In Istanbul's fishmongers, the only queues are fish and many butcher shops have stopped selling sirloin due to lack of customers. In their neighborhoods, the Turks go to the weekly fruit and vegetable market wary of the new prices and with a definitely heavy heart every time they cross the doors of the supermarket.
To compensate for runaway inflation, the President of Turkey, Recep Tayyip Erdogan, announced this Thursday an increase in the minimum wage to 8,500 lire, equivalent to about 427 euros per month, starting on January 1. An increase of 54 percent compared to the current one. This is the third increase in a year, after those experienced in July and last December.
The sum of the last two updates temporarily equals the minimum wage with the annual increase in the cost of living, calculated at 84%. The problem for workers is that real inflation could be double the official one, according to independent economists.
The unions demanded a minimum wage of 9,500 lira, while the opposition leader, the centrist Kemal Kiliçdaroglu, last week called for it to be 10,128 lira. A significant position taking in a party that brings together the vote of the middle class (in addition to that of the Alevi minority) and that until now had preferred, like Erdogan himself, the cultural battle, in his case in favor of secularism and Kemalism .
As many as 37% of Turkish private sector workers - and often their families - earn the minimum wage. Part of the social tension in neighborhoods with a large presence of Syrian refugees - and Afghans - is that they are not even in a position to impose the payment of the minimum wage to their workshops, often subcontracted by larger textile firms.
A large businessman confessed to this newspaper that the wage bill represents only "between 8% and 9% of the company's expenses". The same industrialist, who requests anonymity, considers that the big winners of the inflationary climate are "supermarkets, which are taking advantage of it to increase their profit margin."
With less than six months to go before a crucial election, it is clear that the cost of living will be one of the two or three issues that will decide the outcome. After twenty years in power, Erdogan's Justice and Development Party (AKP) has been able to challenge traditional elites for economic primacy, but has failed, like its predecessors, to create a country of classes. tights.
It should be noted that the largest Turkish union, Türk-Is, abandoned negotiations with the government and employers, declaring that it would never sign an agreement below 9,000 lira (453 euros). Erdogan has lamented that "the conditions do not exist", although he has promised a review throughout 2023, if circumstances require it, with the promise of containing the price increase below 20% before the end of the year .
On paper, inflation has dropped from 85.5% to 84.4% in the last quarter, with a lower relative impact of the energy bill due to the fact that purchases of Russian hydrocarbons have not only not decreased -as in the rest of Europe - but have increased significantly.
The rise in prices, for its part, is directly related to the depreciation of the lira, close to 30% in 2022, after the bottomless fall of 2021. On the positive side of the cheap lira, Turkish exports are reaching record numbers and they have multiplied in the direction of Russia, a market in which they have overtaken Germany, remaining in second place, behind China. The conversion of Turkish ports into re-export platforms has contributed to this.
On the other hand, the Central Bank of Turkey has decided in its last meeting not to lower the reference interest rate again -currently 9%- unlike what happened in the previous four months. Erdogan's cut season is over, but it will be compensated with a large injection of liquidity equivalent to 3.3 billion dollars from the sovereign wealth fund, to be distributed equally among the three large publics, in order to stimulate credit and economic activity .
Finally, it should be said that the aforementioned Türk-Is union places the hunger threshold at 7,878 lire (400 euros), just below the new increase in the minimum wage. Filling the basket from the third week of the month has become a sacrificial juggling exercise for millions of Turkish families. Despite everything, in Istanbul you see far fewer people begging or sleeping rough than in most large Western European cities.
