ABSTRACT

The reproduction of labor and determination of the minimum wage required to sustain a laborer and his/her family is an important subject in the political economy. In this study, relationship between the progress in GDP and minimum wage during the 19802015 period is investigated. Analysis of the long term relationship between these two variables is made by using the indexing method. In this context; real minimum wages and real GDP variables are indexed to USD and the Turkish Lira. Turkish economy in financialization process, or the Neoliberal era, is analyzed in three sub-periods. In each sub-period, real GDP index is compared to the index of real net minimum wage. The analyses show that, in the last thirty-five years, the minimum wage increased by a factor of 3,5, while the increase in the real GDP has been 4,3-fold. The average annual increase for the same period was 3,9 % for real minimum wage, and 4,2 % for real GDP. Thus, minimum-wage workers did not receive a fair share of the growth of the national economy for this thirty-five year period. When viewed in terms of sub-periods, the minimum-wage increases were lower than the GDP growth for both the 1980-89 and 1990-2001 sub-periods; but higher for the 2002-15 period. At the beginning of 2016, despite the real increase in this last period, the gap still continues to exist between these two variables. If the necessary precautions are not taken, this gap will persist. To close the gap, our calculation shows and we recommend the net minimum wage as of the beginning of 2016 should have been TL 1415