A forgettable year in unemployment but what about this year?

The October unemployment rate, which indicates the September, October and November average, rose to 11.6 percent, a 0.2 percent rise compared to the previous month’s data and up 1.3 percent compared to October 2017. The seasonally-adjusted unemployment rate increased by 0.2 percentage points from 11.3 percent in September to 11.5 percent. It has been increasing continuously since February, when it was 9.9 percent.

We will learn the average unemployment rate for the whole of 2018 when the November data is announced in one month. In the new economy program, the average rate of 2018 was estimated at 11.3 percent. It will not be surprising to see upwards of 14 to 15 percent for November, showing the October, November and December average and December data showing the November, December and January average. In the new economy program, unemployment is expected to climb to 12.1 percent this year, drop to 11.9 percent in 2020 and 10.8 percent in 2021. So there will be no one-digit unemployment rate for three more years. 2022 is a complete unknown.

Ten-year record

TurkStat started to announce the new series of labor statistics starting in 2014 and the series going back to 2005 was established in this context. This new data set shows that the highest unemployment rate in the period after 2005 was 13.1 percent in 2009. But 2009 was a special year: there was a global crisis which also affected Turkey.

Now, it’s clear that the highest unemployment rate over the ten years after 2009 will be realized in September of last year, when the new economy program was announced. In addition, it may in fact be much higher than the 12.1 percent estimated for this year. Even if we assume that such a situation will not be the case, we have already agreed that we will experience the highest unemployment rate of the 2010-2019 period.

W ll we m ss the 12.1 percent levels?

Although the 12.1 percent unemployment target for 2019 is very high and a record for the last decade, there may be days when we wish the unemployment was so low. It is very likely because there has been a data stream over the last week that crushes any optimism.

Industrial production has hit rock bottom. There was a contraction of 5.3 percent in October and November compared to the same month of 2017. In December, a higher rate of contraction is expected. Will non-producing industrialists make investments and increase their employment? Or will they reduce their existing employment?

We say that there is a rebalancing in the economy but this is happening at a very slow pace. The economy seems to be at the bottom and will track a horizontal course. In the meantime, workers suffer and unemployment is climbing. Let’s face it, we agree in advance that we will not be able to reduce unemployment to single digits for at least three years. So how can we talk about success in economic policy if unemployment is not dropping but is, on the contrary, increasing?