Seyfettin Gürsel, Ozan Bakış, Hamza Mutluay
In this brief, we examine the effect of the minimum wage increase on the purchasing power of individuals by comparing the increase that took place in January 2022 with the increase of January 2016. Although the minimum wage increase enhances consumers’ purchasing power and protects consumers from the adverse effect of price increases, the data shows that the increase in the first half of 2022 has significantly melted due to the striking inflation. It is clear that the significant price increases in food, electricity, gas, and other fuels, which take up a large part of the consumption basket of the poor, have eroded the minimum wage increase in the first half of the year.
The government increased the minimum wage from 4,253 TL rose to 5,500 TL on 1 July 2022 by an extra 30 percent to mitigate the devastating effect of inflation. The last observation point of the data we use in the tables and graphs is June since we do not have enough data to extend the observation period. We will investigate the effects of an extra increase in the minimum wage in the following periods and then update the research brief.
doc. ResearchBrief259
pdf. ResearchBrief259