The number of employed people reached 31 million for the first time in the August labor force data. The figure was 28 million 5 years ago in August 2017. Approximately 3 million jobs have been increased in 5 years. According to seasonally adjusted data, it means 600 thousand new employments on average annually. There was a pandemic once in a while, which is considered a good increase.
➔ However, it is not a sufficient increase in reducing unemployment in the long term and in real terms. As a matter of fact, the population aged 15 and over increased by 4.8 million, despite the increase in employment of 3 million on the same dates.
➔ In the labor force statistics prepared by using surveys and SGK records, while the working age population increased by 4.8 million and employment by 3 million in the last 5 years, the number of unemployed remained at 3.3 million and did not increase.
➔ They say the devil is in the details. Here, too, there is a title similar to the net errors and omissions item in the balance of payments data; participation in the workforce. The number of people joining the workforce has increased from 28.3 million 5 years ago to 30.5 million today. Those who do not participate in the labor force increased by 2.2 million people instead of falling in 5 years.
UNEMPLOYMENT FALLS BEFORE EACH ELECTION
➔ After all Compared to 31 million employees, the sum of those who do not participate in the labor force and the unemployed is 33.8 million, which is more. The number of people who do not participate in the working life and do not work because they cannot find a job is 2.8 million more than the employees. The figure was 3.2 more 5 years ago. Not much has changed.
➔ Unemployment rate, on the other hand, fell to single digits with 9.6 percent in seasonally adjusted terms. The rate dropped back to single digits after 4 years and 7 months.
➔ The unemployment rate, which was last seen in single digits with 9.8% in January 2018, increased to 14.1% in July 2020.
➔ Actually, there were general elections in 2018. Five months before these elections, unemployment hit single digits, but in June 2018, when the election was held, the rate had increased to 10.7 percent.
➔ In past elections, It is noteworthy that while unemployment fell to its lowest level close to the election date and generally to single digits, it rose to double digits somewhere between the elections and peaked.
➔ This situation is more evident in the 2007, 2011 and 2014 elections.
THE PROBLEM IS BIGGER
➔ Before each election, the situation is corrected, growth is throttled, expenditures in the public sector are increased, positions are opened, employment increases.
➔ Voters usually make decisions based on the last year.
➔ After the election, normalization begins. Unemployment will rise again.
➔ When we look at the long term, which goes beyond the elections, Turkey’s unemployment problem remains in place. In fact, the problem is even greater with the rapid increase in the number of external migrations and asylum seekers.
➔ While sending about 5 million expatriates abroad until 2000-2010, this opportunity was closed after 2010.
➔ On top of that, 6 million foreigners came to the country with asylum seekers, legal and illegal immigration. Especially after the Syrian war, the increase in unemployment rose one step further.
WHAT WILL BE THE FEES INCREASES?
➔ More importantly, the real decline in the wage levels of the employed and the rapid decline in their purchasing power in the face of rising inflation.
➔ Young people willing to work abroad two in one state to work. It seems like a career in the private sector has been forgotten.
➔ Now the new year is approaching. The minimum wage will be raised. Companies are brooding over how to cope with the rising wages.
➔ However It is essential that every minimum wage increase is at least as much as the food price increase included in consumer prices. This is some of the work.
➔ As of September The price increase in the CPI Food and Non-Alcoholic Beverages group is 93 percent annually. Even if it declines by 5-10 points towards the end of the year due to the base effect, we may encounter a rate of 70-80%.
➔ It may be difficult, at least for some companies, to meet the minimum wage increase and the general wage level that the minimum wage will raise.
WHAT IS NEEDED TO BE DONE?
➔ Moreover, the use of credit has been restricted, and a total of 10 percent increase limit has been set until the end of 2022. It is also unknown whether the limitation will continue in 2022.
➔ However, in the meantime, a loan package of 100 billion liras with a 7.5 percent interest rate of 5 years has been announced for the tradesmen.
➔ While the credit restriction continues on the one hand, on the other hand, credit packages are opened at very attractive conditions. If these packages are to be put into effect, we are faced with a conflicting situation.
➔ Maybe more accurate detection, credit rationing is no longer made under market conditions, but largely by Ankara and the politician.
➔ In this case, it becomes easier to understand what is being done.
MOST URGENT NEED
➔ What I see in the economic policies to be implemented The most urgent need is to increase exports and alleviate the liquidity problem in foreign currency.
➔ Because in this case, imports can be made for continued growth, the risk of crisis in the balance of payments will decrease, the exchange rate will not jump, and the foreign exchange sales necessary for the low interest policy can be continued.
➔ However, even as our main export market Europe is heading towards recession, exporters’ credit demands are not met.
➔ Selective credit policy applied. When we look at the segments to which credit is given, we see that steps have been taken towards the election of the government rather than the strategic needs of the economy.
➔ Otherwise, credit to tradesmen was necessary during the actual pandemic period. Support that was not given then is given today.
➔ What is required today is the access of companies engaged in production, investment and export to credit.
➔ Otherwise How will these companies cope with the increased minimum wage raising the general wage level? By reducing employment? Does the government want such a situation before the election?
➔ If he doesn’t want it, will the credit channels that were cut today be opened to everyone? If cheap credit taps are opened to everyone, what will be the situation of foreign exchange, inflation and current account deficit?