(Bloomberg) — Turkey’s minimum wage will rise 50% next year to help offset increased living costs, President Recep Tayyip Erdogan said Thursday.
The monthly net minimum salary will be 4,250 liras ($275), Erdogan said during a televised press conference. In 2021, it stood at 2,826 liras, a figure that converted to $380 at the start of the year but has fallen to $186 with the lira’s 51% depreciation.
More than 40% of all workers in Turkey earn the minimum wage, according to the country’s Social Security Institution, meaning the hike will ripple broadly through the economy at a time when polls show Erdogan’s popularity slipping.
“The increase in minimum wage is 50% and that’s the highest raise in the last 50 years,” Erdogan said. “I believe this shows our determination to not have our workers crushed under price increases.
“Starting next year, we will abolish both income and stamp tax on the minimum wage,” he added.
Rising Prices Defy Data and Stoke Anger in Turkey
While the raise could mitigate the discontent that’s taken root among struggling working-class families, it could also fuel already high inflation.
Consumer prices were up an annual 21.3% in November, including an average 27.1% increase in the cost of food. The lira has lost more than half of its value against the dollar this year, driving sharp price rises across the board.
“The inflation that people feel is much higher than the official data suggest, so wage earners have become impoverished,” Yalcin Karatepe, an economics professor at Ankara University, said last week. “They want to be compensated for the loss in purchasing power.”
(Updates with 2022 minimum wage announcement in first paragraph.)
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