What will the minimum wage be in 2021? Last Minute: Start the job!

The minimum wage is determined each year in December of the previous year. The Minimum Wage Determination Commission will begin work on December 1 to determine the minimum wage for 2021. The employee, the employer and the state are represented by 5 members on the commission. As with most members of the TURK-IS confederation for workers, employers on behalf of the Turkish Employers’ Trade Union Confederation (TISK) are on duty.

The minimum wage increased by 30% in 2016, 7.9% in 2017, 14.2% in 2018, 26.1% in 2019 and 15% in 2020.

The consumer price index (CPI) increased by 8.81 percent in 2015, 8.53 percent in 2016, 11.92 percent in 2017, 20.30 percent in 2018 and 11.84 percent in 2019 on an annual basis.

It was emphasized that in the Medium Term Programs (PMP) of the last years there will not be salary increases according to past inflation. In the PMP, which was released last year, it was noted that among the measures to be taken to ensure price stability, some public-directed prices and wages will be adjusted according to the program’s inflation targets rather than inflation. last, thus limiting the inertial effect on inflation.

In the MTP released this year covering the years 2021-2023, he is content to say that “governed / directed prices and fiscal regulations will be determined in a way that helps reduce past inflation indexing behavior” to maintain fiscal discipline. This time the statement that past inflation figures will not be factored into salary increases was not included.

In the Medium Term Program, the inflation forecast for 2020 was determined at 10.5 percent and the inflation expectation for 2021 at 8.0 percent. In the Central Bank’s Fourth Inflation Report announced after the PMP, the inflation forecast for 2020 was revised by 12.1 percent, while the inflation forecast for 2021 was determined at 9.4 percent.

In 2021, the salaries of civil servants and the salaries of public workers will increase by 3 + 3 percent. If inflation exceeds these rates, the difference will be reflected in wages and salaries.

WHAT WILL THE MINIMUM SALARY BE ACCORDING TO THE SCENARIOS?

He wonders how much the Minimum Wage Determination Commission will increase by the minimum wage. Possible increases in the minimum wage under various scenarios are as follows:

ACCORDING TO THE 2021 INFLATION TARGET IN THE MTP: In the MTP, inflation is forecast to be 8 percent by 2021. If the minimum wage is increased by 8 percent in accordance with this goal, the gross minimum wage becomes TL 3,178 and the net minimum wage becomes at 2,510 TL.

ACCORDING TO THE CENTRAL BANK’S 2021 INFLATION TARGET: The Central Bank estimates that inflation will be 9.4 percent in 2021. When this rate is increased, the gross minimum wage becomes 3,220 TL and the net minimum wage of 2,542 TL.

ACCORDING TO THE CENTRAL BANK’S FORECAST FOR INFLATION IN 2020: The Central Bank revised its inflation forecast for 2020 to 12.1 percent in its latest report. If the minimum wage increase is 12.1 percent, the gross minimum wage will be 3299 TL and the net minimum wage will be 2605 TL.

IF THE WELFARE PARTICIPATION IS ADDED TO THE CBRT’S 2021 INFLATION TARGET: If an increase of 12.4 percent is made by adding 3 welfare points to the 2021 inflation target of the Central Bank, the gross minimum wage will be 3,308 TL and the net minimum wage will be 2,612 TL.

IF THE WELLNESS SHARE IS ADDED TO THE CBRT INFLATION FORECAST FOR 2020: If the welfare participation of 3 points is added to the inflation forecast for 2020, which the Central Bank determines as 12.1 percent, an increase of 15 percent is made, the gross minimum wage will be 3,384 TL and the salary Net minimum will be 2,673 TL.

WHAT WAS THE INFLATION AND THE MINIMUM WAGE RATIO IN PREVIOUS YEARS?

Since a critical election was held in 2015, the 2016 minimum wage increased by 30 percent, although 2015 inflation was 8.81 percent. While inflation in 2016 was 8.53 percent, the minimum wage increase in 2017 remained at 7.9 percent since it rose to a high level the previous year.

On the other hand, while inflation in 2017 was 11.92 percent, the minimum wage in 2018 was 14.2 percent; While the 2018 inflation rate was 20.30 percent, the 2019 minimum wage increased by 26.1 percent.

While the inflation rate for 2019 was 11.84 percent, the 2020 minimum wage increased by 15.0 percent.

According to the inflation of the previous year, 2 points were applied in the minimum wage applied in 2018, 5.8 points in the minimum wage in 2019 and 3.16 points in the minimum wage of 2020. It is observed that in the minimum wage of the In the last three years, a part of welfare was added to the general minimum wage, above the inflation of the previous year. Based on this, it seems realistic to expect 2-3 welfare points to be added above the Central Bank’s inflation forecast for 2020, 12.1 percent.

MILLIONS OF PEOPLE WERE NOT FULL OF THE 2020 MINIMUM WAGE

However, Turkey, both from the pandemic, is going through an extraordinary process due to internal reasons. Millions of workers were able to receive the minimum wage figure for 2020 only in the first three months of the year. In April and May, 3.5 million people had little work and could not receive their normal salary. This situation continued, although their number decreased in the following months. As of September, 1 million workers were deprived of their normal salary due to job shortages and around 750,000 workers on unpaid leave. It is possible that the conditions of the extraordinary period will determine the rate of increase of the minimum wage for 2021.