ABSTRACT
The aim of the study is to examine the determinants of the real minimum wage levels for Turkey after 1980. Real minimum wages, which are very important in the formation of economic theory and economic policies and which lead to other conclusions; unionization rate, inflation, real GDP and labor productivity were analyzed using both partial comparative and econometric instruments. The results of the study are evaluated with two different approaches. In a theoretical framework, labor productivity growth in Turkey is far behind the developed countries i.e. EU and G7 countries . On the other hand, comparative analysis reveals that there is no net improvement irrelevant to real GDP growth. Moreover, as one can see from social security institution annual records mean and median annual wages converge to the minimum wage. Therefore, it has been found that the employees also observed at a nominal increase in minimum wages in recent years and they can find jobs with the wages close to the minimum wage levels. In other words, it can be stated that labor market wage equilibrium is shaped around the minimum wage. Moreover, it has been stated that lowering wages with apolicy design may function as a negative or misleading signal for the specialization of the productionstructure of the country. It is emphasized that when low wageslead to labor-intensive industrial specialization, intensiveindustries, lowvalue-added goods production due to low wages may create a contradictory relationship in terms of the development of the industrialization of the country. In this context, econometric methods will be implemented to determine the direction of the relationship between real minimum wages, unionization rate, inflation, real GDP, and labor productivity using data for the period of 1980-2016. The stationarity of the series has been investigated with the help of structural continuity unit roots and structural discontinuous unit root tests. According to Toda-Yamamoto Causality test results; GDP, inflation and productivity variables were found to be effective in determining the real minimum wage level
