Opposition Says Min Wage Boost Brought Forward To Avoid Larger CPI-Induced Increase

LOCAL NEWS

• Opposition IYI party says the move to announce the minimum wage before the end of the year is to avoid needing larger increases as inflation picks up in 1Q22.
  • Government announced a 50% increase in the minimum wage yesterday alongside reduced income and stamp duty taxation, while local economists say the min wage rise wipes out the cost competitiveness boost of cheaper labour from a weaker lira – clashing with Erdogan’s export driven economy goal.
  • 40% of all workers earn min wage, which could buoy support for Erdogan from historic lows. However, with a higher minimum wage comes increased unemployment and inflation
• Opposition alliance calls for measures to ensure confidence and stability, warning that Turkey will face a serious balance of payment crisis if policy remains the same.
  • The economic desk established by opposition parties to evaluate the recent developments held their second meeting yesterday where officials urged for measures to ensure confidence and stability, saying the rise in exchange rates and high inflation put the financial sector at risk