The March report released by the Turkish Employment Agency (shortened as İŞKUR in Turkish) starkly reflects this worsening picture. According to İŞKUR, the reported number of unemployed grew by 72.9 percent in the past year to 4,048,000. Almost one-third of these workers fell in the 15-to-24 age group.
For the first time, the jobless rate has surpassed 4 million in Turkey. On a month-on-month basis, a sharp rise in unemployment is evident, especially since September. This trend demonstrates that the fluctuations in the value of the Turkish lira last August – which marked the height of a currency crisis - caused severe harm to the economy.
İŞKUR gets its data from workers who register with the agency and the figures provide preliminary indicators of employment trends ahead of the release of official data. The most recent report published by the Turkish Statistical Institute showed unemployment rising to 14.7 percent in January. İŞKUR’s data demonstrates that the job market deteriorated further in February and March. Together, these reports suggest that the increase in unemployment will continue in the coming months.
The rise in unemployment has occurred despite salary subsidies provided by the government, which were announced in the lead up to the March 31 local elections. With an eye on the nationwide vote, the government began paying the salaries of newly hired workers in February, March, and April through the state-run Unemployment Fund. By fronting the costs of employee wages, insurance, and taxes for three months, the Unemployment Fund implemented the most far-reaching employment incentive the government has enacted to date. Yet, despite these attractive incentives, employers not only failed to hire new workers, but also laid off additional employees. Evidently these incentives have not been enough to overcome the stagnation in the economy.
It is worth noting that in addition to the government subsidy for newly hired workers, the fund also provided short-term salary subsidies for existing workers. This subsidy gave employers the opportunity to keep workers on the payroll using government funds. In other words, the government offered to cover not only three months of salaries for new hires, but also short-term wages for existing workers. All employers had to do was not lay off staff.
By encompassing both new and existing workers, the government had expected employers to take advantage of these financial incentives in this time of economic crisis, which has seen inflation accelerate to about 20 percent and the economy contract for two straight quarters.
However, in the month of March, only 35,850 workers benefitted from the short-term salary subsidy. This indicates that employers do not expect conditions to improve anytime soon and are choosing to lay off employees and permanently downsize rather than take advantage of the government’s band-aid solution.
Statistics on education levels reported by İŞKUR show that hundreds of thousands of university degree, masters and doctoral degree holders are among the throngs of unemployed. Jobless workers with a university education total 843,000, including 458,000 with a bachelor’s degree and 385,000 with an associate’s degree. Masters degree holders constitute 17,993 of unemployed workers who have registered with İŞKUR, and doctorate degree-holders account for a further 789.
The vast majority of workers without jobs are long-term unemployed. Almost 1.1 million people have been searching for a job for more than 8 months and 315,000 have been looking for more than a year. Of the 4,048,000 total unemployed, 275,000 have been unemployed for less than one month.
The decrease in available jobs in the private sector is also noteworthy. İŞKUR said vacant positions in the job market decreased by an annual 16.6 percent to 202,000 in March, The first quarter showed a larger decrease with 494,000 reported vacancies; a 17.7 percent decrease from the same period last year. Top positions that employers tried to fill through İŞKUR were for security guards, salespersons and cleaning staff.
According to the March data, of the 429,000 people that applied for unemployment benefits in January and February, 219,000 received payment. Along with those who secured payments in previous months, the number of people on unemployment benefit reached 682,000 in March.
There was a marked increase in spending by the Unemployment Fund, led by employer incentive payments and also including unemployment benefits and other spending. The fund’s three-month expenses increased to 5.8 billion liras. Unemployment benefits comprised 2.1 billion liras of this spending, and the rest was in the form of incentive payments, vocational courses and on-the-job training programmes. The fund’s total assets reached 130.5 billion liras.
The statistics reported by İŞKUR, the Turkish Statistical Institute, and the Social Security Institution all demonstrate a severe collapse in the labour market. Unemployment is increasing at an alarming rate. Every day, thousands lose their jobs. Every month, we are confronted by worsening numbers. Bearing in mind the long-term deleterious effect that economic crises have on employment, we can predict that those who have lost their jobs will not be able to return to work for a few years. Therefore, Turkey needs to take urgent steps to provide more effective alternatives to the Unemployment Fund to help unemployed workers.