Makalenin Dili
: TR
Labor’s share of income has been declining all over the world since the 1980s, a period dominated by neoliberal policies. While the global financial crisis in 2008-2009 made this process visible against labor in distribution, the Covid-19 pandemic that affected the whole world in 2020 and the subsequent eruption of corporate profits further accelerated the distribution debates all around world. The share of labor is declining in Turkey, as in the world. The Turkish economy has experienced a major transformation, especially since the 2000s. The transition to neoliberal policies that started in 1980 was completed in the early 2000s.
Radical transformations in the economy bring about radical changes in social life and relations. The network of relations where major economic transformations will have the greatest impact on human and social life is undoubtedly on the distribution front.
This study aims to understand and analyze the changes in distributional relations in Turkey’s 1000 largest industrial enterprises over the last quarter century. The transformation of large industrial enterprises over time is of course intertwined with the transformation of Turkey and the world. Therefore, the changes in distributional relations in these organizations cannot be considered independent from the dynamics of distribution in the Turkish and global economy.
The data set of the study is compiled from the Istanbul Chamber of Industry’s Turkey’s Top 500 Industrial Enterprises (ISO 500) and Turkey’s Second Top 500 Industrial Enterprises (ISO Second 500) reports. The study covers the period 1997-2023. During this period, the Turkish economy not only experienced fundamental structural changes, but also a series of major crises, stems from both internal and external.
Two of these crises are critical for the development of distributional relations in Turkey. The first was the 2001 crisis, and the other was the inflation and distributional shock triggered by the changes in economic policies in Covid-19 and 2021.
Following the 2001 crisis, relative wage rates began to trend against those employed in large industrial enterprises, particularly those employed in Turkey’s top 500 industrial enterprises. Two factors are thought to be effective in this. In a period when the Turkish economy is growing mainly in services and construction, it is possible that relative wages will be unfavorable to those employed in industry. However, the findings show that the relative wage rates within the industry are also to the detriment of those working in large industrial enterprises, especially in the ISO 500. In Turkey, the minimum wage is gradually becoming the average wage and the gap between employees’ wages is closing. This is another factor that may be effective in explaining the narrowing wage gap between large industrial enterprises and other industrial enterprises.
The findings of the study show that after 2001, real wages received by employees in large industrial enterprises lagged productivity growth. Especially in Turkey’s top 500 industrial enterprises, real wages do not keep pace with productivity growth. As a result, employees in Turkey’s largest industrial enterprises are unable to benefit sufficiently from the economic growth process. As a matter of fact, after the 2001 crisis, the share of employees in income and value added created in large industrial enterprises declined.
Another major crisis in distributional relations occurred in the 2020-2022 period. In this period, large industrial enterprises, especially ISO 500 companies, increased their profit margins. This is in line with global trends. Considering that ISO 500 companies are Turkey’s largest industrial enterprises and thus have the highest market power, the decline in the share of labor in this period becomes more significant. One of the suspects in the decline in the share of labor worldwide is the growing market power of corporations. The profit margins of ISO 500 companies that jumped during the pandemic and “new economic policies” imply that these large industrial enterprises strengthened their market power further in the 2020-2022 period. As a matter of fact, while labor productivity in large industrial enterprises increased extraordinarily during this period, the real wages of employees declined. In this period, when Turkey was introduced to the concept of “impoverishing growth”, employees in large industrial enterprises were also severely affected by the distributional shock.
Crises are periods of reorganization of distributional relations not only between labor and capital but also between capital itself. After the 2001 crisis, the balance of distribution between finance and industrial capital was resolved in favor of industrial capital. However, this balance deteriorated again in 2018-2019, with finance capital taking a larger share of the value added created in large industrial enterprises. In this context, the “low interest rate-high exchange rate policy” introduced in 2021 may have been designed to intervene in the deteriorating distributional balance between industry and finance capital in favor of industry. However, the inflation and deep distributional shocks that followed these policies hit employees the hardest.
Unfortunately, there is no prescription to reverse the decline in labor’s share in a short period of time. The issue needs to be approached with a medium and long-term perspective, considering Turkey’s specific circumstances, and within a comprehensive growth and distribution strategy. It is hoped that this study will fill the gap in these issues and pave the way for new discussions.
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