social security premium paid by the employer, provided that the wage is reported at its actual amount.

For example, covering half of the employer's share could be made conditional on the entire wage being recorded. To finance this, a special resource of 1 percent could be set aside from Corporate Tax revenues to create a “Livable Wage Fund.”

This fund would reduce the burden on the employer while encouraging the recording of the employee's actual wage. When the full wage is reported, the state's SGK (Social Security Institution) premium revenues increase; the tax base expands; and informality decreases. The employee's future retirement rights are strengthened. For the employer, the cost of registered employment is reduced.

In addition to this, tax deductions, premium support, and advantages in investment incentives can be provided to businesses that encourage the reporting of actual wages to a certain extent. Thus, the system can be built not on punishment, but on rewarding correct behavior.

The main goal should be as follows:

The employer should report the actual wage, the employee should be insured based on their actual wage, and the state should collect its taxes and premiums based on actual earnings.

A system where all three parties win can be established.

Moreover, recording all wages and taxing economic activities based on their true scale will strengthen not only the social security system but also public finance. The way to reduce the burden on the budget today is not to constantly impose new taxes, but to record the true scale of existing economic activity.

What Turkey needs is a wage policy that does not cheapen labor, but records it and makes it valuable.

The retirement of a person who pays insurance premiums based on their actual wage will also be real. Instead of a system that impoverishes the employee's future for the sake of a few thousand liras of premium advantage today, we need a social state understanding that guarantees a life worthy of human dignity both while working and in retirement.

Because the issue is not just “minimum wage.”

The issue is a livable wage, a secure working life, and a dignified retirement.

Turkey can achieve this.

To do so, we must first accept the true value of the wage, then correctly diagnose the causes of informality, and ultimately establish a new wage and social security order that does not pit the employer, the employee, and the state against each other, but one where all three win.

An economy that does not push human labor into the informal sector, but sustains people by recording their labor…

This is exactly what we need.

Because a livable Turkey begins with a livable wage.

Prof. Dr. Duran Bülbül