Old money, new money, no money

The general election results have revealed that Turkish democracy is stronger than many had perceived.
Turkish citizens have shown that they have internalized the culture of democracy more than most, if not all other, Middle Eastern societies. However, the election results do not provide an optimistic future from workersand’ perspectives.
Prior to the elections all opposition parties had promised significant improvements in labor market regulations in favor of workers. The Nationalist Movement Party (MHP), Republican Peopleand’s Party (CHP) and Peoplesand’ Democratic Party (HDP) have all promised to increase the minimum wage to TL 1,400 ($510), TL 1,500 ($545), and TL 1,800 ($655) respectively. Considering that the current minimum wage is TL 950 ($345), the fulfillment of any of these promises would result with significant improvements in the welfare of the workers. In theory it is possible that the CHP, MHP and HDP can make a tri-party coalition government. However it looks like these parties cannot form a government. The MHP has announced that it is not open to any kind of coalition which involves the HDP. So, we will have either a government involving the Justice and Development Party (AKP) or another round of elections. Since the AKP was publicly against increasing the minimum wage, I guess it is unreasonable to expect a substantial rise in the short run.
I should note that unlike many other countries, the minimum wage rate directly affects the welfare of many workers in Turkey because approximately half of Turkish workers earn the minimum wage. In other Organization for Economic Cooperation and Development (OECD)ountries that ratio is around the 10-20 percent range. To be frank, I am not sure whether this high ratio represents the real conditions in the field or a statistical anomaly due to the data collection methods of the Turkish Statistics Institute (TurkStat). Many employers in Turkey underreport the real payments to their workers for tax reasons. In any case, we can say that the minimum wage rate affects the welfare of the significant portion of workers.
Let me give you two very simple calculations so you can get an idea about the purchasing power of the minimum wage in Turkey. There is a special kind of bagel called and”simitand” in Turkey. It is very popular among the poor, though many non-poor people, including me, eat it regularly because of its taste. It is filling but very poor in terms of nutrients. Usually it is accompanied with a glass of Turkish tea. It is customary to calculate the purchasing power of money in different time periods in Turkey by using this simit and tea combination. It is similar to the Big Mac index but rather than making interregional comparisons, it makes intertemporal comparisons. In Turkey, a majority of households have only one bread-earner since the labor force participation rate among women is around 30 percent. Suppose there are four members in a household and each eats only one simit and drinks one tea, three meals a day, at TL 1 each. The cost of food per person, per day, is TL 6. In a month, the cost of this bare minimum food is TL 720 per family. Remember that the minimum wage is TL 950 in Turkey. All other life necessities should then be covered with the remaining TL 230.
The second simple calculation is about a specific charitable contribution in Islam. According to Islamic teaching, during the holy month of Ramadan, each Muslim — unless she is extremely poor herself — should give one dayand’s worth of food to the poor as charity. This is called and”fitre.and” The cash equivalent of fitre can be given as well. According to the Religious Affairs Directorate, the supreme public religious authority in Turkey, the minimum amount of fitre to be given this year is TL 11.50. Note that this is about twice as much as the cost of the simit-tea combination. Also note that minimum wage rate is not even enough to cover these bare minimum food necessities of a typical Turkish family.
Prior to the elections, the Independent Industrialists and Businessmenand’s Association (ManduSiAD) announced that they are against these and”unrealisticand” promises regarding increases in the minimum wage. ManduSiAD is generally considered to be a pro-AKP business association of which the members are generally and”new money.and” So we might think that it was normal that they were against wage increases. On the other hand ManduSiAD members are usually pious Muslims. We are told that the Prophet Muhammad (pbuh) said, and”They are your brothers whom Allah has put under your authority, so if Allah has put a personand’s brother under his authority, let him feed him from what he eats and clothe him from what he wearsandhellip.and” Here the Prophet Muhammad (pbuh) is talking about slaves, so what about employees? It seems to me that it would be against the spirit of Islam to give a wage rate to oneand’s employee which was not enough even to cover most basic food costs.
I was very disappointed to see ManduSiADand’s statement. It does not matter whether it was politically motivated or motivated by economic self-interest. Yesterday, current and possibly future Prime Minister Ahmet Davutoilu announced that he will meet ManduSiAD and the Turkish Industrialists and Businessmenand’s Association (TanduSiAD) prior to government negotiations. Both of these business associations represent new and old money. The fact that the would-be prime minister needs the approval of businessmen is deeply disturbing for my taste.
I can talk about the economic viability or even necessity of increasing the minimum wage rate in the Turkish context. However it would suffice to say that the majority of workers in Turkey are living under low or lower-middle income country conditions while overall Turkey is a higher-middle income country based on aggregate statistics.

SOURCE: Today’s Zaman