The end of capital-friendly “rational policies”: Turkey's minimum wage workers live below the poverty line

Semih Güven

Negotiations between capital and the government on the minimum wage have concluded, and the minimum wage for 2026 has been set at 28,075 TL (~655 USD), representing a 27% increase. Neither the cost of living nor the basic needs of workers were considered, nor were they granted a share of economic growth. Thus, for the first time in history, the minimum wage fell below the 30,000 lira poverty line on the day it was announced, once again revealing the substance of the “rational policies” brought in by Treasury and Finance Minister Mehmet Şimşek.

Focusing on the “rational model”, which means the exploitation of labour and the spread of oppression, will help us see the picture we are living in more clearly.

RATIONAL MODEL: THE CAUSE OF INFLATION IS THE WAGES OF THE POOR

Mehmet Şimşek took office on 4 June 2023 with a call for a return to rational policies in the economy, following the implementation of low interest rates and credit expansion, which was frequently criticised by economists as “irrational”. Upon taking office, Şimşek immediately rolled up his sleeves and implemented a high interest rate-low wage policy. The policy interest rate, which stood at 8.5%, was raised from 8.5% to 50% in the first nine months. The bill for this unpleasant prescription was presented to the workers. Despite all pro-labour economists disproving the thesis that the main driver of inflation is demand, the wages of low-income earners were kept down. The argument that we are all in the same boat was emphasised, and the temporary nature of the process was highlighted.

THE RICH-FRIENDLY INTEREST RATE SYSTEM HIT WORKERS

Low-income groups, who were indebted by the policies of former Treasury and Finance Ministers Berat Albayrak and Nurettin Nebati in the recent period, became unable to even repay their debts under Şimşek's high interest rate and low wage policy. Asset owners, on the other hand, profited from high interest rates and became even wealthier. Income inequality and poverty deepened day by day.

With a partial decline in inflation, interest rate cuts began in December 2024. The policy rate was reduced from 50% to 42.5% on 7 March 2025. Although slow, the decline in interest rates created public expectations that the downward trend in inflation and interest rates would continue.

“RATIONAL” POLICY FOR POWER: OPERATION AGAINST THE İBB, ARRESTS OF MAYORS

The ruling party viewed Istanbul Mayor Ekrem İmamoğlu's bid for the presidency as a serious threat and arrested him in a targeted operation. The decline in inflation was halted by the currency shock that followed the outflow of hot money from the country, and the partial credit given to Şimşek's policies by the public was also eliminated by this move.

From March 2025 to today, the government has expanded its political operations to other CHP provincial and district mayors and has brought the threat of trusteeship against the CHP to the table. Many groups that raised their voices against the government have also been subjected to detention and arrest.

The government, which prioritises weakening the groups it sees as a threat to its power and suppressing and fragmenting the rising opposition against it, has put the economy on the back burner with the expectation that the presidential elections will be held on time.

THE PEOPLE CANNOT WAIT FOR THE “ELECTION ECONOMY”

While 2026 is expected to be a more difficult year for the economy than 2025, a partial increase in pension payments and workers' wages is targeted for 2027 with the introduction of the election economy. Considering that the poorest 20% of the country's population has only 6.4% of the country's total income, the rapid impoverishment of the middle class and its inclusion in the minimum wage bracket, rising debt and inflation, it is clear that workers have no power left to wait. The time has come for the labour forces to urgently unite against the abyss into which the government is dragging the country, clearly for its own benefit.

Note: This article is translated from the original article titled Sermaye dostu ‘rasyonel politikaların’ sonu: Açlık sınırının altında asgari ücretliler Türkiye’si, published in BirGün newspaper on December 28, 2025.