SEYFETTIN – Worrying developments in the labor market

Worrying developments in the labor marketThis Sunday important events occurred in Turkey. The editor-in-chief of Zaman, Turkeyand#39s most popular newspaper, Ekrem DumanlI, along with other journalists, police officers and scriptwriters (a total of 24 individuals by the end of the day)onsidered close to Fetullah Gulen were taken into custody by the police.

The prosecutor said the andldquosuspectsandrdquo were detained on charges of establishing, heading or being a member of a terrorist organization. These accusations are ridiculous, but this operation has been planned for a long time by ErdoIanand#39s inner circle in an attempt to cover up the biggest corruption scandal Turkey has ever seen, which exploded last year on Dec.

17 and 25. The top management of the Justice and Development Party (AKP) recently implied that President Recep Tayyip ErdoIan is using all the resources available to him in order to limit the political damage the corruption may cause the party before the general election in May 2015.

While these events were taking place we learned from the Turkish Statistics Institute (TurkStat) that other important events occurred in Turkey over the last month, with unemployment increasing strongly once again. The non-agricultural unemployment grew by 200,000, boosting the unemployment rate from 12.

5 to 12.8 percent for August, September and October One year ago the non-agricultural jobless rate was 11.

3 percent. Now Turkey has more than 3 million unemployed.

No doubt, this is a very high increase, but at the same time it is difficult to explain. Normally unemployment rises when the labor force continues to grow while the increasing number of jobs begins to decelerate because of the lowering of gross domestic product (GDP) or labor-saving technological developments.

In Turkey, since the GDP growth has been low since 2012, at around 3 percent, it has been expected that unemployment will start to increase, albeit slowly.Indeed, this happened until recently.

The non-agricultural unemployment rate increased from 10.6 percent in December 2011 to 11.

3 percent in December 2013 but the increase then accelerated, reaching 12.8 percent in SeptemberThis acceleration in the increase of unemployment might be considered normal since the GDP growth has become even lower in the recent quarters.

In the last six months (April-October) GDP grew by only 2 percent. But, here lies the strange event, non-agricultural employment increased by more than 1 million (5.

8 percent) within a year If the number of unemployed as well as the rate increased significantly, this is because the non-farm labor force increased more strongly, by over 1,600,000 (7.5 percent).

These absolutely astonishing figures constitute a real riddle from the point of view of labor market theory. GDP growth is currently low in developing countries, and a strong increase in the labor market is a miracle with shocking demographic consequences.

Let me underline that the huge Syrian immigration is not included in these figures because they are not included in the sample that was surveyed.

SOURCE: Today’s Zaman