New employer and wage support program planned for industrialists

THE GOVERNMENT SUPPORT THAT INCENTIVIZ˹ ES NEW EMPLOYMENT HASN’T BEEN VERY SUC˹ CESSFUL. WHAT SHOULD BE DONE ABOUT THIS?

Impact analyses of all employment incentives and additional employment incentives should be carried out. With the support of the Participation in Employment Process, we’ll measure this. We’ll measure it for one, two years, and those who will come after us will be obliged to measure it as well. Turkey’s resources should be more efficiently used. What do the loans we provide, the discounts we give, the tax refunds or additional 6-point support, create? Do they make any change in employment? We’ve started work on employment incentives. There is employment that is created by growth, but we should measure the impact of incentives.

A support mechanism for which the pilot scheme will start in Gaziantep enters into force. The Direct Employment project will be kicked off and there will be direct employment at enterprises instead of training. Employees’ 3-month wage premium and insurance will be paid by us. Then the process will continue with a 9-month employment obligation.

We chose Gaziantep as it is in the southeast of Turkey and in a region that is rapidly industrializing. We’ll spread the project to the whole country according to the results obtained in Gaziantep. We’ll kick off a project and we’ll see how many jobs it creates. There are many such projects. We have technical courses under the umbrella of the Turkish Employment Agency (ISKUR). The Ministry of Education and various institutions have different programs. But we don’t know how these will be transformed into concrete employment. We’ll measure the impact of direct employment in the short term. We’ll examine its impact in terms of permanence and efficiency.

WHAT KIND OF WAGE POLICY WILL THERE BE?

There will be a new employment model employing a three-stage categorization for those who are primary school, technical high school, high school, and college graduates and want to work and for those who received engineering education. The program will be called ‘Participation in the Production Process’. We chose six main sectors in line with job features. It’ll be a program with 3-month government support and obligatory 9-month employment. There will be three types of wage stages and the first stage will start at minimum wage. We don’t know the second and the third wage stages as they will be defined by employers.

THE ‘MAKESHIFT EMPLOYMENT’ CONCEPT HAS EMERGED, AND THE SOCIAL STATE HAS COME TO THE FORE AGAIN. HOW DO YOU EVALUATE THESE?

The concept of a ‘social state’ and social state functions are important. The Republic of Turkey has had the characteristics of a social state since its establishment. It is a government that protected its employees in periods of poverty when the income per capita was USD 60 and that makes regulations to protect its mineworkers. Neoliberalism damaged and commoditized everything. The neoliberal economy lost people, the social state disciplines and dresses the wounds of them. Turkey implements the social state under the most proper conditions. For instance, the health system operates extraordinarily well. We’ve been successful even when the pandemic peaked. Our health policy includes everyone. It is also the same in terms of social assistance and the protection of employees. Our social state provided support to all segments when the government increased the minimum wage above TRY 4,000. We’ve contributed around TRY 70bn with the Short-Term Employment Allowance, Cash Wage Support, and Unemployment Insurance. The ratio of our social expenditures to the national income is high. The social state implementation won’t be efficient if everything, like social institutions, are damaged, and the health system is privatized, for instance. However, it will be beneficial if the public sector offers qualified services and the private sector steps in to offer better opportunities.

HAVE YOU DONE ANY WORK ON FOREIGN EM˹ PLOYMENT?

I think some problems should be resolved locally.

We received such requests in Gaziantep. The work should be left to the local authorities in terms of work permits, decreasing paperwork, shortening the process. We started this implementation when we came to Gaziantep. There were many files about Syrians. The problem was resolved in the city.

WILL THE MINIMUM WAGE BE REVIEWED?

The minimum wage was increased by 50% and excluded from taxes. The minimum wage should be excluded from taxes. The minimum wage should be examined within the frame of current conditions. If the Parliament doesn’t bring up the minimum wage and change it, the amount will be determined in December. But if there are extraordinary conditions, the minimum wage will be evaluated. However, the legal status shows December. The legal determination period of the new minimum wage is December.

EMPLOYERS WARNED ABOUT MASSIVE DIS˹ MISSALS AT THE MINIMUM WAGE NEGOTIA˹ TIONS. THE NUMBER OF APPLICATIONS FOR UNEMPLOYMENT INSURANCE INCREASED IN FEBRUARY. HOW DO YOU EVALUATE THIS?

There is one thing we emphasize in the methodology of economics. If two events happen at the same time, the relationship between them can be causal, coincidental, or conjunctural. The surge in the unemployment pay applications can be conjuncture-driven at the moment. It bears no relation to the minimum wage increase. The unemployment rate increases for a while in each minimum wage period and the employment rate comes to the same level again. The theory that the minimum wage increase causes unemployment has been falsified with the thesis of David Cardin, who was awarded the Nobel Prize for Economics. Factors such as different conjunctural factors, a change in the global economy, and technology adversely affect employment.

The minimum wage increase is important in real terms considering the current economic and legal conditions. We don’t anticipate a change in a short time or a certain month.

“The ‘Participation in the Production Process’ program, which will be implemented soon, will provide personnel and their wages, premiums, and insurance will be paid by the government for three months.”