The Relationship Between Minimum Wage and Inflation, Regional Inflation, Hunger and Poverty Threshold and Regional Minimum Wage in Turkiye
The relationship between the minimum wage level and inflation in Turkey, whether it is below inflation or not, has been a matter of debate for many years. The regional determination of minimum wage levels has also come to the agenda. In addition, a relationship is thought to exist for minimum wage w...
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| Main Author: | |
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| Format: | Article |
| Language: | English |
| Published: |
Istanbul University Press
2022-11-01
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| Series: | Maliye Çalışmaları Dergisi |
| Subjects: | |
| Online Access: | https://cdn.istanbul.edu.tr/file/JTA6CLJ8T5/ACB54B0E37DF467A95EA81712B822810 |
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| Summary: | The relationship between the minimum wage level and inflation in Turkey, whether it is below inflation or not, has been a matter of debate for many years. The regional determination of minimum wage levels has also come to the agenda. In addition, a relationship is thought to exist for minimum wage with the hunger and poverty thresholds. This study aims to determine the relationship minimum wage has with inflation, regional inflation, the hunger threshold, and the poverty threshold. The study examines the relationships the different versions of minimum wage have with inflation, the hunger threshold, and the poverty threshold alongside regional inflation in Turkey for the S1 2005-S1 2022 period using the bootstrapped Toda-Yamamoto causality test. The test results show bidirectional causality to exist among gross minimum wage, employer cost, and national inflation rates with the hunger and poverty thresholds. While net minimum wage and increased minimum wage rate do not cause consumer inflation, they do have a mutual causality relationship with the other variables. In addition, the results differ regionally. For example, minimum wage is determined to be the cause of regional inflation in industrially developed regions except İstanbul. In contrast, the minimum wage and regional inflations in Northern region of Central and Eastern Anatolia and Eastern Black Sea region, has a mutual causality relationship or no causal relationship at all. In addition, a weak convergence is found to be present for regional inflation rates, with these rates varying differently from one another. As a result, the suggestion can be made that minimum wage should be regulated regionally by considering regional inflation and other regional characteristics, as well as the hunger and poverty thresholds. |
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| ISSN: | 2757-6728 |